The following Insurance & Reinsurance guidance note Produced in partnership with Richard Spiller and Rebecca Huggins of HFW provides comprehensive and up to date legal information covering:
The Third Parties (Rights against Insurers) Act 2010 (TP(RAI)A 2010) repeals and replaces the Third Parties (Rights against Insurers) Act 1930 (TP(RAI)A 1930). The purpose of TP(RAI)A 1930 was to ensure that, where an insured had incurred an insured liability to a third party but subsequently became insolvent, the insurance money would be paid to the third party rather than become an asset in the insolvency to be shared amongst all the insured's creditors.
Like its predecessor, TP(RAI)A 2010 transfers to the third party some of the insolvent insured's rights under the insurance policy and allows the third party to bring proceedings directly against the insurer.
The key change in TP(RAI)A 2010 is that a third party can now bring proceedings directly against the insurer or seek information about the insurance position at an early stage, without first establishing the liability of the insured.
TP(RAI)A 2010 was drafted following a consultation by the Law Commission and the Scottish Law Commission in 2001. The Law Commissions identified the following issues with TP(RAI)A 1930:
the third party had to establish the liability of the insured and the quantum of the insured loss before being able to bring proceedings against the insurer. This resulted in multiple sets of proceedings
if the insured was
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