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CHAPTER 1 Brief history of the insurance obligation and interaction with the EU law

Law of Compulsory Motor Vehicle, The

Page 1 CHAPTER 1 Brief history of the insurance obligation and interaction with the EU law Introduction 1.1 Motor vehicle insurance is a type of compulsory insurance the absence of which renders the use of a motor vehicle a criminal offence under the Road Traffic Act 1988. 1 The rules that govern the compulsory liability insurance for motor vehicle accidents (Motor Third Party Liability (MTPL)) do not derive from the domestic legislation or the common law court cases only. The Directives of the European Union 2 aiming to harmonise the rules applicable to insurance of civil liability with respect to motor vehicle accidents also influence the interpretation of such rules considerably. Therefore, the sources of the principles applicable to insurance of civil liability for motor vehicle accidents may be summarised mainly as the domestic statutory provisions, the relevant EU Directives, the common law court cases interpreting the domestic provisions and the decision of the Court of Justice of the European Union (CJEU) interpreting the relevant EU Directives.

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