By Mark Merrell, partner and head of Corclaim Debt
The possibility of a no-deal Brexit is fast becoming a reality and something which all businesses need to seriously plan for.
That is especially true of the haulage and logistics industry whose businesses operate across national borders within the European Union (EU).
Due to the UK’s membership of the EU, drivers currently benefit from the European Economic Area (EEA) and the ‘free circulation area’ – this means that people can move freely through the EEA, Andorra, Serbia and Switzerland knowing that there are no border controls on their motor insurance.
It is unsure whether the UK will still be within the ‘free circulation area’ as the European Commission is yet to approve the UK government’s proposal.
If the political stalemate continues and the UK leaves the EU with a no-deal on the 29th March, then the country will automatically drop out of the ‘free circulation area’. The consequence of this is the return to the Green Card System.
What is the Green Card System?
The Green Card is an internationally accepted document which proves that the minimum compulsory motor insurance cover is in place on a vehicle.
The absence of one where it is required, does not mean you are not insured, but it means you cannot show by means of an internationally recognised document that you are insured and in some countries the failure to carry a Green Card is of itself a criminal offence.
Fleet operators will be required to obtain a Green Card from their insurers for each individual vehicle they plan to operate in Europe.
Some countries will also require separate trailer insurance to that of the towing vehicle and so a separate Green Card will be required for some trailers.
What happens if you are travelling to Europe without a Green Card on 30 March 2019?
If you are travelling in Europe after the March deadline you will need to carry a Green Card or run the risk of receiving a heavy fine.
However, in more serious cases the driver might get their vehicle seized or even get prosecuted. At a minimum those travelling between UK and Europe should expect long and extensive border checks which might hold-up or halt a road user’s journey.
If our Brexit deal leads to a hard border in Ireland then each vehicle will need to obtain a Green Card to travel between Northern Ireland and the Republic of Ireland.
This will of course have a large impact on fleet companies as they will need to ensure that every driver is carrying a Green Card and is fully covered if they plan to regularly travel between the two countries.
It would be worth reading the Association of British Insurers’ (ABI) guidelines on what motorists will be required to physically carry, how to obtain a Green Card, how long that process might take and how much it is likely to cost.
Whilst the Green Card is free; fleet companies should be aware that insurers may charge administration fees.
There are a number of risks that could emerge if there is a return to the Green Card system, the ABI have identified a couple of key ones worth considering: a lack of clarity over when motorists and fleet operators need to tell their insurer they intended to travel overseas (making last minute trips more difficult), major disruption for commercial fleets, who would need a Green Card for each individual
vehicle, problems will arise if someone’s insurance is due for renewal overseas – they would need to arrange for a replacement document to be sent for them (possibly from their new insurer), and if a driver loses or misplaces their Green Card documents while overseas will be extremely difficult, as they would need to arrange for a replacement document to be sent to them before attempting further travel.
As part of their no-deal Brexit planning fleet operators need to start obtaining Green Cards for their drivers given the serious prospect of returning to the system, which was last used in the 1970s.
The process of obtaining green Cards for each individual vehicle may take longer than some might think given that the documents still have to be physically issued on green paper and cannot be delivered electronically.