The High Court recently ruled in favour of a law firm against the claims of a third-party insurance company.
The case arose out of the original plaintiff, Takaful Brunei Am Sdn Bhd’s, initiating legal proceedings against the defendant Eversheds HEP, for alleged professional negligence.
The defendant represented the plaintiff in a traffic accident and personal injury case. The case ended with a judgement in favour of the plaintiff, awarding BND1,691,706.16.
However, the judgement was later reduced on appeal to BND1,415,430.58.
In response to the reduction, Standard Insurance Limited, as the plaintiff in this new High Court civil suit, claimed that the defendant’s solicitor firm had breached its professional duty of care during the initial proceedings.
This led to the commencement of a new claim in 2018 to recover the reduced amount from the defendant’s solicitor firm. The court examined the case, revealing that in December 2016, the defendant’s solicitor firm took out a professional indemnity insurance policy with a third-party insurer, Standard Insurance Limited. The defendant sought indemnity under this policy for any liabilities arising from the previous case.
The third-party insurer, in response, represented by counsels Andrew Jonathan Wong and On Hung Zheng of messrs CCW Partnership, claimed that the insurance policy would be void if the proposal form contained untrue statements or failed to disclose material facts.
The court found that the case was further complicated by the discharge of the defendant from several other cases they were handling for the plaintiff and the delay in paying the defendant’s fees. However, the defendant contended that these actions were a result of mutual agreements and common practices.
The court ultimately found that there was insufficient evidence to indicate that the defendant was aware of the risk of being sued for negligence at the time of the insurance proposal.
On October 18, the court ruled in favour of the defendant, represented by Lawyer Veronica K Rajakanu of her partnership firm, affirming the validity of the insurance policy and ordering the third-party insurer to pay a sum of BND615,707.12 to the defendant. The court also clarified that the defendant was not entitled to indemnification for the costs of the original legal action and that costs would be awarded on a standard basis. – Fadley Faisal
