Court Of Appeal Upholds Insurers’ Freedom To Select Their Risks

In the case of Joseph Psaila vs Argus Insurance Company (Europe) Ltd¹ decided on the 26^th of March 2026, the Court of Appeal confirmed that insurers may, at their own discretion, decide which risks and clients they wish to accept.

Joseph Psaila, a taxi driver licensed to operate Y-plate vehicles, owned two cars: a Toyota and a Peugeot . At the time proceedings were initiated before the First Hall of the Civil Court, the Toyota was still insured, while the Peugeot’s policy had already expired. Both vehicles had previously been insured with Argus Insurance Company (Europe) Ltd (‘Argus’).

Psaila alleged that Argus refused to renew the expired Peugeot policy and intended not to renew the Toyota policy due to claims he had filed. He further claimed that Argus effectively “blacklisted” him within the Maltese insurance market, making it impossible for him to obtain insurance elsewhere. Since insurance is mandatory for operating a taxi, he argued that he was unable to work, suffered loss of income, and sought compensation for the damages incurred.

Argus denied any wrongdoing. It maintained that insurers are under no legal obligation to renew policies, as renewal is discretionary, particularly where risk levels are considered high. The company also denied blacklisting Psaila or sharing information about him with other insurers. It explained that the refusal to renew was based on repeated disputes with Psaila, including allegations of aggressive and abusive behaviour, as well as threats directed at employees, lawyers, and an arbitrator.

Evidence from other insurers was also presented, including representatives from Mapfre Middlesea p.l.c., Atlas Insurance Ltd , Elmo Insurance Ltd, and GasanMamo Insurance Ltd, who testified that they refused to insure Psaila because Y plate vehicles are considered high risk and are only accepted under strict conditions such as being part of a fleet, having an existing relationship or a favourable claims history. They firmly denied that their refusal was due to any blacklist. Evidence was also brought by a representative of the Insurance Association Malta.

The Civil Court at First Instance found that although Argus was not obliged to renew the policies, it had acted imprudently by allowing internal negative information to reach third parties, contributing to Psaila’s inability to secure insurance. It awarded him €50,000 in damages.

However, on 26^th March 2026 the Court of Appeal overturned the first instance judgment. It found that Argus had every right not to renew the policies, particularly since the decision was based on Psaila’s own behaviour rather than his claims history. The Court also found no evidence that Argus had blacklisted him or shared defamatory information in a way that caused him harm. It concluded that other insurers refused Psaila due to the high risk nature of Y plate insurance and not because of any conduct by Argus.

The Court of Appeal in this judgment also reaffirmed the underlying principle that sharing information with the broker of the insured does not constitute disclosure to third parties.

The Court therefore held that there was no causal link between Argus’ actions and the damages alleged by Psaila. It reaffirmed the fundamental principle of insurance law that an insurance company has no legal obligation to renew a policy and is entirely free to decide which risks it wishes to underwrite.

As a result, the Court of Appeal set aside the damages awarded by the first court, dismissed all of Psaila’s claims and ordered him to bear the costs of both instances. Ultimately the Court confirmed that Argus acted within its legal rights, committed no wrongful act and was not responsible for Psaila’s inability to obtain insurance elsewhere.

Argus were represented by Dr Christine Calleja and Dr Jake Buttigieg.

Footnote

1. Joseph Psaila vs Argus Insurance Company (Europe) Limited (OC1216), 1393/2023/1TA, Court of Appeal, 26^th March 2026.

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