First publised in CRI
The challenges faced by the construction industry are continuing to grow and insiders wonder when the storm is going to hit. For some, like Probuild, it already has. Rising inflation and the increasing cost of debt, labour shortages, supply chain delays and escalating cost of freight and materials are putting the industry under enormous pressure. Simultaneously Governments have invested heavily in building and construction to maintain growth in the economy.
High Court holds that an Insolvency Exclusion applies in respect of a claim under the Third Parties (Rights Against Insurers) Act 1930 (“1930 Act”) and awards summary judgment accordingly but declines to provide much-needed guidance on insurers’ liability in the case of claims partially settled by the Financial Services Compensation Scheme (“FSCS”).
Whether insurer liable to repay purchasers’ deposits following dissolution of developer/policy interpretation
Even before the advent of Covid-19, insolvency-related D&O claims already made up a large part of the management risk landscape.
Corporate insolvencies are on the rise. 2019 saw the highest level of underlying insolvencies since 2013, with the retail, hospitality and construction industries particularly affected. As the ongoing uncertainty of the pandemic further increases the risk that companies will run into financial difficulties, insolvency can only continue to make up a large source of directors’ and officers’ (D&O) claims.
Case Alert ‐ [2017] EWHC 2597 (Comm)
Court confirms insurance policy exclusions are not construed narrowly/scope of an insolvency clause
The claimants brought a claim under the Third Parties (Rights against Insurers) Act 1930 against the professional indemnity insurers of their financial adviser. The adviser gave allegedly negligent investment advice in respect of bonds issued by a company which then went into liquidation (and so defaulted on payments due to the claimants).
With the impact of COVID-19 rapidly being felt by businesses, 2020 is likely to see a number of Australian insureds face insolvency. While this presents a number of challenges for (re)insurers in the Australian market, there are steps that (re)insurers can take to manage the situation and their exposures.
There have been a number of cases in recent years in which a party has sought to utilise the provisions of the CPR in order to obtain information on the opposing party's insurance arrangements, rather than waiting for that party to go insolvent in order to use the procedures provided by the Third Parties Rights Act 1930 or 2010. The recent case of Peel Port Shareholder Finance Co v Dornoch Ltd [2017] EWHC 876 (TCC) looks at this again in light of the discretion which Judges have under CPR31.16 for applications for pre-action disclosure and attempts to shut the door on such actions.
In the light of immense pressure on the liquidity of many companies and obligations to file for insolvency in case of illiquidity or overindebtedness, the Germany government will suspend this obligation until 30 September 2020. The suspension will apply if the insolvency is caused by the coronavirus pandemic and if there are sufficient prospects that the company can be turned around.
Whether third party claimant entitled to pre-action disclosure of currently solvent insured's insurance policy