Insurance: New Third Party Rights Against Insurers Legislation

Parliament is currently considering a new Bill that would make it easier for third parties to claim directly against liability insurers in situations where the insured is insolvent.

The Bill is intended to replace the Third Party (Rights Against Insurers) Act 1930 which already allows a third party to claim directly against liability insurers in certain circumstances where the third party has become insolvent.

The key proposed changes to the 1930 Act are as follows.

• A third party would be able to resolve all issues relating to its claim against the insurer in a single set of proceedings. It would not be necessary for the insolvent insured to be a party to any proceedings for the liability of the insurer to be established (although the third party could make the insured a defendant to the proceedings if it wanted to).