It includes a number of reforms designed to strengthen a third party’s position in respect to the insurer, such as allowing a third party to issue proceedings directly against the insurer, resolving all issues (including the insured’s liability) within those proceedings. It also allows a third party to obtain information at an early stage about the rights transferred to it, enabling an informed decision about whether or not to commence or continue litigation to be taken.
The Bill also provides exceptions to insurers’ defences, thus preventing an insurer from defeating a third party’s claim by relying on certain technical defences, based on conditions in the insurance contract. It also resolves the current ambiguity regarding its application to voluntarily-incurred liabilities such as liabilities covered by legal expenses insurance, health insurance and car repair insurance.
The Bill’s 2nd reading in the House of Lords is scheduled for 7 December 2009.
