Suing insurers of insolvent defendant to be made easier

Claimants will be able to sue an insolvent defendant’s insurer directly without first having to sue the wrongdoer under draft legislation put forward by the Ministry of Justice last week.

The Third Parties (Rights Against Insurers) Bill would alter the present position where the claimant has to establish the defendant’s liability before bringing a separate claim against their insurer.

The MoJ said the proposals would cut time and costs because there would no longer be a need to bring separate proceedings. It would also give claimants the right to policy information sooner and so allow them to establish the chances of success at an earlier stage.

Justice minister Bridget Prentice said: “It is essential, particularly in the current climate, that victims are able to settle rightful compensation claims in as inexpensive and unstressful a way as possible – even if the wrongdoer has gone bust.”

The draft legislation is part of a trial of a new House of Lords procedure for Bills arising out of Law Commission proposals.