Posted on 20th May 2016
The Third Parties (Rights against Insurers) Act 2010 received Royal Assent on 25 March 2010 yet is still not in force.
Implementation of the Act has been delayed because of drafting errors which meant that it did not fully address certain insolvency situations. These were corrected in the Insurance Act 2015, and on 25 February 2016 draft regulations, the Third Parties (Rights Against Insurers) Regulations 2016 were laid before parliament. It is expected that the Act will come into force on 1 August this year.
Once in force, it will allow a claimant to issue proceedings directly against the insurers of an insolvent defendant, rather than having to restore the defendant company to the register of companies first – a time consuming and costly process in itself. The claimant will also be able to notify the insolvent defendant’s insurers directly of the claim, assuming that is, that they can be traced.
The Act will allow claimants to bring a claim directly against a defendant’s insurers in a single set of proceedings. Previously, under the 1930 Act a claimant had to separately establish the insured’s liability first and then apply to court to assign the judgement to their insurers.
This development is of particular interest in long tail industrial disease cases, such as mesothelioma, where many employers are no longer trading and have to be restored in order to pursue court proceedings. This process can impact significantly on the chances of having a case concluded within a claimant’s lifetime. What was a relatively straight forward procedure in the Companies Court has become more protracted under the control of Central London County Court.
My hope is that the belated implementation of these provisions will mean quicker justice for victims of mesothelioma and other industrial diseases.
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