Directline Assurance Company Ltd v Wilson Wanyoike Njoroge [2021] KEHC 688 (KLR)

Facts

The respondent filed an action against the appellant for damages resulting from a road traffic accident involving a third party. The respondent had a valid insurance policy with the appellant, and the respondent agreed to shoulder 40% of the liability. The appellant paid the plaintiff a sum of Ksh.3,000,000, leaving a balance of Ksh.1,025,600. The respondent filed a declaratory suit against the appellant to compel it to settle the outstanding balance.

Issues

1. Whether Section 5(b)(iv) of the Insurance (Motor Vehicle Third Party Risks) Act is applicable to the instant claim against the respondent.
2. Whether the trial court erred in holding that the appellant is liable to settle the decretal sum of Ksh.4,025,600 and in compelling the appellant to refund Ksh.1,025,600.

Reasoning

The amendment to the Insurance (Motor Vehicle Third Party Risks) Act, which caps a claim by a single third party at Ksh.3,000,000, does not apply retrospectively to the respondent's claim against the appellant. The insurer was under a mandatory statutory liability to first settle the judgment sum to the person entitled to the benefit of the judgment.

Outcome

Appeal dismissed

Authorities cited