Ramsook v Crossley

An insurer’s contractual power to take over and conduct a third-party claim in the insured’s name may arise before proceedings and may include waiving service, entering an appearance, admitting liability and defending quantum. That authority can bind the claimant even if the insurer failed to consult or inform the insured. It does not, however, release the insurer or its lawyers from duties to obtain the insured’s account, take proper instructions and keep the insured informed where personal exposure is substantial. Breach of those duties is ordinarily a matter between insurer, lawyer and insured; it does not invalidate proceedings or affect a claimant unaware of the breach.

Mr Ramsook, a police officer, was seriously injured when his vehicle collided with one driven by Mrs Crossley. He brought proceedings against Mrs Crossley and the Attorney General. TATIL, Mrs Crossley’s insurer, instructed an attorney who entered an appearance and defence admitting liability, although Mrs Crossley had not been served and had not given instructions.

Judgment was entered and damages were later assessed at approximately $3.6m. Mrs Crossley applied to set aside the judgment after learning of the proceedings. Des Vignes J accepted that she had not been served and that the attorney had acted without authority, and set aside the judgment and subsequent proceedings. The Court of Appeal dismissed Mr Ramsook’s appeal. The central issue before the Board was whether clause 15 of the insurance policy authorised TATIL and its attorney to conduct the claim in Mrs Crossley’s name.

The appeal was allowed. The judgment of des Vignes J setting aside the earlier judgment and subsequent proceedings was set aside. The judgment entered on 16 May 2011 and the assessment of damages dated 4 February 2013 were restored.

1. Construction of clause 15. The clause was not confined to formal proceedings. Its prohibition on admissions, offers, promises and payments, its power to take over the defence or settlement of a claim, and the insured’s obligation to provide information and assistance could operate from the accident and throughout any third-party claim. Once a claim was being advanced, TATIL was entitled to take over its conduct in Mrs Crossley’s name, retain an attorney and exercise the contractual discretion given by the clause.
2. Service and jurisdiction. A defendant may waive service and enter an appearance. Under rule 9.7 of the Civil Proceedings Rules 1998, jurisdiction includes the court’s general power or authority to try the claim, including matters concerning service. An appearance without a timely jurisdiction application is treated as acceptance of jurisdiction. The absence of personal service therefore did not prevent TATIL or its attorney from conducting the proceedings.
3. Authority and effect on the claimant. Once Mr Gosine had been retained under TATIL’s actual authority and had entered an appearance, he had apparent authority to take the normal steps open to a defendant, including filing a defence, admitting liability and seeking to reduce damages. Those steps were effective against Mr Ramsook.
4. Duties to the insured. Clause 15 was not carte blanche. TATIL and Mr Gosine should have obtained and considered Mrs Crossley’s account before admitting liability and should have kept her informed of the proceedings and her potentially substantial exposure. The defective certification under rule 10.7(6) and the failure to obtain proper instructions illustrated that breach. Nevertheless, the breach was a matter between Mrs Crossley, TATIL and Mr Gosine. It could not affect Mr Ramsook, who pursued the proceedings without notice of it. This was consistent with Groom v Crocker [1939] 1 KB 194 and Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd [2001] EWCA Civ 1047; [2001] CLC 1103.
5. Unnecessary issues. The Board did not decide the remaining grounds. It observed that, if neither TATIL nor Mr Gosine had actual or apparent authority, the proceedings would have been a nullity from issue and Mrs Crossley could have raised that point before the first-instance judge. In that hypothetical case the balance of prejudice would not arise. Costs submissions were invited within 28 days.

• Privy Council: Appeal allowed. The first-instance judgment setting aside the proceedings was itself set aside, and the earlier judgment and assessment of damages were restored.
• Court of Appeal of the Republic of Trinidad and Tobago: Mr Ramsook’s appeal from des Vignes J was dismissed on 11 May 2015.
• First-instance court: Des Vignes J set aside the judgment entered on 16 May 2011 and all subsequent proceedings on 19 January 2015, finding that Mrs Crossley had not been served and that the attorney had acted without authority.