DIGBY v. GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORPORATION, LTD.

(1940) 66 Ll.L.Rep. 89

KING'S BENCH DIVISION.

Before Mr. Justice Atkinson.

Motor insurance-Third-party liability- Extension to cover authorised driver -Right of driver to be indemnified against claim by policyholder - Applicability of arbitration clause- Policyholder indemnified by Sect. 2 of policy against "(1) All sums which the policyholder shall become legally liable to pay in respect of any claim by any person (including passengers in the automobile) for loss of life or accidental bodily injury. . . ."- "(3) The insurance under this section shall also extend to indemnify in like manner any person whilst driving any automobile described in the Schedule hereto on the order or with the permission of the policyholder, provided there is no other insurance subsisting under which such person may be indemnified, and that such person shall as though he were the policyholder observe fulfil and be subject to the terms exceptions and conditions of this policy in so far as they can apply. . . ." -Condition 8: "If any difference shall arise between the policyholder and the Corporation, such difference shall be referred with all usual powers to two arbitrators mutually chosen or their umpire, or to one arbitrator if the policyholder and the Corporation shall so agree, and an award shall be a condition precedent to any liability of the Corporation or any right of action against the Corporation" - Collision with another car - Personal injuries sustained by policyholder (travelling as passenger), car being driven by policyholder's chauffeur D.-Action brought by policyholder against other car-D. joined as defendant-Damages awarded against D.-Action brought by D. against insurance company to be indemnified under policy-Action not proceeded with-Matter referred to arbitration without prejudice to insurance company's plea that D. had no arbitration rights under policy - Award in favour of D.-Case stated- Questions for opinion of Court: (1) Whether D. was entitled to avail himself of the arbitration provided for in the policy. (2) Whether, on that assumption, he was entitled to recover the sum of damages awarded against him-Meaning of "third party"- Road Traffic Act, 1930, Sects. 35 (1), 36 (1) (b), 36 (4).