As discussed in previousposts, the Consolidated Appropriations Act of 2021 (the “Act”) was signed into law on December 27, 2020, largely to address the harsh economic impact of the COVID-19 pandemic.

With courts and government agencies around the world enacting emergency measures in response to the Covid-19 pandemic – ranging from complete shutdowns to delays and limitations – advancing the ball in dispute resolution is more challenging than ever. Because fraud investigations and complex asset recovery matters are typically managed by litigation counsel and often follow litigated claims, clients have a tendency to see the effort through a litigation lens.

In Peel Port Shareholder Finance Co Ltd v Dornoch Ltd [2017] EWHC 876 (TCC), Peel Port Shareholder Finance Co Ltd (Peel Port) applied for pre-action disclosure of the defendant's insurance policy under Civil Procedure Rule 31.16. Peel Port was not able to rely on the provisions in Third Party (Rights against Insurers) Act 2010 because the defendant was not insolvent. Peel Port argued that it was highly probable that rights against insurers would be transferred to them under the 2010 Act in due course.

A key question in any litigation is whether the defendant can satisfy a judgment. Where the defendant is both insolvent and insured a further issue is whether the claimant can ultimately recover payment from the insurer. This may be possible under the Third Parties (Rights against Insurers) Act 1930 ("1930 Act") but there are a number of significant hurdles for a third party to overcome before it can benefit from the application of the1930 Act.

The Third Parties (Rights Against Insurers) Act 2010 is a step closer to coming in to force with the publication of draft Regulations whose aim is to correct omissions in the Act. Once in force the Act will improve the position of claimants who are bringing actions against insolvent defendants and looking to recover from those defendants' insurers.

In a recent decision by the United States Bankruptcy Court for the Southern District of New York, Weisfelner, v. Fund 1, et al. (In re Lyondell Chem. Co.), 2014 Bankr. LEXIS 159 (Bankr. S.D.N.Y.