USING THE DOCTRINE OF SUBROGATION TO LIMIT THE UNJUST ENRICHMENT OF THE INSURED UNDER CAMEROONIAN INSURANCE LAW
Keywords:
Subrogation, Unjust Enrichment, Insurance, Insured and InsurerAbstract
This piece reveals that the right of insurers to seek subrogation (reimbursement) for payment made in the occurrence of an event are the norms for virtually every category of insurance contracts, specifically contracts of indemnity. This right is not usually inserted in an insurance policy. Thus, even if such right is not expressly stipulated in the contract of insurance, the insurer will be entitle to such rights upon the fulfilment of the required conditions, making such right to be purely an implied rights into the contract. However, in Cameroon the CIMA Code governing insurance activities in Cameroon provides for subrogation rights in it article 42, thus whether insurance policies provides for subrogation rights, the principles of the CIMA Code automatically apply. This principle of subrogation does not exist as an independent principle but as means to curb any unjust enrichment or unjustified profit that the insured may seek to make from the loss suffered. In order to curb such unwarranted enrichment the insurer after compensating the insured is entitled to the rights of the insured against any third party responsible for the loss or claim from other insurer in case of contributory insurance subject to the exceptions provided the law.
References
1. The subject matter of insurance contract are usually property, life or liability or anything which the person seeking the policy have an interest in it. This interest is usually pecuniary in nature. However, the insurance policy does not insure the subject matter but, the interest which the insured possess in the subject matter. JBIL (2020) 38–50 © Law Journals 2020. All Rights Reserved Page 48
2. Tumnde S. M. (2013), Insurance Law in Cameroon, Yaoundé, Presses Universitaire d’Afrique, p. 130.
3. McGillivray and Parkington (1975), On Insurance Law relating to all risks other than marine, 6th ed., London, sweet and Maxwell, p. 777.
4. Irukwu J. O. (1974), Insurance and Practice in Nigeria, Ibadan; Caxton press [West Africa] ltd, p.61; under the reign of Emperor Hadrian (A.D. 17 7–A.D. 138), Roman law began to shape the building blocks of subrogation. The relation of surety ship could be created by stipulation. Surety ship was an accessory contract, and the surety was known as the fidei -jussor Sureties had the beneficium divisionis, and enjoyed the beneficium ordinis, invented by Justinian, and the beneficium cedendarum actionum the surety could before payment requires the creditor to transfer to him all his rights and securities against the debtor or subrogation to the right of ac tion of the creditor against the principal debtor, or pro rata against the co- sureties.
5. A clear understanding of the meaning and functioning of the doctrine indicates that it is not dependent upon the insurance contract, nor upon privity between the parties. It is basically the creature of equity, and is founded upon principles of natural justice.
6. Tumnde M. S. (2003), motor vehicle insurance in Cameroon, Design House, Limbe, p. 180.
7. APM Operators Ltd. et al V. Allendale Mutual Insurance Co(1984), 9 C.C.L.I. 136.
8. Dolden E. A. (2002), Practical and Substantive Aspect of subrogation, Vancouver: Dolden Wallace folickllp, p. 78.
9. In England, the courts establish the remedy or restitution of claimant of victim as far as subrogation is concerned to be; …there are s ome circumstances in which the remedy takes the form of ‘subrogation’, but this expression embraces more than a single concept in English law. It is a convenient way of describing a transfer of rights from one person to another, without assignment or assent of the person from whom the rights are transferred and which takes place by operation of law in a whole variety of widely different circumstances. Some rights by subrogation are contractual in their origin, as in the case of contracts of insurance; see t he case of Orakpo v Manson Investments Ltd [1978] AC 95 at 104.
10. Legal subrogation arises by operation of law and applies when one person is subrogated to certain rights of another. Through legal subrogation, one person is substituted in the place of the other and succeeds to the rights of the other person. Statutory subrogation is a right that exists only against a wrongdoer. Conventional subrogation arises on the contractual obligations of the parties. The contract can be express or implied. The focus of conventional subrogation is the agreement of the parties. Thus, legal and statutory subrogation could be termed non contractual subrogation.
11. Robert E. Keeton & Alan I. Widiss, Insurance Law, §3.10 (1988).
12. Ronald C. H. (1964), subrogation in insurance theory and practice 3, p. 24.
13. With damage as a main remedy for breach of contract.
14. See the view of Parke B in the case of Robinson v. Harman (1848) 154 ER 363 224, where he said: “the rule of the common law is that where a party sustains a loss by reason of a breach of contract he is, so far as money can do it, to be placed in the same situation with respect to damages as if the contract had been performed”.
15. Bryan A. Garner (2009), Black's Law Dictionary, USA, 9th edition, Thomas Reuters, p. 1678.
16. Sue A. (1989), Ineffective transactions and unjust enrichment: a framework for analysis”, Legal Studies, Vol. 9, No. 2, pp. 121-145.
17. The Digest of Justinian contains the fundamental principle from which modern unjustified Enrichment law is derived: “it is a matter of natural equity that no one JBIL (2020) 38–50 © Law Journals 2020. All Rights Reserved Page 49 should be enriched to the detriment of another”.
18. (1760) 2 Burr 1005, 1008 – 9, 1012.
19. Cour de c assation, 15 June 1892 reported in (1892) DP 1, 596.
20. Christina B. & Schreuer C. (2013), “Unjust Enrichment”, Max Planck Encyclopedia of Public International Law, pp. 1-12.
21. Stephen A. Smith (2009), “Unjust Enrichment: Nearer to Tort than Contract”, in Robe rt Chambers, Charles Mitchell and James Penner (eds), Philosophical Foundations of the Law of Unjust Enrichment, Oxford: Oxford University Press, at pp. 181–89.
22. In French law, the just cause “cause légitime” was introduced by the courts in judicial develop ment, limiting the rule in Boudier case by introducing he absence of basis requirement; see the case of Leloup v Lutier, Cour de cassation, 18 October 1898 reported in [1898] Cass Req 105.
23. L’obligation de restitution s’explique par l’idée de l’absence de cause.
24. McGeema A. (2001), The Modern Law of Insurance, Butterworth, UK, p. 299.
25. (1883) QBD 380.
26. These conditions under English Law were stated in Creek Residential v. Kemp Morgan 153 Cal. App. 4th 675, 690 (Cal. App. 3d Dist. 2007).
27. See article 42 of the CIMA code.
28. Tumde, M. S. (2003), Motor Vehicle Insurance in Cameroon, Design House, Limbe, p. 178.
29. Article 274 of the CIMA code.
30. See article 600 of the CIMA Code.
31. Article 34 of CIMA Code.
32. Morgan Creek Residential v. Kemp, 153 Cal. App. 4th 675, 695 (Cal. App. 3d Dist. 2007)
33. Bird J., (1997), Modern Insurance Law: 4th ed., London: sweet and Maxwell, p. 384
34. Kimball & Davis (1962), “The Extension of Insurance Subrogation”, Michigan Law Review, pp. 841-842.
35. Fleming, John G. (1966), “The Collateral Source Rule and Loss Allocation in Tort Law”, Cal. L. Rev. pp.1481-144
36. Where Lord Hardwicke said: “The plaintiff insurers had the plainest equity that could be, the person originally sustaining the loss was the owner but after satisfaction made to him, the insurer, the assured stands as trustee for the insurer in the proportion of what he [the insurer] paid.”
37. Lord Mansfield stated: “Every day the insurer is put in the place of the insured. The insurer uses the name of the insured. The case is clear. The [Riot] Act puts the local authority in the place of the trespassers and upon principles of policy I am satisfied that it is to be considered as if the insurers had not paid a farthing.”
38. Tumde M. S. (2003), op. cit., p. 180.
39. This literary means, no one can transfer to another more rights than possesses on its own.
40. J.O. Irukwu J. O. (1972) op. cit., p. 66.
41. Article 42(2) of the CIMA code.
42. Stritmatter P. L. (2011), Article of “Subrogation”: Washington: stritmatter Kessler Whelan coluccio.
43. Article 617 of the CIMA Code.
44. Tumde, M. S. (2003), op. cit., p. 178.
45. Article 274 of the CIMA Code 1992
46. Subrogation although often described as a remedy, is more accurately understood as the mechanism by which a claimant is deemed to have access to the rights of another. It is those rights which the claimant is seeking to obtain as his or her remedy.
47. Christina B. & Schreuer C. (2013), “Unjust Enrichment”, Max Planck Encyclopedia of Public International Law, pp. 1-12.
48. Handy P. (2010), subrogation principles and practice: crowford; beach croft LLP.
49. This position is well established by the English case of HSBC Rail (UK) v Network Rail Infrastructure [2006] 1 WLR 643.
50. See article 42 of the CIMA Code. JBIL (2020) 38–50 © Law Journals 2020. All Rights Reserved Page 50
51. Ivamy (1993),General Principle of Insurance Law, Butterworth s, London Sixth ed. P. 494., cited by Imtithal Babiker A. (2006), Some Aspects of the Doctrine of Subrogation in Insurance law, Masters Dissertation, University of Khartoum.
52. Article 42 of the CIMA Code.
53. J. Greyber: Insurance Policy condition: part 29 sub rogation, Tampa; Merlin law group 2013.
54. Article 42 (2).
55. Orakpo v Manson Investments Ltd [1978] AC 95 at 104. Cite this Article Katu Musa Hazcel . Using the Doctrine of Subrogation to Limit the Unjust Enrichment of the Insured under Cameroonian Insurance Law. Journal of Banking & Insurance Law. 2020; 3(1): 38–50p.
