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Battle lost

Bajans lose $163 million lawsuit in Canadian court.

by Shawn Cumberbatch

Thousands of Barbadians once insured by Canadian company Manulife have lost a more than $163 million class action suit they brought against the corporate giant.

Barbados TODAY investigations have revealed that in a 105-page decision released by the Ontario Superior Court of Justice Frank Newbould on Wednesday, plaintiffs led by former Supervisor of Insurance Wismar Greaves received the disappointing news.

But that is not the end of the story, as it has also been confirmed that lawyers representing the Bajans will be filing an appeal against the decision within the next 30 days.

The defeat is the culmination of a near 10 year legal battle initiated by main plaintiffs Greaves, Richard Mandeville, Anthony Bowen and the late Sir Marcus Jordan, among an estimated 8,000 Barbadians who claimed their rights were infringed when Manulife sold its insurance business to then Life of Barbados for $9 million and later demutualised.

When Manulife demutualised its participating policyholders at the time were paid the value of Manulife in shares or cash in the amount of CAN$9 billion, but because the Barbados policyholders were no longer Manulife policyholders, they received none of that value, prompting them to file suit.

The group claimed that Manulife owed them a duty of care and a fiduciary duty at the time of the December 1996 sale to LOB “to take steps to ensure that when Manulife demutualised, they would participate in the distribution of the value of Manulife as if they were still participating policyholders of Manulife”.

In his decision this week, however, a copy of which was provided to Barbados TODAY, Newbould ruled that: • The Barbadians were not eligible policyholders entitled to participate in the demutualisation plan. • Manulife owed no duty of care to the Barbados policyholders. • Manulife owed not fiduciary duty to the former policyholders. • No member of the class action suit was entitled to be paid damages.

The judge said if he had found liability he would have ordered Manulfie to pay at least $163.1 million in to a special fund to allow the policyholders to make claims, but based on his judgement this will not now be done.

“The fact remains, however, that Manulife chose to sell the Barbados block of business by way of assumption reinsurance in which the Manulife policyholders did not remain policyholders of Manulife, and this was approved by the regulators in Barbados and Canada,” the jurist stated.

“The plaintiffs did not seek to set aside the regulatory authorisations to the Transfer Agreement in Barbados and Canada. They accept for the purposes of this their argument that the effect of the authorizations was to extinguish their rights as policyholders of Manulife.

“Their case is that Manulife was not obliged not to take the steps that it did to extinguish those rights and that a duty of care in law should be recognised in the circumstances.

“In the face of this regulatory regime authorising the transfer, it cannot be said that the plaintiffs had any right to remain as policyholders of Manulife. If the Barbados policyholders had no such rights, can it be said that Manulife was under a duty to protect their interests as policyholders and that a duty of care should be recognised? I do not think so,” he added.

Newbould said Manulife “could have protected the Barbados policyholders had it wished to do so”, but that it was under no lawful obligation to do so.

Lead lawyer on the team representing the Barbadian policyholders, Harvey T. Strosberg, QC, told Barbados TODAY following Newbould’s decision to dismiss the class action “there will be an appeal”.

“The appeal must be taken within 30 days. The judge made many important findings of fact in favour of the class. The judge ruled against the class that Manulife did not have a duty of care to the Barbados policyholders which is a matter of law. All other issued were decided in favour of the Class. The judge made very favourable findings of fact,” he said.

“I knew that there was going to be an appeal whoever lost. I’m looking forward to round two, in the Court of Appeal.”

The case against Manulife, which was certified in 2002, was heard for 29 days between in March, April and May this year.

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