Third Parties' (Rights Against Insurers) Act 2010 Comes Into Force In August

The 2010 Act has now been updated by regulations (the Third Parties (Rights against Insurers) Regulations 2016) to reflect changes in insolvency law. Accordingly, the long-awaited 2010 Act will finally come into force on 1 August 2016.

It will be recalled that the 2010 Act is intended to make it easier for third party claimants to bring direct actions against (re)insurers where an insured has become insolvent. The key changes coming in are as follows:

1) There will no longer be any need for the third party to "establish" the insured's liability to it first (by judgment, arbitration award or agreement). The 2010 Act will allow a third party to litigate the substantive cause of action alongside an action for an order that the insurer pay any damages awarded.