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RTA - named drivers - insurers liability
7 December 2015
Lady Hale, Lord Mance, Lord Wilson, Lord Reed, Lord Toulson
The Road Traffic Act 1958 (Bahamas) does not invalidate insurance policies which limit coverage to named drivers as this would be an untenable extension neither in the interests of the public nor permissible following a correct reading of the provision.
The appeal concerned the claimant, Mr Antonio who suffered personal injury following a road traffic accident on 29 January 2004. The bus was driven by Mr Stevan Edgecombe during the course of his employment and Mr Antonio obtained judgment for damages against him and his employers CCT. This appeal concerns the validity of CCT’s insurance policy with ICB and whether as an unnamed driver Mr Edgecombe was covered by the policy.
At first instance the Chief Justice determined that ICB was not liable as Mr Edgecombe was not a named driver, this decision was reversed by the Court of Appeal holding that CCT was as policyholder covered in respect of liability incurred through Mr Edgecombe driving in the course of his employment, and even if he was not, s 12(1) of the Act invalidated any policy term purporting to limited ICB’s third party liability.Article continues below...
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The policy in question stated in its introduction that the certificate of insurance is the most important part of the policy and in its schedules it went on to specify the specific terms. Item 5 listed the 11 names of the persons or classes of persons entitled to drive. Approaching the scope of the policy generally the court concluded generally that the imposition on insurers of liability for accidents caused by drivers not named on the policy undermines the purpose of named driver cover.
It was incorrect to construe that CCT as a policyholder is classed as a driver unless CCT was named in Item 5. If CCT was a driver then unnamed drivers would be free of the limitations applicable to named drivers. The policy did therefore not cover Mr Edgecombe as he was not entitled to drive the vehicle under Item 5 of the certificate.
Finally the court overturned the Court of Appeal’s decision that s 12(1) of the Road Traffic Act invalidated the policy on the basis that it limited the third party insurers rights as the Court of Appeal effectively ignored the wording of the section. That section expressly concerns itself with judgments against an insured third party liability covered by the terms of the policy and which then is attempted to be avoided. The court determined that there was nothing in the Act or in case law which made insurers liable to meet liabilities against them regardless of any restriction in the scope of cover.
Whilst each case is fact sensitive, this case clearly shows that in some instances victims of road traffic accidents, injured through no fault of their own can end up without compensation even if liability is established. Employers who allow their employees not named on policies or policies which are as specific, as the one subject of this action, should face criminal sanctions for breaching policy terms.
Sandra De Souza and Amy Wedgwood, Anthony Gold Solicitors