You are a claims handler. Your company provides cover for a fleet of private vehicles owned by BAC Ltd and driven by its employees. One of the employees suffered significant injuries when a third party broke a red light and collided with his company car. You have settled the claim under your policy and are now seeking to recover your outlay from the third-party's insurer.

a) Explain the principles that support your rights to take this action and how any recovery action can be pursued. (10 marks)

b) Citing relevant case law, discuss the measure of any recovery for the following payments you made:

(i) There was new for old cover on the vehicle as it was only 11 months old. Under this, you paid BAC Ltd the replacement cost of a brand new vehicle. (4 marks)

(ii) You paid hospital expenses of 500 and a benefit of 10,000 for permanent partial disablement that were covered under the personal accident section of the motor policy. (3 marks)

(iii) You paid 1,000 for personal effects as this was the limit under the policy. The employee had provided receipts for goods valued at 4,500 that were damaged in the accident. (3 marks)