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ARTICLE · 30 JUNE 2017

Limelight Issue No.67: Third party claims against insurers

Gilchrist Connell
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The Act's operation has been simplified, providing more certainty for insurers, insureds and third party claimants.

AustraliaInsurance
Katherine Czoch
Katherine Czoch
Malcolm Wood
Malcolm Wood
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Introduction

On 1 June 2017, the Civil Liability (Third Party Claims Against Insurers) Act 2017 (the Act) commenced operation changing the landscape in which third party claimants can proceed directly against insurers in NSW to access insurance monies. The Act repeals section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (LRMP Act) which governed this area of law for nearly 70 years.

The position under section 6

Section 6 of the LRMP Act provided claimants with access to insurance monies where proceeding against the insured defendant was not possible or would be pointless because it was, for example, insolvent. It did this by creating a statutory charge over the insurance monies. The charge was created "on the happening of an event giving rise to the claim for damages or compensation" against the insured.

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