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Third Parties (Rights Against Insurers) Act 2010: Winners and Losers - Marlene Henderson, Browne Jacobson LLP

21/04/17. The Third Parties (Rights against Insurers) Act 2010 (“2010 Act”) which came into force on 1 August 2016 is a clear victory for claimants wishing to pursue claims against insurers of dissolved companies or insolvent individuals. The 2010 Act is intended to resolve the problems which were encountered with the application of the Third Parties (Rights against Insurers) Act 1930 (“1930 Act”). A major problem which existed with the 1930 Act was a requirement for at least two sets of proceedings in order for any claimant to benefit from the provisions of the 1930 Act. The first set of proceedings being required to establish liability against the insured (which is already a dissolved company and would require preliminary proceedings to have the company restored to the register) and another set of proceedings to seek indemnity under the insurance policy. The 2010 Act resolves this problem by allowing a third party to bring proceedings to enforce rights transferred under the 2010 Act against the insurer of the “relevant person” without first establishing liability against that person (see section 2 of the 2010 Act). This is a major benefit for the claimants. However, claimants must not overlook some key points which will affect the benefits conferred.

The first of the key points is that the 2010 Act does not have retrospective effect and therefore the 1930 Act remains in force for liabilities incurred before 1 August 2016 and where the defendant becomes a relevant person before 1 August 2016. Under section 1(1) of the 2010 Act, the transfer right applies when...

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