Bianca Samuels | Amendment needed to insurance law
In my humble opinion, there is an urgent need for an amendment to the Motor Vehicles Insurance (Third Party-Risks) Act, the relevant portion of which stipulates that:
18. (2) Subject to Subsection (lA), no sum shall be payable by an insurer under the foregoing provisions of this section-
(b) in respect of any judgment, unless before or within ten days after the commencement of the proceedings in which the judgment was given, the insurer had notice of the bringing of the proceedings; or [my emphasis]
That section embodies a requirement for notice of proceedings to be served on the insurance company of a defendant, within 10 days of the filing of the claim, failing which the insurance company need not provide coverage in respect of a judgment against the defendant.
It would be superficial, however, to read the above-mentioned section in isolation of the following rules of our Civil Procedure rules, 2002 which read as follows:
r. 8.1 (1): A Claimant who wishes to start proceedings must file ...
(a) the claim form; and
(b) unless either rule 8.2(1)(b) or 8.2(2) applies-
(i) the particulars of claim; or
(ii) where any rule or practice direction so requires or allows, an affidavit or other document giving the details of the claim required under this part.
r. 8.14: The general rule is that a claim form must be served within 12 months after the date when the claim was issued or the claim form ceases to be valid.
These Civil Procedure Rules make nonsense of the 'ten (10) days after proceedings are commenced' stipulation of the aforementioned Act, in that the claimant can wait all of 12 months after commencing proceedings to serve the claim on the defendant, leaving him and his insurers completely unaware that he [the claimant] had, one year ago, started the proceedings!
What this means is that despite the fact that the above-mentioned section of the Motor Vehicles Insurance (Third Party-Risks) Act does not place the responsibility of giving notice on any particular party, the effect of that section, read in conjunction with the above-mentioned Civil Procedure Rules, is that the claimant is vested with the great power of determining whether or not the defendant is ultimately covered under his insurance policy and at the risk of sounding clichÈ, with great power, comes great responsibility.
A defendant may be completely unaware of the commencement of proceedings by the claimant for all of 12 months before the claim form is served on him, and in his innocent ignorance, may thereby lose the opportunity to notify his insurers of the pending claim against him within the 10-day period stipulated by the Act.
Should the claimant fail to serve the claim form on the defendant within that 10-day time frame (which by virtue of the Civil Procedure rules cited above, he is entitled to do) and in so doing fail to serve notice of the proceedings on the defendant's insurance company within that time, it is open to that insurance company to then deny coverage of the judgment awarded against the defendant, leaving the defendant exposed not covered by his own policy.
In short, the claimant's failure to serve the required notice on the defendant's insurers himself or his failure to move with the requisite alacrity necessitated by the Act, may have the potential to cause the defendant to lose the advantage of being covered under his insurance policy, in circumstances where the defendant himself is not in breach of his policy of insurance and has himself failed to do nothing.
While Section 19 of the said Act does place a duty on the Registrar of the Supreme Court or clerk of court of any Parish Court (formerly the resident magistrate's court) to intervene and serve the relevant notice on the defendant's insurance company within ten days of the commencement of proceedings, in practice, this is almost never carried out. That section, therefore, provides no practical protection to the parties and the danger thus continues to loom.
Motorists should know that they would have wasted paying their motor vehicle premiums and may be exposed by the failure of the party suing them to pay millions out of their own pockets, while the insurance company goes off scot-free, with no liability, keeping all their premiums for itself. The pro-insurance clause in Section 18 (2) of the law above must necessarily be repealed to ensure that both insured and the injured are protected under the relevant insurance policy following an accident.