The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Court of Appeal's president yesterday renewed her call for a fund to compensate victims of uninsured and 'hit and run' drivers, after rejecting a $654,000 claim against Bahamas First.

Dame Anita Allen, in overturning a previous Supreme Court verdict, said she "reiterates my commendation" for the Government to create a protection fund that would make payouts to injured drivers and other road users unable to claim against the perpetrator's insurance.

Yesterday's judgment, which ruled that Eleuthera residents, Monica and Betty Thompson, were unable to claim against Bahamas First, recalled Dame Anita's call - made some four-and-a-half years earlier over a similar case - for this country to establish a fund similar to the UK's Motor Insurers Bureau.

Founded in 1946, the Bureau provides compensation to UK victims of accidents caused by uninsured and untraced drivers, and Justice Allen said in June 2013 that a similar entity would mitigate "the injustice of innocent, uncompensated third parties" in the Bahamas.

There has been no move by the Government, though, to act on her suggestion, even though Dame Anita's comments are likely to strike a chord with many Bahamians who have either been a victim themselves - or seen family and friends suffer - as a result of being unable to claim against the culprit's insurance.

Apart from the large number of uninsured drivers on Bahamian roads, which the insurance industry estimates at 20-25 per cent or between one in four and one in five of all road users, motorists also have to contend with 'unauthorised' drivers.

These are persons who are not named among a vehicle's 'authorised drivers' on its insurance policy. Bahamian property and casualty insurers typically use this clause as a way to minimise their risk, meaning they are not liable for claims payouts if an 'unauthorised' driver is responsible for an accident.

This was the case with the Thompsons, who were badly injured in an accident that occurred almost 14 years ago. They were in a vehicle hit on February 27, 2004, by a 1998 Dodge Ram owned by an Annette Young.

She had given the Dodge Ram to Samuel Bethel, a mechanic, to make repairs, and it was he who was "on a test drive" when the collision with the Thompsons happened. The Supreme Court, on April 8, 2005, ruled that Young and Bethel were liable to pay damages worth $391,647 to Monica Thompson and $262,497 to Betty Thompson.

The Thompsons then sought to enforce that judgment by bringing a Supreme Court action against Bahamas First, which had insured Young and Bethel under different policies. Justice Milton Evans, in a February 27, 2014, verdict found in favour of the Thompsons and ordered that the insurance underwriter pay the $654,000 damages award.

Bahamas First immediately appealed, arguing that the policies issued to both Young and Bethel were "not capable of providing indemnity" for the judgement award in 2005.

Dame Anita, writing the Court of Appeal's verdict, said Young's policy permitted only herself and Scott Young to drive the Dodge Ram as 'authorised' drivers. And it explicitly stated that Bahamas First would not be liable for a claim payout if the vehicle was "being driven by any person other than an authorised driver".

Given that Bethel was not listed as an 'authorised' driver of the vehicle, Dame Anita found: "In my opinion, the contemplated liability capable of existing under the Young policy could only arise through the authorised drivers.

"As such, liability under the policy is specifically excluded where the driver of the vehicle is not one authorised to drive. This must necessarily be true, as to hold otherwise would render the 'person or classes of persons entitled to drive' provision in the certificate of insurance meaningless.

"Further, it would prevent an insurance company from being able to assess and determine the extent of the liability which the policy covers."

The Thompsons and their attorney, Lady Sharon Wilson, argued that Bahamas First was liable to payout based on the requirement for Young to maintain the vehicle, which she was doing by giving it to the mechanic for repairs.

However, Dame Anita rejected this on the basis that having a vehicle repaired by a mechanic "does not.... translate into expanded liability of the insurance policy".

She added: "Some further step must be taken to facilitate such an expansion by, for example, the mechanic undertaking business insurance or Young naming Bethel as an authorised driver under her policy.

"Therefore, in my view, the learned judge erred by equating Young's duty to maintain the vehicle with the imposition of liability on the appellant company [Bahamas First], and this ground of appeal succeeds."

Turning to the Thompsons' efforts to enforce the 2005 judgment against Bethel's Bahamas First coverage, Dame Anita said the mechanic's insurance policies only applied to two vehicles he owned.

Given that neither vehicle was involved in the accident, she found it was impossible to enforce the 2005 judgment by claiming against their respective insurance coverage.

"I find that the learned judge [Milton Evans] erred by determining that Bethel's policies were capable of providing an indemnity for the respondents' claim," Dame Anita found.

"I readily accept that Young is not to be faulted for engaging the services of a mechanic. However, I maintain that Bethel ought to have insured against the possibility of this eventuality."

Dame Anita described the case as "unfortunate", given that not a cent in compensation has been paid to the Thompsons, whose 2005 judgment remains "wholly unsatisfied".

She recalled her previous ruling, and that of the Privy Council, in the case involving Eric Antonio, who was "tragically blinded" in a 2004 accident with a jitney.

The Privy Council, the highest court in the Bahamian judicial system, found that Mr Antonio was unable to enforce a $521,943 damages judgment against the jitney's insurer, Insurance Company of the Bahamas (ICB), because the driver was not among those 'authorised' to operate the vehicle.

It ruled that the courts are unable to impose liabilities excluded from policy coverage, as Bahamian property and casualty underwriters use the 'restricted driver' clause to limit their payout exposure only to accidents involving drivers named on a policy.

"Insurance is based on an assessment of the risks undertaken, and of the premiums appropriate to cover such risks," the Privy Council said in its December 2015 ruling on the Antonio case.

"Named driver policies are a means by which insureds and insurers identify the cover required, and define and limit the premiums payable...... 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..."

Both Dame Anita yesterday, and the Privy Council in its ruling, called on the Government and Parliament to address situations such as those of Antonio and the Thompsons through legislation and the creation of a fund to protect innocent road accident victims.

Lord Mance, the UK law lord who wrote the Privy Council judgment, suggested the Bahamas follow the lead established by the UK and European Union (EU), and set-up a fund financed by the insurance industry.

However, Bahamian insurance industry executives have warned that such a fund could be prohibitively expensive given the number of uninsured drivers on this country's roads. They suggested that increased insurance premiums could be required to finance it.