Judge rules for the State

A HIGH COURT judge has ruled that the State has not unjustly enriched itself through payment of insurance premium taxes by its failure to establish a Motor Insurance Bureau to compensate victims in accidents caused by uninsured drivers.

In a 31-page written decision delivered at the Hall of Justice in Port of Spain on Wednesday, Justice Ricky Rahim dismissed the entire judicial review claim brought by victims of uninsured drivers, who challenged the failure of the State to implement legislation to compensate them.

In the claim, driver Davindra Maharaj and the Motor Insurance Bureau Association argued that the State had no authority to levy a tax for a Motor Vehicle Accident Fund or to take the money out of the Consolidated Fund (CF), since there was no legislative authority for this. In his ruling, Rahim disagreed. He pointed to the Exchequer and Audit and the Miscellaneous Taxes Acts, which allow for the funds collected to be deposited into the CF as revenue, while admitting that although funds from the CF to compensate victims of uninsured drivers had been allocated, there was no legislation to establish a Motor Insurance Bureau (MIB.)

Despite this, the judge said, the purpose of levying the insurance premium tax was not to compensate victims of uninsured drivers but was part of the “revenue pot” from which appropriations can be made. The money is being kept in a suspense account.

As of June 2017, the sum in the fund was in excess of $1 billion.

Attorney Asaf Hosein represented Maharaj and the MIB while Claude Denbow,SC, and Michael Quamina represented the MoF, BIR and the AG.

For years, all drivers who have been paying insurance premiums have also been paying money to the State to place in a special fund set up to pay damages to people injured in accidents involving cars without insurance. The fund has lain dormant, since the State has not been able to disburse any funds because of the lack of requisite legal instruments to authorise payments.

Rahim said there was no mischief in this on the part of the State.

He also said the extent to which compensation will be paid and the quantum of that compensation could have financial implications for other sectors and the court could not assume the role of policy-maker. He pointed to the evidence of the Permanent Secretary in the MoF, Vishnu Dhanpaul, that the State still intended to establish a Motor Vehicle Accident Fund.

However, he said laying a bill did not guarantee it would be made law and assented to.