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Wednesday, June 28, 2017

Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW)

As we welcome winter, insurers may have also welcomed commencement of the Civil Liability (Third Party Claims Against Insurers) Act 2017  (NSW) (the CL (Insurers) Act) on 1 June 2017. 

The CL (Insurers) Act clarifies the ambiguity of section 6 of the Law Reform Miscellaneous Provisions Act 1946  (NSW) especially regarding defence costs, claims made policies and claims for pure economic loss.  Seven highlights of the CL (Insurers) Act include:

  1. A claimant can now recover compensation or damages directly from the insurer in respect of an insured person's liability to the claimant.
  2. The claimant cannot recover any amount from a re-insurer.
  3. The insurer has the same rights and liabilities the insured person would have had if the proceeding were brought directly against the insured person.
  4. The insurer is liable to the extent it would have been liable under the insurance contract in respect of the insured person's liability to the claimant.  
  5. An insurer's liability to a claimant may not be discharged by any settlement between the insurer and the insured person or any payment made directly to the insured person by the insurer.
  6. Removal of the concept of the 'charge' previously provided for in section 6 of the Law Reform Miscellaneous Provisions Act 1946  (NSW).
  7. Leave to proceed against the insurer can be given by the court retrospectively, such that a claimant can commence a proceeding now and seek leave of the court later.

A copy of the CL (Insurers) Act can be found here.  We will watch this space with interest!

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