Owners of golf buggies, motorised lawnmowers, mobility scooters and quad bikes used on private land faced having to take out third-party insurance following a European Court of Justice (ECJ) ruling in 2014.

But this latest ‘Brexit win’ means British motorists will save around £50 each year – a combined £2bn – and has helped protect the motorsport sector from potential collapse, according to the Department for Transport (DfT).

A bill to scrap the EU’s Vnuk motor insurance law has passed through parliament and will go on to receive royal assent to confirm changes in the law.

What’s the insurance rule about?

In 2014 the ECJ ruled that compensation for injuries suffered by a Slovenian farm worker by a tractor while on private land should have been covered by compulsory motor insurance.

In the UK, motor insurance is compulsory for vehicles used on public roads, not on private land.

But due to the EU ruling, the UK government was required to change domestic law to extend the scope of compulsory motor insurance for the duration that the UK remained in the EU, including any transition period through Brexit.

Vnuk would have also covered motorsports collisions, potentially involving vehicles from go-karting to Formula One, which would have been treated as regular road traffic incidents requiring insurance.

This could have decimated the motorsports industry according to the DfT, due to additional insurance costs of roughly £458m every single year.

However, in 2017, motoring groups and the insurance industry branded the ‘Vnuk’ move as “unnecessary, unworkable and unfair” saying it would lead to significant disruption and additional costs for motorists.

‘Common sense has prevailed’

Transport secretary, Grant Shapps, said: “Sacking this nonsensical EU rule will protect the pockets of hard-working British people as we continue to help ease cost of living pressures.

“This is another Brexit win and I’m delighted this bill has rightfully passed through parliament, saving billions of pounds of additional insurance costs and protecting our world-leading motorsports sector.”

James Dalton, director, general insurance policy of the Association of British Insurers, said: “Common sense has prevailed and we welcome the Government’s scrapping of this unnecessary and unenforceable requirement.

“Monitoring compliance and enforcement for those using vehicles on private land, as well as establishing the circumstances of any claim, would have been fraught with difficulties and risked increasing fraud which would ultimately end up being paid for by motorists through their insurance premiums.”

Insurance options are already available to people who need cover on their private land, such as farmers.

Motor insurance will still be required for any vehicles being driven on roads or other public places. However, the removal of Vnuk means insurance for vehicles used on private land is not needed.