Legal Watch – Vol 3: Certificate of Great Public Importance – A Gateway to Third Appeals

Overview

Professional indemnity insurance policies are intended to cover losses caused by professionals to their clients owing to the former’s negligence. However, the sanctity of such cover hangs in the balance following the High Court decision in Civil Appeal No. 0064/2024 Sanlam General Insurance Limited vs Finance Trust Bank, per Lady Justice Patricia Kahigi Asiimwe, who held that the bank had no locus standi to enforce the Professional Indemnity policy of its valuation surveyors, who issued false valuation reports, occasioning loss to it.

Being a second appeal, Finance Trust Bank (FTB) enjoyed no right of appeal. FTB represented by Fred Muwema and Friday Roberts Kagoro, successfully applied for and obtained a certificate of public importance to institute a third appeal to the Court of Appeal, issued by the same Lady Justice on 29th May, 2026.

The stage is now set for the Court of Appeal to entertain a rare third appeal in Uganda, juxtaposing the doctrine of privity of contract with professional indemnity Insurance policies upon the following question of great public importance, thus;

“Whether a third party, who is not a party to a Professional Indemnity Insurance Policy, can legally lodge a claim directly against the insurer for losses resulting from the professional’s negligence, pursuant to Section 12(1)(j) and (k) of the Insurance Act, 2017, and Guideline 6 of the Complaints Bureau Guidelines.”

Background

FTB engaged M/s Katuramu & Company Consulting Surveyors to provide property valuation and boundary opening services to support extension of credit facilities. The said surveyors took out a Professional Indemnity Insurance Policy (PI) with Sanlam General Insurance, to cover the bank’s claims that may arise out of their negligent acts.

As it turned out, the surveyors issued false reports against which the bank had granted facilities, which remained unrecoverable.

Insurance Regulatory Authority’s Complaints Bureau

FTB represented by Senior Partner Friday Roberts Kagoro filed a complaint with the Insurance Regulatory Authority’s Complaints Bureau, which found in favour of the bank. It directed Sanlam to pay UGX 1,905,148,996, on the basis that the bank had successfully proven professional negligence of the insured valuer.

Appeal to the Insurance Appeals Tribunal

Sanlam appealed to the Insurance Appeals Tribunal (IAT) through Yiga Advocates, arguing that the bank lacked  locus standi to claim under the PI issued to the valuers, noting that there was no privity of contract between the bank and the Insurer.

FTB opposed the appeal, asserting that it had the right to lodge a complaint and seek redress under S.12(1)(j) and (k) of the Insurance Act 2017 and Guideline 6 of the Complaints Bureau Guidelines, which permitted any affected person, including a third party or beneficiary, to lodge a complaint.

The Tribunal upheld the decision of the IRA that the bank had the requisite locus standi to make a claim under the said PI, reasoning that PIs are by their very nature, designed to protect third parties who rely on professional’s specialized skills and suffer loss due to negligence. Accordingly, it declined to apply the strict doctrine of privity in a manner that would defeat the core rationale of such an insurance cover.

Appeal to the High Court

Sanlam filed a second appeal to the High Court, maintaining that the bank was a stranger to the PI insurance contract and that under the doctrine of privity, lacked the legal standing to sue and enforce a policy, to which it was not a party. The High Court agreed with Sanlam and ruled that the bank lacked locus standi due to privity of contract and that neither the Insurance Act nor the Complaints Bureau Guidelines created a direct right of action for third parties.

Certificate of Great Public Importance

Dissatisfied with the High Court’s decision, the bank filed Miscellaneous Application No. 2624 of 2025, seeking a Certificate of Importance to enable it appeal to the Court of Appeal.

At the hearing, Fred Muwema argued that the decision of the Court had created uncertainty in the law as the very essence of professional indemnity insurance, which was designed to benefit third parties who suffer loss occasioned by negligence of insured professionals, was debased.

He further argued that the decision raised a matter of great public importance, which needed to be certified to go on a third appeal because it threatened the operations of many sectors in the economy, which rely on PI insurance to serve the public.

Sanlam opposed the application reasoning that the present dispute was not a matter of public importance but rather a private dispute between the Applicant and the valuer, and that there existed no fiduciary relationship between the Applicant and the Respondent that could give rise to such claims.

Ruling

The Court relied on S.73 of the Civil Procedure Act, the case of Asumani Mugenyi vs M Buwule Civil Application No. 0245 of 2011 and principles from the Kenyan Supreme Court in Hermanus Phillippus Steyn vs Giovanni Gnecchi-Ruscone Application No.4 of 2010, to allow the Application.

The Court found that the Applicant had met the threshold for grant of the Certificate of great public importance, which includes;
a) substantial question of law arising in the Lower Court,
b) judicial determination of the above question by the Lower Court,
c) the matter should transcend the circumstances of a particular case,
d) decision sets a contradictory precedent leading to uncertainty in the law,
e) exclusion of findings of fact,
f) identification of specific elements of great public importance in the question.

Whereas the Court acknowledged that the exact question framed by the Applicant did not perfectly mirror the issues determined in the appeal, it rephrased the core question to be taken on appeal as indicated in the overview of this article.

Key Insights

i. Ugandan jurisprudence has a two-appeals limit.
ii. S.73 of the Civil Procedure Act allowing third appeals applies to matters originating from an administrative  body as well.
iii. A certificate of great public importance must be sought to prefer a third appeal.
iv. A certificate of great public importance will not be granted on findings of fact in the Lower Court.

This article was prepared by:

• Fred Muwema – Founding Partner M&Co.
• Friday Roberts Kagoro – Managing Partner  M&Co.
• Adiro Rachel Peace – Research Assistant

This publication has been prepared as general information on matters which it concerns, and does not constitute professional advice.

Contact Us: Muwema & Co Advocates | Plot 40 Nakasero Road | P.O. Box 6074 Kampala, Uganda | Website | www.madvocates.com | Email: info@madvocates.com