CCJ rules that Barbadian insurance company is required to satisfy judgment obtained against its insured

On Wednesday, July 30, 2025, the Caribbean Court of Justice (CCJ) delivered a landmark ruling in Appeal No BBCV2024/002, involving Consumers’ Guarantee Insurance Co. Ltd (CGI) versus Valentine Stevenson and Vincent Anthony Thomas, the administrator of the estate of the late Sherleen Ordeen Thomas.

According to a CCJ release, the Court dismissed both the appeal and cross-appeals concerning a previous judgment by the Court of Appeal of Barbados.

The CCJ confirmed that an insurer covering an owner or driver of a motor vehicle must fulfill a judgment awarded to a third party against its insured. Additionally, the Court ordered the appellant to bear the costs of the appeal.

As outlined by the press release, the case traces back to a tragic incident on November 29, 2007, when Mr. Valentine Stevenson, the owner and operator of a vehicle, accidentally struck and fatally injured Ms. Sherleen Thomas. At the time of the accident, there was an active insurance policy covering the vehicle. However, Stevenson’s driver’s license was expired at the moment of the collision, though he renewed it promptly on the first working day following the incident, paying the necessary renewal fee.

In 2010, Ms. Thomas’s estate initiated legal proceedings in the High Court seeking compensation. On March 31, 2023, the estate obtained a monetary judgment against Mr. Stevenson. Before this judgment was issued, CGI had filed separate legal actions in the High Court, claiming that it bore no liability to satisfy any judgment against Stevenson due to specific exclusions in the insurance policy. The policy explicitly stated that coverage would not apply if “the driver does not hold or is disqualified from holding or obtaining a valid driver’s license or if the driver is entitled to indemnity under another policy.” Despite these arguments, CGI was unsuccessful at all levels of the judicial process—first in the High Court, then the Court of Appeal, and finally before the CCJ.

The CCJ’s ruling was unanimous in its interpretation of the policy terms. The judges determined that the wording of the insurance policy was sufficiently ambiguous, invoking the contra proferentem rule, which permits courts to interpret ambiguous contract language against the party responsible for drafting it—in this case, CGI. Consequently, the Court found that the policy did not exclude coverage for Mr. Stevenson under the circumstances of the accident.

However, the Court was divided over whether Barbados’s Road Traffic Act (RTA) automatically creates third-party insurance coverage. The CCJ President, Hon. Mr. Justice Anderson, along with Mme Justice Ononaiwu, held that the RTA does not establish automatic third-party insurance, affirming that insurers are permitted—within statutory limits—to exclude certain risks from their policies. Under this view, the insurer’s liability is limited to what is expressly covered by the policy terms.

In contrast, Mme Justice Rajnauth-Lee, Mr. Justice Barrow, and Mr. Justice Jamadar argued that, barring specific statutory procedures for exclusions, there exists a mandatory and enforceable obligation for insurers to cover innocent third parties up to statutory limits, provided certain conditions are met. They identified three key prerequisites for an insurer’s liability: (i) issuance of a valid insurance certificate to the policyholder, (ii) an existing judgment by a third party against the policyholder, and (iii) a judgment concerning liability as mandated under section 38(1) of the RTA. The Court found all three conditions satisfied in this case, ruling that CGI could not rely on any legal basis to deny its responsibility to satisfy the judgment.

All five judges dismissed the cross-appeals, which argued that the retrospective payment of the license renewal fee validated the driver’s license at the time of the accident.

Representing CGI were Mr. Andrew Thornhill, KC, Mr. Kashawn Wood, and Ms. Shaddiah Hinds. Mr. Stevenson was represented by Ms. Verla De Peiza, while the estate of Ms. Thomas was represented by Sir Richard L. Cheltenham, KC, and Ms. Shelly-Ann Seecharan.

The full decision from the CCJ is accessible here.