At the time of that alert, changes to the proposed wording of
the TP Act
2010 were anticipated to ensure that the new statute would
reflect current insolvency law and in particular, the nature of the
insolvency that must take place in order for the provisions of the
Act 2010 to apply.
The required amendments were subsequently made by the Insurance
Act 2015 and it has now been confirmed that the updated TP Act
2010 will finally come into force on 1 August 2016.
As at that date, the Third Parties (Rights against Insurers) Act
1930 (the 1930 Act) will be repealed and the new statute will apply
to all relevant cases save where both of the following have
occurred before 1 August 2016:
the insured has incurred a liability to the third party;
the insured has become insolvent.
If both those factors occur prior to 1 August 2016, the 1930 Act
will still apply.
As set out in our previous alert, under the TP Act
2010, the potential route for third party claimants to
recover against the insurer of an insolvent party will be greatly
From a practical perspective, two of the most significant
changes can be highlighted by considering a common scenario: say
your business has a liability claim against an insolvent company
that has been dissolved - you want to make a claim against the
liability insurers of that insolvent company. Once the TP Act
2010 is in force (as compared to the "old" law
under the 1930 Act):
your business will no longer have to establish the insolvent
company's liability before you can claim against the insurer;
and, as a result
you will not have to have the insolvent company restored to the
register of companies in order to establish its liability.
These are just two of the changes that will affect this type of
claim, massively reducing delay and expense which are key factors
when you are evaluating the pros and cons of seeking recovery.
A brave new world?
In short, yes, in these insolvency scenarios. The TP Act
2010 is a radical overhaul of the law in this area and will
make these types of proceedings far more accessible to parties with
claims against insolvent insureds. It is long-awaited and promises
to deliver. Time will tell.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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