2016 is turning out to be a year of significant reform of insurance law. The Insurance Act comes into force on 16 August 2016 and now we know that the Third Parties (Rights against Insurers) Act 2010 will finally come into force on 1 August 2016, having been updated by the Third Parties (Rights against Insurers) Regulations 2016.

Varden Nuttal Ltd v Michelle Louise Baker (2016)

It was decided that a bankruptcy order should have been made in circumstances where the debtor had misled the creditors when agreeing and entering into an Individual Voluntary Arrangement (“IVA”).

Background

The Third Parties (Rights Against Insurers) Act 2010 (“TPR”) will finally come into force on 1 August 2016, making it easier for third parties to bring claims against insurers of insolvent companies.  It has taken more than six years, spread over three separate governments and was amended even before it came into force, but TPR will finally replace the Third Parties (Rights Against Insurers) Act 1930 (the “1930 Act”).

The Background

The Employment Tribunal ruled last month that the former employees of Sahaviriya Steel Industries UK Limited (in liquidation) are entitled to the maximum protective award for a complete failure by SSI to inform and consult them about their redundancies (90 days’ pay for each of the 1100 employees affected).

The Act, which received Royal Assent as long ago as 25 March 2010, is finally due to come into force on 1 August 2016. It has the intention of allowing third parties to make claims directly against liability insurers in insolvency situations.

1930 Act

The 2010 Act has now been updated by regulations (the Third Parties (Rights against Insurers) Regulations 2016) to reflect changes in insolvency law. Accordingly, the long-awaited 2010 Act will finally come into force on 1 August 2016.

It will be recalled that the 2010 Act is intended to make it easier for third party claimants to bring direct actions against (re)insurers where an insured has become insolvent. The key changes coming in are as follows:

Julian Kenny QC appeared for the Appellants in the Supreme Court who handed down judgment 11 May, a much anticipated ruling by shipowners and subsidiary companies affected by the OW Bunker collapse.

The judgment affirms the rulings of the Court of Appeal and of first instance Judge, Males J, that a contract for the supply of bunkers that a shipowner had entered into with a subsidiary of the now insolvent OW Bunker company was not one to which the Sale of Goods Act 1979 applies.

Retailers BHS and Austin Reed have recently gone into administration, leaving 11,000 and 1,200 jobs respectively at risk. In such uncertain times, what rights do affected employees have?

What is administration?

As we reach the 30th anniversary of the Insolvency Act 1986, the legislators have clearly decided it is time to dust the profession down and bring out a shiny new model for us to hop aboard and take a journey (for some) into the unknown.

But what do all these changes mean in practice, and is there any theme running through them?

Fee regime

Only a month ago we were singing the praises of the CVA and calling them the saviour of the high street following the creditors’ approval of the BHS CVA. (See our earlier blog Move over Mary Portas, CVA’s are the real saviour of the High Street).