Lawyers brief CLICO, British American policy holders on case for CCJ

THE BRITISH AMERICAN and CLICO Policy Holders (BACOL) group is moving forward with legal action aimed at recovering the investments made by thousands of OECS citizens prior to the collapse of the insurance companies.

BACOL held a virtual media launch yesterday, which provided a wealth of information in relation to this legal endeavour and how policyholders across the region can become actively involved.

Queen’s Counsel, Simon Davenport, a member of the legal team addressing the matter gave an overview of the case being built to be presented to the Caribbean Court of Justice (CCJ).

Davenport, one of the heads of the 3 Hare Court Chambers in London, said the effects of CL Financial (CLF) and its subsidiaries, BAICO and CLICO were catastrophic and widespread across the Eastern Caribbean.

“When CLF collapsed, it simply didn’t have the funds in liquid assets to recover its liabilities to those investors. In Trinidad and Tobago (T& T) the government stepped in. It took emergency control of CLICO and the Trinidad arm of British American. An important point to remember is that British American had a Trinidad and Tobago arm, British American Trinidad (BAT). It also had a regional arm, BAICO,” he explained.

The barrister said the T& T government forced CLF to “agree to make available all of its assets to make good the deficit in CLICO and BAT…” The government also advanced funds to CLICO and BAT.

The results of those actions meant that CLICO and BAT customers were protected, which ultimately resulted in the recovery of the full value of T& T customers’ investments.

Meanwhile customers of BAICO in other countries were not protected and have to date only recovered approximately 14 per cent of the liquidation.

“The Trinidad and Tobago government declined to intervene to protect them, saying that BAICO was not regulated by the Trinidad and Tobago authorities… The other member states of CARICOM for years, have pressed the Trinidad and Tobago government to do more for the non-Trinidad and Tobago customers of BAICO but the government , having promised to pay at least something in the shortfall in the event, only paid a tiny fraction of the money,” Davenport said.

He also noted that the government has refused all political pressure, has not given way to moral suasion and has not recognised the legal rights of the customers outside of Trinidad and Tobago.

It is for this reason that Davenport said legal action is necessary to restore the rights of these persons who have been adversely affected.

Legal action to be taken by BACOL’s legal team relies on Trinidad and Tobago’s obligation under the Revised Treaty of Chaguaramas, which governs CARICOM.

Under the treaty, CARICOM states agree: to not permit discrimination on the grounds of nationality; to remove actively restrictions on cross border trade and services; to not permit discrimination on the grounds of nationality in the provision of services; and to apply consumer protection provisions without discrimination on the grounds of nationality.

“The treaty permits private individuals to bring claims in the Caribbean Court of Justice, if their rights under the treaty are infringed,” Davenport said, adding that the case to be presented alleges that T& T acted in breach of its treaty obligations and discriminated against BAICO and CLICO policyholders in other countries, on the grounds of nationality.

The lawyer further explained that the three complaints to be expanded upon by the legal team are: that the T& T government rescued the T& T customers of BAICO but not its non-T& T customers; it actively harmed BAICO by requiring that CLF’s assets could only be used to help CLICO and BAT; and it has attempted to justify its actions by being in accord with a regulatory regime that only protected Trinidadian customers of BAICO and not non-T& T customers.

He said the intention of the application is to ask the CCJ to enforce the obligations binding T& T under the Revised Treaty of Chaguaramas.

According to Davenport, the first step is to apply to the CCJ for special leave in order to commence substantive legal proceedings on behalf of policyholders, whose rights under the treaty were infringed.

He said it is at this stage that the legal team will ask the CCJ to agree that there is an arguable case and that aggrieved policyholders should be permitted to bring the claim.