The Third Parties (Rights Against Insurers) Act 2010 (the “2010 Act”) received Royal Assent on 25 March 2010, almost nine years after the Law Commission’s Report from which it derives.1 Two years have passed, but the 2010 Act has not yet to come into force and no date has been set for it to do so. According to the Ministry of Justice, work on commencement has been delayed by other priorities, but it is working with other parts of government and the devolved administrations in Scotland and Northern Ireland to ensure a smooth commencement once a decision is taken to bring the Act into force. As part of this work, consideration is being given to whether any rules of court are necessary and whether the scope of the 2010 Act is sufficiently wide to cover all forms of administration rather than just those based on court orders.2

Even when the 2010 Act does come into effect, the Third Parties (Rights Against Insurers) Act 1930 (the “1930 Act”) will continue to govern claims where the insured’s liability arose (and the relevant insolvency event occurred) before that date. Under the 1930 Act (as interpreted by the courts), the third party (“TP”) is in the position of an assignee and can be in no better position than the insured: TP “cannot pick out the plums and leave the duff behind”.3 So, if the insurer would (as against the insured) be entitled to avoid the policy4 or refuse to indemnify in respect of TP’s claim,5 those entitlements can be