The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A driver “tragically blinded” in a 2004 accident with a jitney cannot enforce a $521,943 damages judgment against a Bahamian insurer because the courts are unable to impose liabilities excluded from policy coverage, the Privy Council ruled yesterday.

The UK-based court, the highest in the Bahamian judicial system, found that Eric Antonio could not demand damages from Insurance Company of the Bahamas (ICB) even though it had insured the jitney responsible for the crash.

This, the Privy Council said, was because the jitney’s driver, Stevan Edgecombe, was not among the 11 Convenient City Transit Services employees named on the ICB policy as persons ‘authorised’ to drive the vehicle.

This ‘restricted driver’ clause, which insurers use to limit their payout liability exposure only to accidents involving drivers named on the policy, thus barred Mr Antonio’s claim.

Lord Mance, in his verdict on behalf of the five-strong Privy Council panel, said Mr Antonio’s case fell into a category where accident victims have “no insurer to which to look” for compensation for their injuries.

He added that if the Privy Council had upheld the Court of Appeal’s earlier ruling, and backed Mr Antonio, some Bahamian motorists would be unable to afford the resulting auto insurance premium increases.

And, significantly, Lord Mance seemed to imply that the Bahamas should follow the UK and European Union’s (EU) lead and set up a special fund, financed by the insurance industry, to compensate accident victims who were ineligible for insurance compensation (see other article on Page 1B).

“Whether a victim of negligent driving can look to insurers of the negligent driver can be vitally important for the victim,” Lord Mance wrote.

“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.”

Lord Mance added that if the Privy Council were to support Mr Antonio, it would “undermine” the insurance industry’s risk mitigation efforts and result in “higher premiums across the board” for Bahamian motorists.

“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,” Lord Mance said.

“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,” he continued.

“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.”

Recalling the background to the case, the Privy Council said Mr Antonio “tragically lost his sight” when his car collided with the Convenient City Transit Services jitney on January 29, 2004.

The collision was due to the “negligence” of its driver, Mr Edgecombe, and Mr Antonio obtained a $521,943 damages judgment against him and his employer on September 29, 2010.

This sum has yet to be paid, but Mr Antonio and his attorneys within several months of obtaining the judgment turned their attention to ICB, which had insured Convenient City Transit Services’ (CCT) six Toyota Coaster buses - including the vehicle involved in the accident.

The insurance policy was valid at the time of the accident, and Mr Antonio initiated legal proceedings against ICB on December 16, 2010, alleging that its exclusions were void and that the insurer was liable to cover the damages award.

The then-Chief Justice, Sir Michael Barnett, ruled in ICB’s favour in late 2011, but the Court of Appeal reversed this in May 2013, finding that the Road Traffic Act’s section 12(1) “invalidated” any policy terms that attempted to limit the insurer’s liability.

Mr Antonio and his attorneys, Cedric and Khalil Parker, argued that CCT was covered for third party liabilities related to death/injury should the jitney he collided with be involved in an accident.

And, under the policy’s section 2 “and/or to give business efficacy to the insurance”, this coverage included liabilities resulting from any employee’s negligence, including Mr Edgecombe, even if he was not among the ‘authorised drivers’.

Mr Antonio and his attorneys argued that the “focus should be on the policy”, not the Certificate of Insurance. This, though, was rejected by the Privy Council, which said they must be read together.

“The Board has no hesitation in rejecting these submissions as advancing an impossible construction of the policy,” Lord Mance concluded.

“Secondly, the policy is at pains to identify the persons who are covered to drive ‘your’ [ie CCT’s] vehicle or who are covered under ‘your’ policy as the persons stated in the Certificate, and to point out that ‘adding a new driver’ would involve a ‘change to your policy’ which would require return of the Certificate.”

Lord Mance also described as “fallacious” the suggestion that because CCT was a company, the policy must cover all employees - regardless of whether they are named on it as authorised drivers - to have “business efficacy”.

CCT’s application for coverage conceded that one or some of its drivers had been charged with motoring offences, and been involved in an accident within the previous five years.

However, breaking down Mr Antonio’s argument, Lord Mance found: “The idea that the 11 named drivers were all neighbours on the block whom, for unexplained reasons, unconnected with its business, CCT was prepared to allow to drive its buses is not only inconsistent with the proposal answer that the only purposes for which the six buses were to be used were carriage of fare paying passengers, but is absurd.

“It is Mr Antonio’s case that leads to business incongruity, for two reasons. First, it would mean that, despite the care taken by the proposal to identify all those persons likely to drive, and to assess their record, ICB was insuring all and any persons whom CCT cared to employ to drive its six buses, without disclosure of their identity or driving record to ICB and so without ICB having any means to decline, assess or rate the risks thereby presented......

“Quite apart from any obligation which an employer may or may not have in this regard as a matter of law, it is implausible that a responsible employer or insurance scheme would operate on such a basis.”