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Passengers on Lorries: Vital Insurance Case

3rd April 1936, Page 68
3rd April 1936
Page 68
Page 68, 3rd April 1936 — Passengers on Lorries: Vital Insurance Case
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Which of the following most accurately describes the problem?

AN important decision affecting the insurance of commercial vehicles was delivered, on Monday, by Mr. Justice MacKinnon in the King's Bench Division. He was confirming an arbitrator's aWard of £850 damages and costs to Mrs. Rebecca lizard, of The Street, Brightwell, Berk% for the death of her husband in a motor accident. The respondent was the Universal Insurance Co , Ltd., formerly known as the Universal Automobile Insurance Co., Ltd.

The facts on which the arbitrator made his award were as follow :—Mr. William Druce, a haulage contractor, took out a policy of insurance with the respondent company. In the proposal form for a commercial-vehicle policy, the question, " Is passenger risk to be covered? ' was answered in the negative.

Company Not Liable.

There was also a proviso in the policy that the company should net be liable for " death of or bodily injury to any person (other than a passenger carried by reason of or in pursuance of a contract ot OmplOyinent) .being carried in or upon such yehicle."

Mr. Druce entered into a haulage contract with Industrial Builders Ltd.; there was also a verbal contract between Mr. George Bernard Izzard, the dead man. tnat a conveyance should be provided to carry him from Coventry to his home near Dicicot at week. ends.

At the time of the accident, Mr. Izzard and 16 other workmen were being carried home in Mr. Druce's lorry, which overturned, three work. men being killed and 14 injured.

Mrs. Izzard sued Mr. Druce and was awarded £850 damages and costs. Owing to the claims made following the accident, Mr .Druce was adjudicated bankrupt. Mrs. lizard then claimed under the Third Parties Rights Against Insurers Act 1930, against the respondent company, which denied liability. The arbitrator's award was in respect of this claim.

Passenger Risk.

For the respondent it was contended that the words in Mr. Druce's proposal form. ' Is passenger risk to be covered?—No," constituted a warranty that the vehicle would not be used for carrying passengers; that the vehicle was being used for other purposes than provided foi in the schedule of the policy, that Mrs. lizard's claim arose through a contractual liability excepted from the policy; and that Mr. lizard was not being carried in pursuance of a contract of employment.

On behalf of Mrs. Izzard it was denied that the passenger-risk reference in the proposal was a warranty that no passengers would be carried, and it was submitted that the words " con , . tract of employment " referred to a contract between the passenger and someone other than Mr. Druce. The arbitrator, upheld the contentions for Mrs. lizard.

Mr. Tristram Beresford, K.C., for the insurance company, argued that if the claimant were right insurance 'companies would have to revise their policies if they knew that they had to cover not only commercial risks but the same risks as for coaches.

Giving judgment, Mr. Justice MacKinnon said that the words of the proviso were copied verbatim from Section 36 of the Road Traffic Act, 1930. The

question was whether the words " with the assured " should be added to the words "contract of employment" contained in the proviso. The point of law was whether the true Construction ot the proviso meant a contract with any other contracting party

than the assured. • • He saw no reason to add to the proviso, and the insurance company was accordingly liable to indemnify Mr. Druce in respect of the death of Mr. Izzard, who was being carried in pursuance of a contract.

Dealing with the phrase in the proposal form, the judge said that the company was subject to the obligations of the Road Traffic Act, and it was clear that the company, under the Act, was liable fot the death of, or injury to, a person lying carried in pursuance of a contract of employment.

He accordingly confirmed the arbitrator's award, and allowed costs against the insurance company.

It was stated that the 'decision in that case would govern -further claims arising out of the accident, and it Was intimated 'that there might be an appeal against the ruling of the Court.

A stay of execution was granted" on terms.


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