Insurance Company of the Bahamas Ltd v Eric Antonio (The Bahamas)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Mance |
| Judgment Date | 07 December 2015 |
| Neutral Citation | [2015] UKPC 47 |
| Date | 07 December 2015 |
| Docket Number | Appeal No 0063 of 2014 |
| Court | Privy Council |
[2015] UKPC 47
Privy Council
From the Court of Appeal of the Commonwealth of The Bahamas
Lady Hale
Lord Mance
Lord Wilson
Lord Reed
Lord Toulson
Appeal No 0063 of 2014
Appellant
Brian M Moree QC Genell K Sands
(Instructed by Charles Russell Speechlys)
Respondent
Cedric L Parker Kahlil D Parker
(Instructed by Cedric L Parker & Co)
December 2015
Lord ManceGeneral
Whether a victim of negligent driving can look to insurers of the negligent driver can be vitally important for the victim. But it is a matter over which the victim has commonly no control. It depends upon whether insurance has been arranged by or on behalf of the driver or driver's employer, and it also depends upon the terms of that insurance, subject to limited statutory qualifications to ensure that these cannot always be relied upon as against a third party victim. There are as a result cases including the present — as the Board will humbly advise Her Majesty for reasons which will appear — in which the victim has no insurer to which to look.
That is a problem which could only partially be addressed by extended statutory intervention of the sort which the Board noted as possible in The Presidential Insurance Co Ltd v Resha St Hill [2012] UKPC 33, para 31 and The Presidential Insurance Co Ltd v Mohammed [2015] UKPC 4. Any complete solution, covering in particular situations where no relevant insurance cover exists at all, requires more wide-ranging arrangements, such as the long-established extra-statutory Motor Insurers' Bureau in the United Kingdom and the other national insurers' bureau now required throughout the European Union under Directive 2009/103/EC of 16 September 2009.
The solution is not for courts to impose on insurers liabilities which they are not required to bear either under the insurance cover which they have properly issued or under current legislation. Insurance is based on an assessment of the risks undertaken and of the premiums appropriate to cover such risks. Named driver policies are a means by which insureds and insurers identify the cover required and define and limit the premiums payable. They are permissible under current law in The Bahamas. To impose on insurers liability for accidents caused by other drivers not named on the relevant policy is to expand the risks and to undermine the purpose of named driver cover. If such liability is imposed in respect of insurances already issued, insurers will have received no premiums for such risks. In relation to future insurances, higher premiums would have to be charged across the board, and individual motorists will be unable to obtain the benefits of reduced premiums under named driver cover. Some motorists might not be able to afford the resulting increased premiums.
It is for the legislature in each country where the above problem continues to exist to consider whether and how to address it. The Board endorses the observations made by the President, The Hon Mrs Justice Allen, in the Court of Appeal in para 60 of her judgment in this case, commending to the relevant authorities measures to address the problem for the future.
This appeal
In this appeal, the respondent, Mr Antonio, tragically lost his sight when the car he was driving was on 29 January 2004 in collision with a bus (bus 304, serial no HDB50-0001570) belonging to Convenient City Transit Services Co Ltd ("CCT") and being driven by Stevan Edgecombe in the course of his employment by CCT. The collision was due to Mr Edgecombe's negligence, and on 20 September 2010 Mr Antonio obtained judgment against him and CCT for damages in the sum of $521,943.12 and costs. No part of this has, it appears, been paid.
Pursuant to a proposal dated 2 February 2001, CCT had taken out a policy of insurance with the appellant, Insurance Company of the Bahamas ("ICB"), in respect of six Toyota Coaster buses, including bus 304. The policy was evidently renewed from time to time, at least as regards third party coverage, and bus 304 was, at the time of the accident, the subject of a certificate no 31148001 effective from 9 September 2003 to 28 February 2004. The certificate identified CCT as policyholder and 11 individuals, not including Mr Edgecombe, as "persons or classes of persons entitled to drive".
On 16 December 2010 Mr Antonio issued the present proceedings against ICB claiming, inter alia, that the judgment he had obtained against Mr Edgecombe and CCT was in respect of a liability required to be covered by CCT's policy within the meaning of Part III of the Road Traffic Act, that to the extent that the policy purported to exclude coverage of such liability it was void and that ICB was liable to satisfy the judgment under section 12(1) of the Act.
The Chief Justice, Sir Michael Barnett, held on 9 December 2011 that ICB was not liable, as Mr Edgecombe was not a named driver. The Court of Appeal (Allen P, Blackman JA and John JA) reversed the Chief Justice on 30 May 2013, holding that CCT was as policyholder covered in respect of liability incurred through Mr Edgecombe driving in the course of his employment, and also expressing the view that, even if this had not been so, section 12(1) of the Act invalidated any policy term which purported to limit ICB's third party liability. ICB appeals with leave granted by the Court of Appeal.
Road Traffic Act
Part III of the Road Traffic Act includes these provisions:
"8. (1) Subject to the provisions of this Part of this Act, it shall not be lawful for any person to use, or to cause or permit any other person to use, a motor vehicle on a road unless there is in force in relation to the user of the vehicle by that person or that other person, as the case may be, such a policy of insurance as complies with the requirements of this Part of this Act.
…
10. (1) In order to comply with the requirements of this Part of this Act, a policy of insurance must be a policy which —
…
(b) in the case of a public service vehicle (other than a self-drive vehicle), insures such person, persons or classes of persons as may be specified in the policy in respect of liability which may be incurred by him or them in respect of —
(i) the death of or bodily injury to any person (including any passenger being carried for hire or reward) caused by or arising out of the use of the vehicle on a road …
(3) Notwithstanding anything in any enactment, a person issuing a policy of insurance under this section shall be liable to indemnify the persons or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of persons.
(4) A policy shall be of no effect for the purposes of this Act unless and until there is issued by the authorised insurer in favour of the person by whom the policy is effected a certificate (in this Act referred to as a 'certificate of insurance') in the prescribed form and containing such particulars of any conditions subject to which the policy is issued and of any other matters as may be prescribed, and different forms and different particulars may be prescribed in relation to different cases or circumstances, by regulations made by the Minister under this Act, and in the absence of any such regulations, then by the Controller.
…
11. Any condition in any policy issued or given for the purposes of this Part of this Act, providing that no liability shall arise under the policy, or that any liability so arising shall cease, in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy, shall be of no effect in connection with such claims as are mentioned in paragraph (b) … of subsection (1) of section 10 of this Act:
Provided that nothing in this section shall be taken to render void any provision in a policy requiring the person insured to repay to the insurer any sums which the insurer may have become liable to pay under the policy and which have been applied to the satisfaction of the claims of third parties.
12. (1) If, after a certificate of insurance has been issued under subsection (4) of section 10 of this Act to the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under paragraph (b) … of subsection (1) of section 10 of this Act (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability …
15. (1) Any person against whom a claim is made in respect of any such liability as is required to be covered by a policy under paragraph (b) … of subsection (1) of section 10 of this Act shall, on demand by or on behalf of the person making the claim, state whether or not he was insured in respect of that liability by any policy having effect for the purposes of this Act, or would have been so insured if the insurer had not avoided or cancelled the policy, and, if he was or would have been so insured, give such particulars with respect to that policy as were specified in the certificate of insurance delivered in respect thereof under subsection (4) of the said section 10."
The policy stated at its outset:
"Under the Policy Terms and Endorsements, we will insure you against certain legal...
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