The Privy Council’s award of $1.3 million to Caymanian Alastair Paterson has been called a ground-breaking departure from law.
The victory spells the end of a legal saga that began seven years ago in the aftermath of Hurricane Ivan.
“The Privy Council decision … completely vindicates Mr. Paterson, who saw his reputation gravely damaged by the legal action brought against him originally by Cayman General Insurance Ltd. – now Sagicor General Insurance (Cayman) Ltd,” said Graham Hampson of Hampson and Company. “Also, in a ground-breaking departure from law that has stood for over 300 years, the Privy Council decided that Mr. Paterson could be awarded damages for loss caused by malicious prosecution.”
There were no provisions in the law to grant such awards in civil matters previously on the basis that there had to be finality to such matters. However, in the judgment, the Privy Council said justice should supersede finality in cases where malicious prosecution could be proven.
In 2006, Sagicor sued Mr. Paterson and Hurlstone Construction, which were both employed to assist in the rebuilding of Windsor Village in the aftermath of the devastation caused by Hurricane Ivan in September 2004. Sagicor alleged that Mr. Paterson and the owners of Hurlstone Construction had attempted to defraud the insurance company.
The court found that the wrongful allegations caused “massive damage to Mr. Paterson’s reputation and to the willingness of third parties to employ him”.
In 2008, just days before the trial, Sagicor abandoned its claim. At the time, Grand Court Justice Alexander Henderson said, “From the failure of these plaintiffs to prosecute their case, I infer that they have never been in possession of a body of evidence capable of establishing conspiracy.”
The Grand Court and the Court of Appeal dismissed Mr. Paterson’s subsequent claims, as they were bound by the law and held that it traditionally did not award damages to people who had suffered as a result of malicious proceedings for fear of a flood of actions by successful litigants.
Sagicor is now faced with paying the $1.3 million to Mr. Paterson.
During a second trial of inquiry into damages, Cayman National Corporation President and CEO Stuart Dack testified that the indemnity given to Sagicor General Insurance Company (Cayman) Ltd. as the result of its purchase of shares in Cayman General Insurance Company was capped at $8 million.
This past week, Mr. Dack said: “The case was between Sagicor and Paterson. It has no direct relevance to us. We had sold the business before the case started.”
Sagicor has since been sold again and is now operating as Cayman First.
Michael Gayle, general manager of the new company, said, “As you know, Cayman First is a new company and this is a legacy issue from Hurricane Ivan. We are, however, happy that it is now behind us and is now cleared up.”
The Cayman Islands government owns 24 per cent of Sagicor, as a result of its negotiated Hurricane Ivan claim settlement. However, the government is only a shareholder and as such is not liable.