ATTIC on Presidential Insurance case: Don’t expand Privy Council judgment

The Association of Trinidad and Tobago Insurance Companies (ATTIC) yesterday expressed concern about views expressed in the media by “certain individuals” on the decision handed down by the Privy Council in the “Presidential Insurance” appeal. In an apparent reference to comments on the issue by Opposition Leader Keith Rowley, ATTIC called some of these statements “misleading.” “One article in particular commented that the decision impacts on ‘hundreds of thousands of vehicles out there, all being operated by persons who have the permission and authority of the owner but whose names are not on the policies.’ The statement is incorrect and misleading.” ATTIC continued: “The Privy Council decision had no such impact. The simple facts of the case were that the insured person requested and was issued a policy of insurance to cover him and one other named driver. “The Motor Vehicle Insurance (Third Party) Act permits an insurance company to issue such a policy. The validity of the policy depends on the strict observance by the insured person of the terms of the cover provided.” The case of Presidential Insurance vs Resha St Hill was brought by the insurance company as a test case “the outcome of which is awaited in a large number of other cases,” by Lord Manse who delivered the judgement on behalf of Lord Phillip, Lord Hale, Lord Dyson and Lord Wilson. The statement from ATTIC said in the case before the Privy Council, a person other than the two named in the policy was driving the vehicle, albeit with the consent of the insured, when the third party was injured. 

 

The terms of the policy did not cover that individual and as a result, the insurance company was not required to indemnify him against any damages sustained by the injured third party. The insurance company had done nothing wrong. “The Privy Council held that the law, and in particular the provisions of section 4(7) of the Act (as amended) simply did not extend the indemnity to the uninsured driver. That is the plain and simple effect of the decision by the Court.” ATTIC also said the Privy Council noted the consequences of the interpretation of the amendment to section 4(7) of the Act since insurers customarily rated motor insurance policies by reference to the driving experience and claims history of those persons permitted to drive the vehicle. “It cautioned that if the section exposed insurers, contrary to the express terms of their policies, to having to indemnify any person injured by anyone driving the vehicle with the consent of the person insured, even though the policy precluded the insured from extending cover to such driver by giving such consent, then insurers would face an open-ended exposure that would not have been contemplated when determining the premium to be charged.”

 

ATTIC added the majority of motor vehicle insurance policies generally cover the insured and anyone driving the vehicle with his or her consent although many contain a provision that excludes persons who are under the age of 25 or with less than two years driving experience. “Separate cover can be obtained for these individuals. Nonetheless, subject to that provision, in circumstances where the person is driving with the consent of the insured and negligently injures or causes property damage to a third party, the insurers are obliged by law to indemnify that driver against any damages awarded by the court in favour of the third party. The decision of the Privy Council has had no impact whatsoever on these policies.” ATTIC said it wants to make it clear that its members have no issue with complying with the provisions of the Act.  “If it is the State’s intention to legislate that insurance companies must provide cover to any person driving any vehicle with the consent of the insured person then the driving public must be made aware, given the Privy Council’s caution, that there will be a commensurate increase in the premium payable.  “For the moment, ATTIC cautions persons driving any vehicle to ensure that the terms of the policy extend cover to them, whether as a named driver or within a class of persons insured.”