On 25 March 2010, the Third Parties (Rights Against Insurers)
Act 2010 ("the Act") received royal assent and became law
in England and Wales.
The purpose of the Act was to introduce reforms to modernise the
legislation which had previously been set out in the Third Parties
(Rights Against Insurers) Act 1930.
Under the Act the rights of an insolvent insured to an indemnity
from its insurers under a liability policy are still transferred to
a third party claimant. However, the Act introduces 4 key
changes:
- A third party claimant is no longer required to first establish
liability against an insured before bringing proceedings against
their insurers. A new Court procedure is available to third
parties. The third party has a right to seek declarations as to the
insured's liability to them and as to the insurer's
potential liability under a contract of insurance in one set of
proceedings. If the Court or Tribunal makes such declarations it
will be able to make an
