Council Directive 72/166/EEC (OJ No. L103, 2.5.72, p. 2), as modified by Council Directives 84/5/EEC (OJ No. L8, 11.1.84, p. 17) and 90/232/EEC (OJ No. L129, 19.5.90, p. 33) requires a Member State to take all appropriate measures to ensure that civil liability in respect of the use of motor vehicles normally based in its territory is covered by insurance.

Under section 143 of the Road Traffic Act 1988 (“the 1988 Act”) it is an offence to use, or to cause or permit someone to use, a motor vehicle on a road unless its use is covered by an appropriate policy of insurance or security (“the insurance requirement”). “Road” is defined in section 192(1) of the 1988 Act, in relation to England and Wales, as any highway or other road to which the public has access and, in relation to Scotland, as any road or other way to which the public has access. In the case of Cutter v. Eagle Star Insurance Company Ltd, [1998] 4 All ER 417, it was held by the House of Lords that the expression did not include a car park or similar public place.

For the purpose of complying with the directives these Regulations amend the 1988 Act first by extending the insurance requirement to the use of vehicles in public places other than roads and, secondly, by making provision for the reporting of accidents and the production of insurance documents where an accident occurs in a public place.