The Third Parties (Rights against Insurers) Act 2010: 2025 Decisions 

The Third Parties (Rights against Insurers) Act 2010 (the 2010 Act) remains the principal mechanism enabling third-party recovery where a policyholder becomes insolvent. In essence, where a policyholder’s liability to a third party is covered, the policyholder’s rights against its insurer in respect of that liability transfers to the third party upon a qualifying insolvency event. The 2010 Act came into effect in August 2016, and since then, the courts have steadily refined their approach to both substantive coverage issues and points of procedure.

Against that backdrop, this blog considers three 2025 decisions ((i) Desai v Wood [2025] EWCA Civ 906; (ii) Makin v Protec & QBE [2025] EWHC 895 (KB); and (iii) AmTrust Specialty Ltd v Endurance Worldwide Insurance Ltd [2025] EWCA Civ 755), that refine the 2010 Act’s limits and clarify the practical tools available to third-party claimants. 

1. Desai v Wood 

In Desai v Wood, the Court of Appeal considered whether professional indemnity proceeds paid to the policyholder pre-insolvency, could later be claimed directly by a third-party claimant under the 2010 Act. The Court confirmed that where an insurer validly indemnifies a policyholder before the insolvency event (the triggering “relevant event” under the 2010 Act), those proceeds once received, are the property of the policyholder company absolutely. This position can only be altered through express contractual wording or a clear proprietary interest in favour of the third party. No express, implied or constructive trust arose on the facts; the insurer’s liability had been discharged pre‑insolvency.

This ruling reaffirms the fact that the 2010 Act only transfers existing rights. It cannot recreate rights that have been extinguished by an earlier payment. Once the insurer has performed its obligations, the chain of assignable rights is broken. 

Comment

Contracting parties (i.e., policyholders and prospective third-party claimants) may want to consider seeking express proprietary protections to ring‑fence policy proceeds, including in insurance policies and bilateral contracts. Contractual controls adopted may include:

• Requiring policyholder notification before any settlement is entered into with insurers;
• Including clauses that ring-fence proceeds until all third-party liabilities are released; and
• Prohibiting the policyholder from compromising or waiving rights under the policy without prior consent.

2. Makin v Protec & QBE  

In Makin v Protec & QBE, the third-party claimant (Makin) suffered a stroke from an assault by Protec's (the policyholder) door supervisors in 2017. Following Protec's liquidation, its insurer, QBE, was joined to the action pursuant to the 2010 Act. QBE argued that it was not liable to Makin, because Protec had failed to notify QBE of Makin’s claim, in accordance with the terms of the policy.

The policy required notice "as soon as practical but in any event within 30 days in the case of other damage, bodily injury, incident accident or occurrence, that may give rise to a claim under your policy", which QBE argued was a condition precedent, on the basis that the policy expressly provided that breach would “entitle [insurers] to refuse to deal with the relevant claim”.

The Court agreed with QBE, finding that the meaning of the condition was sufficiently clear, despite not being expressly labelled as a “Condition Precedent”. 

As a result, Makin did not have a third-party claim, as Protec’s own claim failed. 

Comment

Potential third-party claimants should take steps to interrogate the insurance position and seek confirmation from defendants that claims, and potential claims have been notified to insurers at the earliest opportunity. 

Similarly, potential third-party claimants should seek confirmation that any conditions precedent have been complied with, in order to protect their third-party rights to those claims.

3. AmTrust Specialty Ltd v Endurance Worldwide Insurance Ltd 

In AmTrust Specialty Ltd v Endurance Worldwide Insurance Ltd, the Court of Appeal considered whether pre-inception communications between the insurer and policyholder could be disclosed to a third-party claimant in respect of a claim made under the 2010 Act, to assist with policy construction.

AmTrust made an application for Extended Disclosure under PD 57AD, arguing that the relevant pre-inception documents (which it did not have access to) would enable it to interpret the policy wording and determine whether the claim was covered under the policy.

The Court of Appeal ordered disclosure of the insurance placement correspondence (overturning the decision of the court below), concluding that where the intention behind policy wording is genuinely in issue, inception materials are relevant to construction and may be ordered for disclosure; particularly where the policy contains an “incorporation clause” or lists “information seen and agreed”. It also held that there is no threshold “relevance” test under PD 57AD; disclosure is a multi‑factor, proportionality exercise, and, consequently, fairness required that the documents be disclosed to AmTrust.

Comment

This case is a rare example of the Court of Appeal intervening in a case‑management decision in relation to a claim brought under the 2010 Act, in support of a third-party claimant’s rights under the 2010 Act.

This case may give third-party claimants seeking to bring a claim under the 2010 Act confidence in making an application for Extended Disclosure under PD 57AD for pre-inception communications. 

As a consequence, policyholders should be alive to the fact that placement communications (including pre-inception correspondence, proposal forms, schedules and broker notes) could be potentially disclosable in third-party claimant litigation and maintain clear records.