Section 9
of Motor Vehicles Insurance (Third Party Risks) Act
Section 9
(1)
If after a certificate of insurance has been issued under section 4(4) to the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under section 4(1)(b) (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall subject to the provisions of this section pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any written law relating to interest on judgments.
(2)
No sum shall be payable by an insurer under the foregoing provisions —
(a)
in respect of any judgment, unless before or within 7 days after the commencement of the proceedings in which the judgment was given the insurer had notice of the bringing of the proceedings;
(b)
in respect of any judgment so long as execution thereon is stayed pending an appeal; or
Motor Vehicles Insurance
(Third Party Risks)
B.L.R.O. 3/2014 11
(c)
in connection with any liability if, before the happening of the event which was the cause of the death or bodily injury giving rise to the liability, the policy was cancelled by mutual consent or by virtue of any provision contained therein and either —
(i)
before the happening of the event, the certificate was surrendered to the insurer or the person to whom the certificate was issued made a statutory declaration stating that the certificate had been lost or destroyed;
(ii)
after the happening of the event but before the expiration of a period of 14 days from the taking effect of the cancellation of the policy, the certificate was surrendered to the insurer, or the person to whom the certificate was issued made such a statutory declaration as mentioned in sub-paragraph (i); or
(iii)
either before or after the happening of the event but within the said period of 14 days, the insurer has commenced proceedings under this Act in respect of the failure to surrender the certificate.
(3)
No sum shall be payable by an insurer under the foregoing provisions if in an action, commenced before or within 3 months after the commencement of the proceedings in which the judgment was given, he has obtained a declaration that, apart from any provision contained in the policy, he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular or, if he has avoided the policy on that ground, that he was entitled to do so apart from any provisions contained in it:
Provided that an insurer who has obtained such a declaration as aforesaid in an action shall not thereby become entitled to the benefit of this subsection as respects any judgment obtained in proceedings commenced before the commencement of that action unless, before or within 7 days after the commencement of that action, he has given notice thereof to the person who is the plaintiff in that proceedings specifying the non-disclosure or false representation on which he proposes to rely, and any person to whom notice of such an action is so given shall be entitled if he thinks fit to be made a party thereto.
Motor Vehicles Insurance
(Third Party Risks)
(4)
If the amount which an insurer becomes liable under this section to pay in respect of a liability of a person insured by a policy exceeds the amount for which he would apart from the provisions of this section be liable under the policy in respect of that liability, he shall be entitled to recover the excess from that person.
(5)
In this section —
“material” means of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions;
“liability covered by the terms of the policy” means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.
(6)
In this Act, references to a certificate of insurance in any provision, relating to the surrender or the loss or destruction of a certificate of insurance, shall in relation to policies under which more than one certificate is issued be construed as references to all the certificates and shall, where any copy has been issued of any certificate, be construed as including a reference to that copy.
Rights of third parties against insurers.