Policyholders victorious

Justice Joan Charles granted leave to the United Policyholders Group (UPG) to have the courts review Prime Minister Kamla Persad-Bissessar and her Cabinet’s bail out plan for CLICO policyholders.

According to the group, the Government has reneged on the policy decision of the previous PNM administration to honour payments to EFPA policyholders. In their application the group claims that promises made by the previous administration in 2009, amounted to a guarantee that policyholders would be paid sums that were held in the cash-strapped conglomerate.

The group also claims that the Government’s latest plan, announced last December, is materially different from their initial offer in January 2009, during the Central Bank bail-out of CLICO.

They contend that to receive the principal balances on their policies over a period of 20 years is unlawful, arguing that they are entitled to get full payment on their policies. Justice Charles in a 59-page ruling concluded she was satisfied that the application brought by the group raised arguable grounds for judicial review with a reasonable prospect of success.

The judge has ordered both parties to hold discussions to come to an agreement on the information to be supplied failing which they are to report to her so that she can make a decision on what disclosures should be made.

Government’s payout plan expires in June and the State is likely to appeal the court’s decision. At the leave hearing, the value of the group’s claim was revealed to be in excess of $350 million which represents investments of the group’s members in Clico’s EFPAs.

State attorneys argued that to repay all Clico policy holders in full, the Government would have to raise taxes and reduce public expenditure as there was just not enough money to pay everyone. A similar defence of the payout plan has been raised in a separate lawsuit also filed by EFPA policyholders who are against the package being offered to them.

In an affidavit before the courts in the Percy Farrell matter, Finance Minister Winston Dookeran said, “each policyholder will receive at least an amount equivalent to the amount he would have been entitled to receive on a liquidation of CLICO and if he accepts government’s offer is likely to receive more than that.”

He said Government simply could not afford to do this without a very significant impact on other areas of government’s expenditure. In the UPG judicial review, the Attorney General has been substituted as the defendant in the matter and orders were given for affidavits and written submissions to be filed before trial on November 21 and 22.

Representing the UPG were Peter Knox QC, Ramesh Lawrence Maharaj SC, Nyala Badal instructed by Vijaya Maharaj. Allan Newman QC, Deborah Peake SC and Kelvin Ramkissoon instructed by Deowattee Dilraj, appeared for the State.