THE RIGHTS OF THE INSURED
By A LEGAL CORRESPONDENT
THE case of Groom v. Crocker and Others, which was dealt with in a recent article in The Spectator, no more than touches the fringe of a serious and complicated question. Mr. Groom not unreasonably objected to the conduct of a firm of solicitors who admitted, in his name but without his knowledge, that he was responsible for an accident in which his brother had sustained grave injuries. But a solicitor might with justice retort that the situation created by such an accident imposes upon him an impossible division of alle- giance. He appears on behalf of the motorist and in his name : but he is paid by the insurance company, who will expect their interests, and the obligations they have entered into with other insurance companies, to have priority over all other considerations. Moreover the motorist himself is bound by his policy not to act to the detriment of the company's interests.
Where, as often happens, an insurance company provides free legal defence, a similar conflict can often arise. The motorist may be charged with both dangerous driving and driving without due care. In many cases it is clearly in the motorist's best interests to plead guilty to the latter charge, on the understanding that the former will be dropped. But such a course does not suit the insurance company at all. Their only object in offering to defend him is to prevent him from making any admission of negligence that can later be used against him. They want to get their man off scot free, if it can be done : if it can't, it is a matter of no interest to them whether he is found guilty of driving dangerously or merely carelessly. And since they pay the piper, they call the tune.
The problem becomes more serious still, when (as can happen) it is the motorist's honour and not merely his driving record which clashes with the interests of his insurers. To take a glaring example, there was a gentleman accredited to the Peruvian Legation, who had taken out an ordinary policy and got himself involved in an ordinary claim by reason of his servant's negligence. An action followed, in which damages were awarded against him in favour of a third party. His insurance company then repudiated liability—because he had acted to the detriment of their interests by not pleading diplomatic immunity as a defence to the action. This repudiation in fact failed ; though on a technical point, so that the situation may well arise again. A foreign diplomat may well ask why, if he is to be obliged to rely on a defence which is as efficacious as it is dishonourable, he should incur the expense of insuring against third-party risks at all. The insurance company will fall back upon the familiar complaint that anyone would think they were a charitable institution.. But the party who is really to be pitied is the solicitor. He knows very well which side his bread is buttered : but, unless his practice has entirely run away with his conscience, he will be reluctant to take any step which is flagrantly detrimental to the party in whose name and on whose behalf he enters appearance to the writ.
The remedy for this state of affairs is not in the hands of the motorists. They are compelled by statute to insure : and no motorist is likely to succeed in taking out a policy which does not contain the provision giving absolute control of any proceedings to his insurers. Nor can the insurance companies be reasonably expected to listen to ethical appeals. Their standards vary very widely : and in any case their experience of modern motor-car insurance is not so profitable that they can be asked to make concessions as to the form of policies without exacting a more lucrative scale of premiums. The. body which should take steps, and soon, to put an end to the situation is the Law Society, for its members are the worst sufferers : the allegiance of a solicitor should never be divided.
The motorist engrosses but does not exhaust the activities of the law. Some day—perhaps it is a distant hope—the House of Lords may awake to the realisation that the motor- car is a dangerous and unnatural object when outside its garage, just as much as an orang-outang outside its cage. Then the whole fabric of " running-down " will tumble to the ground. Premiums will soar. The bar will be terribly hit. The courts will no longer spend their days discussing the precise moment at which a small boy has stepped off a pave- ment—a point upon which his entire future is going to depend.'
But when the motorist has ceased to occupy the centre of the stage, the question of insurance against liability to third parties will still be argued, and perhaps most keenly in its relation to the law of libel.
Libel is always a civil wrong and usually a criminal offence : insurance against the consequences of publishing a libel is therefore contrary to public policy, and an action cannot be brought to recover what the unsuccessful defendant has lost. Policies are therefore made dependent upon the honour of the insurers. Such policies limit the burden upon the insurers in various ways. Some provide that the policy- holder shall bear (say) the first £500 ; some that the insurer shall not be liable beyond (say) £5,00o ; some are limited at both ends of the scale. This immediately throws the insurer and the policy-holder into a conflict of interests. In litigation of this sort the insurer does not stipulate for " full control" of the proceedings, as in motor-car insurance : but he can and does require that his consent shall be given to the incur- ring of any costs, with the feeble proviso that such consent shall not be unreasonably. withheld. The situation, however, is almost always created in which what is reasonable for one party is unreasonable for the other.
Naturally most publishers will adopt the policy of peace at any price. Costs are so heavy, and juries so uncertain, that they will even lie down under complaints which they think to be unfounded. On the other hand, it is sometimes good policy for a newspaper to defend an action which is unusually bold, or upon which the -interests -of the pubic appear to depend : and in such a case the insurer may be most unwilling to face the risk in order to give favourable publicity to the policy-holder.
The trouble here lies not with the insurance companies or with the law, but with the vagaries of special juries. Perfectly respectable firms, careful editors, and harmless individuals may be confronted at any moment with claims which they regard as impudent or frivolous, or with claims which it is imperative for the sake of honour to repudiate. But nowadays a defendant can never feel entirely confident. Large and even exorbitant sums have been awarded to plaintiffs who appear to have no merit except effrontery : and the Court of Appeal has virtually abdicated its control upon the extent of damages. Not to insure against such risks means ruin : to let the insurers gain control of the defence may mean that the defendant ties his own hands in the defence of his own honour.
To put it shortly, the law of libel is top-heavy. If it is to be contrary to public policy to insure against a tort, it should at the same time be unnecessary for a law-abiding citizen to do so. He who utters a libel is in theory a wrong-doer, and generally a criminal as well. In practice, those who are most hardly hit are those newspapers which take their res- ponsibility to the public more seriously than others. No function of the law is more vital than the protection of the good name of innocent people : but the law at present operates to put a speculative value on the most dubious reputations. A newspaper may publish facts which it is reasonably sure of proving, and which are certainly such as the public of to know. Yet in its next issue, it will be compelled to insert a grovelling withdrawal at the dictation of an underwriter who knows nothing of the merits of the matter. There is but one explanation—that this branch of the law has become a terror to the just as well as to the unjust. There have been many remedies put forward : but a discussion of their merits is beyond the scope of the present article, for it is the law itself that is here at fault, and not the lawyers.
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