Comparison View

Formal Consolidation |  2020 RevEd
Duty of insurers to satisfy judgments against persons insured in respect of third-party risks
9.—(1)  Subject to this section, if after a certificate of insurance has been issued under section 4(9) to the person by whom a policy has been effected, judgment in respect of any liability required to be covered by a policy under section 4(1)(b) (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, even though the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the following apply to the insurer:
(a)where the sum payable (excluding any amount payable in respect of costs and interest by virtue of any written law relating to interest on judgments) under the judgment to any person entitled to the benefit of the judgment in respect of the liability does not exceed the relevant amount, the insurer may pay that sum, together with any amount payable in respect of costs and interest on the sum by virtue of any written law relating to interest on judgments, to the person;
(b)where the sum payable (excluding any amount payable in respect of costs and interest by virtue of any written law relating to interest on judgments) under the judgment to any person entitled to the benefit of the judgment in respect of the liability exceeds the relevant amount, the insurer must pay that sum, together with any amount payable in respect of costs and interest on the sum by virtue of any written law relating to interest on judgments, directly to —
(i)the Public Trustee as trustee for the person if the person is a specified person and the judgment requires the sum to be paid to the Public Trustee as trustee for the person; or
(ii)in any other case, the person in accordance with the judgment and with any rules made under this Act.
[22/2013]
(2)  Despite subsection (1)(b)(i) providing for payment to the Public Trustee, the right of action created by the judgment referred to in that subsection vests in the person or persons entitled to the benefit of the judgment.
[22/2013]
(3)  Subject to subsection (5), payment must not be made under subsection (1)(b) until the costs payable to any public officer or any advocate and solicitor who acts or has acted in respect of the claim or action (relating to the judgment) on behalf of the person entitled to the benefit of the judgment have been determined in accordance with section 18(3).
[22/2013]
(4)  Before making any payment under subsection (1)(b), the insurer must deduct from it the costs referred to in subsection (3) and pay the costs directly to the public officer or the advocate and solicitor entitled to it.
[22/2013]
(5)  Nothing in subsection (1)(b)(i), (3) or (4) prevents the insurer from making any interim payment of compensation of any amount to any person entitled to the benefit of compensation.
[22/2013]
(6)  No sum is payable by an insurer under subsections (1) and (4) —
(a)in respect of any judgment unless before or within 7 days after the commencement of the proceedings in which the judgment was given the insurer had notice of the bringing of the proceedings;
(b)in respect of any judgment so long as execution on the judgment is stayed pending an appeal; or
(c)in connection with any liability if before the happening of the event which was the cause of the death or bodily injury giving rise to the liability the policy was cancelled by mutual consent or by virtue of any provision contained in the policy and either —
(i)before the happening of that event the certificate was surrendered to the insurer or the person to whom the certificate was issued made a statutory declaration stating that the certificate had been lost or destroyed;
(ii)after the happening of that event but before the end of a period of 14 days from the taking effect of the cancellation of the policy the certificate was surrendered to the insurer or the person to whom the certificate was issued made such a statutory declaration as aforesaid; or
(iii)before or after the happening of that event but within the period of 14 days the insurer commenced proceedings under this Act in respect of the failure to surrender the certificate.
[22/2013]
(7)  No sum is payable by an insurer under subsections (1), (4) and (6) if in an action commenced before or within 3 months after the commencement of the proceedings in which the judgment was given the insurer has obtained a declaration that apart from any provision contained in the policy the insurer is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular or, if the insurer has avoided the policy on that ground, that the insurer was entitled to do so apart from any provision contained in it.
[22/2013]
(8)  An insurer who has obtained a declaration under subsection (7) in an action does not thereby become entitled to the benefit of that subsection as respects any judgment obtained in proceedings commenced before the commencement of that action unless before or within 7 days after the commencement of that action the insurer has given notice thereof to the person who is the plaintiff in those proceedings specifying the non-disclosure or false representation on which the insurer proposes to rely and any person to whom notice of such an action is so given is entitled if that person thinks fit to be made a party to the action.
(9)  If the amount which an insurer becomes liable to pay under this section in respect of a liability of a person insured by a policy exceeds the amount for which the insurer would apart from this section be liable under the policy in respect of that liability, the insurer is entitled to recover the excess from that person.
(10)  In this Act, references to a certificate of insurance in any provision relating to the surrender or the loss or destruction of a certificate of insurance are, in relation to policies under which more than one certificate is issued, to be construed as references to all the certificates and are, where any copy has been issued of any certificate, to be construed as including a reference to that copy.
(11)  Every judgment referred to in subsection (1)(b) —
(a)must state the amount payable to each person entitled to the benefit of the judgment; and
(b)must require the costs referred to in subsection (3) to be paid directly to the public officer or the advocate and solicitor entitled to it.
[22/2013]
(12)  Every payment to the Public Trustee under subsection (1)(b)(i) must be made in the manner, and together with the documents and information, that the Public Trustee may require.
[22/2013]
(13)  The Public Trustee must, after deducting any fee payable to him or her for acting as trustee, distribute the moneys received by him or her under a judgment in accordance with subsection (1)(b)(i) directly to the persons entitled in accordance with the judgment and with any rules made under this Act.
[22/2013]
(14)  In this section —
“judgment” includes an approval of the court obtained under Order 76, Rule 10 or 11 of the Rules of Court;
“liability covered by the terms of the policy” means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy;
“material” means of such a nature as to influence the judgment of a prudent insurer in determining whether the insurer will take the risk and if so at what premium and on what conditions.
[22/2013]
Informal Consolidation | Amended Act 31 of 2022
Duty of insurers to satisfy judgments against persons insured in respect of third-party risks
9.—(1)  Subject to this section, if after a certificate of insurance has been issued under section 4(9) to the person by whom a policy has been effected, judgment in respect of any liability required to be covered by a policy under section 4(1)(b) (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, even though the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the following apply to the insurer:
(a)where the sum payable (excluding any amount payable in respect of costs and interest by virtue of any written law relating to interest on judgments) under the judgment to any person entitled to the benefit of the judgment in respect of the liability does not exceed the relevant amount, the insurer may pay that sum, together with any amount payable in respect of costs and interest on the sum by virtue of any written law relating to interest on judgments, to the person;
(b)where the sum payable (excluding any amount payable in respect of costs and interest by virtue of any written law relating to interest on judgments) under the judgment to any person entitled to the benefit of the judgment in respect of the liability exceeds the relevant amount, the insurer must pay that sum, together with any amount payable in respect of costs and interest on the sum by virtue of any written law relating to interest on judgments, directly to —
(i)the Public Trustee as trustee for the person if the person is a specified person and the judgment requires the sum to be paid to the Public Trustee as trustee for the person; or
(ii)in any other case, the person in accordance with the judgment and with any rules made under this Act.
[22/2013]
(2)  Despite subsection (1)(b)(i) providing for payment to the Public Trustee, the right of action created by the judgment referred to in that subsection vests in the person or persons entitled to the benefit of the judgment.
[22/2013]
(3)  Subject to subsection (5), payment must not be made under subsection (1)(b) until the costs payable to any public officer or any advocate and solicitor who acts or has acted in respect of the claim or action (relating to the judgment) on behalf of the person entitled to the benefit of the judgment have been determined in accordance with section 18(3).
[22/2013]
(4)  Before making any payment under subsection (1)(b), the insurer must deduct from it the costs referred to in subsection (3) and pay the costs directly to the public officer or the advocate and solicitor entitled to it.
[22/2013]
(5)  Nothing in subsection (1)(b)(i), (3) or (4) prevents the insurer from making any interim payment of compensation of any amount to any person entitled to the benefit of compensation.
[22/2013]
(6)  No sum is payable by an insurer under subsections (1) and (4) —
(a)in respect of any judgment unless before or within 7 days after the commencement of the proceedings in which the judgment was given the insurer had notice of the bringing of the proceedings;
(b)in respect of any judgment so long as enforcement on the judgment is stayed pending an appeal; or
[Act 25 of 2021 wef 01/04/2022]
(c)in connection with any liability if before the happening of the event which was the cause of the death or bodily injury giving rise to the liability the policy was cancelled by mutual consent or by virtue of any provision contained in the policy and either —
(i)before the happening of that event the certificate was surrendered to the insurer or the person to whom the certificate was issued made a statutory declaration stating that the certificate had been lost or destroyed;
(ii)after the happening of that event but before the end of a period of 14 days from the taking effect of the cancellation of the policy the certificate was surrendered to the insurer or the person to whom the certificate was issued made such a statutory declaration as aforesaid; or
(iii)before or after the happening of that event but within the period of 14 days the insurer commenced proceedings under this Act in respect of the failure to surrender the certificate.
[22/2013]
(7)  No sum is payable by an insurer under subsections (1), (4) and (6) if in an action commenced before or within 3 months after the commencement of the proceedings in which the judgment was given the insurer has obtained a declaration that apart from any provision contained in the policy the insurer is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular or, if the insurer has avoided the policy on that ground, that the insurer was entitled to do so apart from any provision contained in it.
[22/2013]
(8)  An insurer who has obtained a declaration under subsection (7) in an action does not thereby become entitled to the benefit of that subsection as respects any judgment obtained in proceedings commenced before the commencement of that action unless before or within 7 days after the commencement of that action the insurer has given notice thereof to the person who is the claimant in those proceedings specifying the non-disclosure or false representation on which the insurer proposes to rely and any person to whom notice of such an action is so given is entitled if that person thinks fit to be made a party to the action.
[Act 25 of 2021 wef 01/04/2022]
(9)  If the amount which an insurer becomes liable to pay under this section in respect of a liability of a person insured by a policy exceeds the amount for which the insurer would apart from this section be liable under the policy in respect of that liability, the insurer is entitled to recover the excess from that person.
(10)  In this Act, references to a certificate of insurance in any provision relating to the surrender or the loss or destruction of a certificate of insurance are, in relation to policies under which more than one certificate is issued, to be construed as references to all the certificates and are, where any copy has been issued of any certificate, to be construed as including a reference to that copy.
(11)  Every judgment referred to in subsection (1)(b) —
(a)must state the amount payable to each person entitled to the benefit of the judgment; and
(b)must require the costs referred to in subsection (3) to be paid directly to the public officer or the advocate and solicitor entitled to it.
[22/2013]
(12)  Every payment to the Public Trustee under subsection (1)(b)(i) must be made in the manner, and together with the documents and information, that the Public Trustee may require.
[22/2013]
(13)  The Public Trustee must, after deducting any fee payable to him or her for acting as trustee, distribute the moneys received by him or her under a judgment in accordance with subsection (1)(b)(i) directly to the persons entitled in accordance with the judgment and with any rules made under this Act.
[22/2013]
(14)  In this section —
“judgment” includes an approval of the court obtained under Order 44, Rule 9 or 10 of the Rules of Court 2021 (approval of compromise, settlement, etc., relating to claim by person under disability);
[Act 31 of 2022 wef 01/11/2022]
“liability covered by the terms of the policy” means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy;
“material” means of such a nature as to influence the judgment of a prudent insurer in determining whether the insurer will take the risk and if so at what premium and on what conditions.
[22/2013]