Judge asks if lawyers should be sued

Windsor Village trial

The trial to award damages in a countersuit against Sagicor General Insurance (Cayman) Ltd. in relation to a Hurricane Ivan claim resumed Tuesday.

During proceedings, it was established by attorneys for Sagicor that the company wished to amend its position with regard to a report by Alan Purbick of Capital Consulting. That report was the basis for initial allegations of fraud brought by Cayman General Insurance Company against a number of defendants, including Alastair Paterson, Bould Paterson Ltd., Crawford Adjusters (Cayman) Ltd, Hurlstone General Contractors Ltd., Hurlstone Ltd., John Hurlstone and Robert Hurlstone.

Sagicor assumed the plaintiff’s position in the action after it bought 75 per cent of Cayman National Corporation’s shares in Cayman General Insurance, subsequent to the occurrence of events alleged in the original lawsuit.

Attorneys for the insurer argued that Sagicor had no reason to believe Mr. Purbick’s report was flawed and therefore were not to blame for the original writ against the former defendants – now claimants in the case – as they were simply following legal advice.

They went on to say they were amending their position to reflect this and it was in fact wrong for attorneys to plead their case in the way they had during earlier proceedings, which were not pursued.

With regard to this development so late in the proceedings, Justice Alexander Henderson asked the attorneys for Sagicor whether it was the attorneys that should be sued.

He added that the crucial element of the case in question was the state of mind of Sagicor General, as they are the ones who filed the original writ and legal advice was not an excusable defence when alleging charges of this nature. Lawyers for the now plaintiffs in the case argued that Mr. Purbick’a report was the basis for the Sagicor’s case not being pursued and that the report has been deemed erroneous and unable to be sustained by the same attorneys who are now saying otherwise.

They said the defence for Sagicor General was, in effect, trying to re-litigate a case that had been abandoned on the eve of trial in December 2008.

Justice Henderson told the Sagicor attorneys that the original trial was the opportunity to prove fraud, not during these proceedings.

However, he allowed the defence to amend parts of their position but reminded them that he had a responsibility to oversee the proper utilisation of the court’s resources.

The change in the defence’s position could mean that witnesses that have already testified and been cross-examined could have to be called again in what lawyers for the plaintiffs say is an attempt to draw out the proceedings, originally scheduled for 10 days. To date $943,000 in damages have already been awarded to the plaintiffs and attorneys say costs are expected to amount to several million dollars.

In last December’s trial, Justice Henderson made an order of discovery to determine whether Cayman National Corporation had given an indemnity to Sagicor General Insurance with regard to the lawsuit.

The Cayman Islands Government also owns a little more than 24 per cent of Sagicor General. This is as a result of a negotiated settlement it made with Cayman General Insurance with regard to its Hurricane Ivan claim on damages to government properties.

It is not clear through proceedings to this point, however, who will be liable for damages, as the evidentiary document relating to possible exemption of liability for Sagicor was apparently redacted.

Whether the Cayman National Corporation, through its past ownership in Cayman General Insurance is liable to any extent or whether Sagicor has essentially purchased this liability remains to be established. According to attorney for the Hurlstones in the case, Tom Lowe, a totally separate proceeding could ensue as a result.