Protecting the Victim or the Insurer: A Review of Britam General Insurance Company (Kenya) Ltd v Absalom [2026] eKLR

The road network in Kenya is guided by a core legal principle that no victim of a motor vehicle accident should be left without a remedy.^[1] This principle is underpinned by the insurance motor vehicles third party risks Act (Cap 405), which has made it a requirement for every motor vehicle owner to acquire insurance cover for third party liabilities.^[2] This is a simple principle: insurance is not a personal relationship between a driver and a company, but a safety net for protecting innocent pedestrians and passengers. However, a recent High Court ruling in Britam General Insurance Company (Kenya) Ltd v Absalom [2026] eKLR has caused substantial ripples in this system.^[3] 

The case emanated from a road accident that occurred on the 9th of July 2023. Otieno Onoka Absalom is the car owner, and he has an all-risk private motor insurance policy under policy number 594/700/1/009498/2020/11. The policy was issued by Britam General Insurance Company (Kenya) Ltd. covering the period from November 2022 to November 2023. This policy prohibits the use of the vehicle for any commercial purpose, such as carrying passengers for hire or reward. On the day when the accident happened, Absalom rented out his car to transport church members from Narok to Njambini in Nyandarua County. On their way back from Njambini, the car got into an accident that led to seven passengers getting hurt. The driver who was hired to drive during that time was not a permanent employee of Absalom. Seven different lawsuits were filed by the passengers who got hurt.

In response to this, Britam instituted a declaratory action before the High Court at Narok, where the insurance company sought a declaration that it had the right to avoid the contract of insurance and that it was not bound to indemnify or compensate Absalom, nor was it bound to pay any claims made by the third parties in connection with the accident. Absalom did not defend himself in this case. The case was heard based on proof, and Britam called one witness, PW1, Mr. Peter Makau, a Legal Officer of Britam. This witness's evidence was not controverted.     

What we need to acknowledge about the case of Britam vs. Absalom is that there was a church group that was involved in an accident, which suffered actual harm and walked away empty-handed, all because of a dispute on paper between a motorist and his insurer. This cannot even be considered justice, but simply a legal technicality. The point of passing the Insurance Motor Vehicles (Third Party Risks) Act has never been to safeguard insurance companies against claims, but instead to protect ordinary Kenyan citizens who know nothing about the term “private use only” in an insurance document they have never even read.

By allowing an insurance company to escape liability on the grounds of a driver’s breach of policy terms, this decision has ignited a very important debate. This article will seek to critique this decision, opining that although it may be legally valid in terms of contract law, it has significant ramifications for the rights of third-party victims.     

The Legal Conflict Between the Doctrine of Privity and Public Safety

This case’s judgment controversy arises when you examine the Doctrine of Privity, which is the main legal obstacle that denies accident victims access to compensation. Through the definition of an insurance contract as a personal agreement between the insurance company and the insured, in this case, a car owner, the doctrine of privity ensures that any other person apart from those in the contract cannot sue the company.^[4] In other words, it is generally not within the legal rights of a third party, such as a pedestrian or passenger in an accident, to sue an insurance company, as they were not part of the insurance contract.^[5] It is significant because it has a contradictory nature, whereby, on one hand, it supports the legality of the agreement, but on the other hand, it creates a legal vacuum where insurers can escape liability through legal technicalities that the victims were unaware of and could not prevent.

Since this is a matter concerning the general public, the legislation has created a statutory bridge that allows this rule to be circumvented. This is provided in the Act concerning motor vehicles, third-party risks.^[6] This is a law that was made for public safety, where insurance companies are forced to pay, even though they are in a dispute with the driver.^[7] However, as seen in the Britam case, when a court allows an insurance company to avoid a policy on account of the driver's dishonesty, this bridge is broken, leaving the victim high and dry.

The Burden of the Innocent Victim

The worst part of the decision made in the Britam v Absalom case is the legal vacuum it creates for the innocent victim.^[8] In insurance law, the third party is a stranger to the negotiations between the insurer and the vehicle owner. They have no way of verifying whether the driver is being honest about his use of the vehicle. By allowing Britam to back out of the insurance policy on account of the misrepresentation by Absalom, the court is essentially punishing the victim for something they did not commit.^[9] This is in clear contravention of the remedial intent behind the act, which was meant to ensure that the road-utilizing public is protected from the insolvency of negligent and dishonest drivers.^[10] When a court places greater importance on the sanctity of a private contract over this public safety mandate,^[11] it, essentially, leaves the injured party with just a paper judgment, where they have a legal right to compensation, but it is unenforceable because the driver is broke and the insurer has been allowed to back out.^[12]

Systematic and Proof-related Issues

One of the areas where the insurer has faced criticism is the timing of the investigation and the subsequent filing of the declaratory action.^[13] Clearly from the judgment, the insurer issued a policy covering the period from November 2022 to November 2023, and received premiums for a private motor policy. However, it was only after the accident that investigations revealed the vehicle was being used for unauthorized commercial purposes. This creates a gap where the insurer profits before the accident and then can easily avoid liability if something goes wrong.^[14] The judgment highlights that the uncontroverted evidence of a single witness, PW1, Mr. Peter Makau, a Legal Officer of Britam, was enough to establish the breach and absolve the insurer of all liability.^[15] 

The judgment is open to criticism in the sense that it did not uphold the middle ground of enforcing the balance of the utmost good faith doctrine.^[16] While Justice Kariuki was correct that the unauthorized conversion of the vehicle for commercial use had materially altered the risk exposure, the outcome is a winner-takes-all situation that ignores the competing public interest in protecting third parties.^[17] A more balanced application of the good faith doctrine could have required Britam to satisfy its statutory obligation to the victims first, while preserving its rights to recover from Absalom, the defendant, separately. This was illustrated in the Corporate Insurance 
Fidelity Shield Insurance Company Limited v Musembi case, where Justice Wananda thought that the statutory duty owed by the insurer to third parties as provided for under section 10(1) of the Insurance Act could not be delegated through a contractual provision. In addition, transferring the statutory duty to the insured party would defeat the purpose of the Act.^[18]

Recommendations 

Most policyholders, and certainly the church members who boarded Absalom's vehicle, do not read the fine print on their insurance policy until an accident happens. It is suggested that the Insurance Regulatory Authority require insurers to display use limitations, such as private use only, in large, bold letters directly on the insurance sticker mounted to the windscreen of every insured vehicle. This would enable any prospective passenger to ascertain the scope of cover before boarding.

The more fundamental reform is to adopt the ‘pay then recover” principle. Under this approach, the insurer would be legally required, pursuant to the statutory duty in the Insurance Motor Vehicles (Third Party Risks) Act, to first pay the damages awarded to the accident victims. Afterward, the insurer will be able to claim such an expense back from the fraudulent insured person, in this case, Absalom, the owner of the car who lied about its use. This way, the blameless victim will not pay for something he did not commit fraud on, while the guilty party will be penalized. The Britam v Absalom case is one example where the insurer receives money from premiums paid but avoids paying the risk without giving anything to the innocent victims.

Conclusion

The Britam V Absalom decision illustrates, in stark terms, the gap between the letter of insurance contract law and the spirit of the legislation enacted to protect ordinary Kenyan road users. Seven church members travelling from Narok, injured, filed seven separate suits for compensation, and are likely to walk away with nothing, not because anyone disputes that they were hurt, but because the man who hired out his vehicle misrepresented its use on a policy form. The Insurance Motor Vehicles (Third Party Risks) Act was never to shield insurers from such claims; it was enacted to protect citizens who know nothing of the term private use, only in a document they have never seen.

The solution, however, is simple. The “pay then recover” rule is quite common in other jurisdictions and represents a principled middle ground.^[19] Require the insurer to pay first, and then have the insurer chase down the deceitful owner later to reimburse themselves. This was established in a landmark judgment in the Supreme Court of India, in the third-party motor insurance law, where the court ruled that assuming a basic violation of the insurance policy (for example, driving without a license) is proved, the insurance firm would still have to provide the compensation first to the third party. The firm could later recoup its losses from the vehicle owner or insurer.^[20]  This way, the aggrieved parties will be compensated, the insurer's case will remain relevant, and, most importantly, this will be in line with the intention of the law all along. Everyone will win except the individual who is actually responsible for misrepresentation, and this is precisely what it should be.

In Kenya, there is no doubt that our roads are among the most hazardous in the sub-region. Every day, passengers board vehicles without any idea whether the driver's insurance is valid, complete, or exempt from anything. Meaningful reform must keep insurers financially accountable and equally ensure that vehicle owners and drivers cannot profit from misrepresentation at the expense of the innocent people who travel with them. The Britam v Absalom case serves as a good wake-up call.

Ndindi Tabitha Mwende is a final year law student at Kabarak University School of Law, a certified mediator, and the Vice Chairperson of CLACLE. She has a keen interest in insurance law, Human Rights Law, Alternative Justice System enthusiast, and access to justice for vulnerable members of society.

Endnotes