As the Barbados Government mulls over its payout options for CLICO, it may well be left with no other choice but to factor in the full sum of money due to Executive Flexible Premium Annuity (EFPA) holders.
That’s if latest court news out of the Republic of Trinidad and Tobago is anything to go by.
It appears the government there could be legally bound to honour such payments if the court upholds the challenge brought by the United Policyholders Group against the Kamla Persad-Bissessar administration.
So far, the Port of Spain High Court has only agreed to grant leave to the policyholders group for it to apply for judicial review of the government’s decision not to pay the EFPA investors in full.
But in doing so, Justice Joan Charles said she was satisfied that the group had raised several grounds with a reasonable prospect of success.
The judge pointed to guarantees given by the state in 2009 to CLICO investors that their money would be safe. She also noted a promise made by the Trinidad government to make up the deficit if there was any shortfall in the company’s statutory fund.
In seeking justice for the EFPA investors, Queen’s Counsel Peter Knox submitted that when the Persad-Bissessar government took up office in 2010, Finance Minister Winston Dookeran had announced a plan to repay policyholders their money without interest over a period of 20 years.
This plan, he said, was inconsistent with the guarantee given by the previous government back in 2009.
It was further argued that where a government or a public authority wants to change a policy which has created a legitimate expectation of a substantive benefit, which is a protection in public law, it has to present evidence to show an overriding public interest.
Knox said a court would then have to determine whether the argument of an overriding public interest is a genuine one or whether the change of policy was so unfair that it amounted to an abuse of public power.
Based on these arguments, the Barbados Government may also have a case to answer before the court, given similar guarantees made by late Prime Minister David Thompson and his successor Freundel Stuart on the CLICO matter.
It may be forced to accept liability for the EFPAs, despite what we understand to be feverish legal manoeuvres – some of which are still in train – with a view to finding a way out of paying these high-risk investments.
