Important points of law with regard to rights of contribution between two insurance companies where both are under a statutory liability to meet an injured person’s (third party’s) claim when the driver responsible fails to do so were recently considered by the Privy Council on Appeal from the Court of Appeal of the Bahamas in Eagle Star Ltd. v. Provincial Insurance Plc.1

The insured person, Mr Simms, suffered injuries as a result of the negligent driving of Mr O’Reilly. The car which O’Reilly had been driving had been lent to him by a car repairer. Simms obtained judgment against O’Reilly, but O’Reilly did not meet the judgment. Simms therefore brought proceedings against Eagle Star (O’Reilly’s insurers) and Provincial (the repairer’s insurers under the Road Traffic Act, s. 12). The trial judge having decided that O’Reilly was an authorized driver, Simms obtained judgment for the full amount of his claim against both insurance companies. The judge at first instance, Thorne, J., also ordered Provincial to indemnify Eagle Star and dismissed Provincial’s claim for 50% contribution from Eagle Star. This was because Eagle Star had, prior to the event giving rise to the claim, cancelled the policy, although, owing to its failure to obtain surrender of the certificate of insurance, it remained statutorily liable to third parties.

Thorne, J. ‘s basis for arriving at this decision was as follows: (i) Where there are