In a country beset by criminal activity, one has to be so alert when verifying documentation. We read regularly about people being convicted for fraud with driving licences, but do employers pay enough attention to the validity of documents when going through the screening process?
The importance of this was highlighted in a case study published in the latest Ombud Annual report. Although this did not involve fraud, an invalid driver’s licence led to the repudiation of a claim.
An insured suffered a loss on 14 February 2019 when one of its employees was involved in a motor vehicle collision whilst driving the company’s vehicle.
The insured claimed for the damage to the motor vehicle from its insurer. The claim was rejected by the insurer on the basis that the driver did not have a valid driver’s licence.
The insurer relied on an exclusion in the policy which stated that it would not be liable for a loss incurred while a vehicle was being driven by:
(ii) any other person with the general consent of the Insured, who is not licensed to drive such vehicle, but this shall not apply if the Insured was unaware that the driver was unlicensed and the Insured can prove to the satisfaction of the Company that, in the normal course of his business, procedures are in operation to ensure that only licensed drivers are permitted to drive insured vehicles.”
The insured approached OSTI for assistance stating that it objected to the rejection of the claim but had not received a response from the insurer. In its complaint the insured stated that it proved beyond reasonable doubt that it did not know that the employee’s licence was invalid.
There was a further proviso in the contract which read:
The insured must prove that “in the normal course of his business, procedures are in operation to ensure that only licensed drivers are permitted to drive the insured vehicles”.
- before employing a driver, the driver’s licence was physically checked
- the driver’s driving ability was tested
- vehicles are monitored for speeding, harsh driving and harsh braking
- this employee’s driving behaviour was impeccable and there was no reason to believe that he was unlicensed
- the driver passed through numerous routine roadblocks conducted by road traffic authorities and the validity of his licence had never been questioned
- when the accident was reported to the police by the driver, the validity of his licence was not questioned.
The driver stated that he obtained his licence through normal procedures. A representative of the insured attended The High Commission of Malawi in Johannesburg where it was confirmed verbally that the driver had a valid licence until 2016 and he had renewed his licence which was valid until 2022.
The insured submitted that it had exercised proper and reasonable control over the driver to ensure compliance with the National Road Traffic Act, 93 of 1996.
The insurer produced a document from a business known as “Check Your Driver” which incorporated a document that appears to emanate from the office of the Malawi Consulate General. The document stated, “it is concluded that the information presented to this office by your officer is not genuine … and should not be regarded as an International driving licence (SADC Licences)”. A note explained that “SADC” stands for “Southern African Development Community”.
The OSTI found that the fact that a licence looks valid establishes little more than that it is not obviously or patently false. Likewise, the fact that the employee performed well in the “drive test” conveys no more than his ability to drive. Furthermore, licence inspections at “routine roadblocks” can hardly be said to form part of the insured’s “normal course of business”, as envisaged in and for the purpose of the exception.
To the OSTI it was clear that the employee’s driver’s licence was invalid and the submissions made by the insured were of no assistance.
It noted that, when deciding the issue about whether the insured “can prove to the satisfaction of the company”, the insurer’s decision must be objective and reasonable.
After a review of all the information, the office found that the insurer had made an objectively reasonable decision when it concluded that the insured did not prove “that, in the ordinary course of (its) business, procedures (were) in place to ensure that only licensed drivers are permitted to drive insured vehicles”.
The office concluded that the insurer was entitled to invoke the exception to repudiate liability for the insured’s claim.