A statutory instrument has recently been passed providing that the Third Parties (Rights Against Insurers) Act 2010 will, finally, come into force on 1 August 2016, some six years after it was first passed.
The act will replace and, in general, streamline the procedures put in place by the Third Parties (Rights Against Insurers) Act 1930. Perhaps the two most significant changes brought about by the 2010 Act are:
- The 2010 Act will allow a third party with a claim against an insolvent company to proceed directly against the insolvent company’s insurer, without having to first proceed against, and establish the liability of, the insolvent company (as was the case under the old law). It will still be necessary to establish liability against the insolvent company, although this liability can now be established by seeking a declaration of liability in the action against the insurer.
- The 2010 Act will also allow a third party to request information in relation to the relevant insurance policy from the insured, provided that the third party reasonably believes that the insured has incurred a liability to it. Information may also be sought from other parties which may have access to relevant information (such as brokers or the insurer itself) if the third party reasonably believes that a liability has been incurred, that a potentially responsive insurance policy exists and that the rights under that policy have been transferred to it. The information which can be sought includes confirmation that the insurance policy exists, the identity of the insurer and the terms of the policy. Once a notice seeking information is received, the recipient must respond within 28 days.