Bradley v Eagle Star Insurance Co Ltd
A third party could not use the 1930 Act to claim against the insurer of a company which had been dissolved, because the company's liability had not been established before dissolution.
Facts
Mrs Bradley worked in a cotton mill for many years, and developed byssinosis, a lung disease caused by cotton dust. By the time she wished to bring a claim, her former employer had been wound up and dissolved. She sought to bring a claim directly against the employer's liability insurers, under the Third Parties (Rights against Insurers) Act 1930, without first establishing the employer's liability.
Legal principle
The House of Lords held that she could not bring the claim. Lord Brandon said that, applying Post Office v Norwich Union, the insured's right to an indemnity did not arise until its liability had been established, and that, since the company had been dissolved, its liability could no longer be established by judgment against it, so there was no right to be transferred to Mrs Bradley. The decision was reversed by section 141 of the Companies Act 1989, which allowed a dissolved company to be restored to the register for the purpose of bringing personal injury claims, and the law was later reformed by the Third Parties (Rights against Insurers) Act 2010.
Related cases on liability insurance and third party rights
- Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572
- Beresford v Royal Insurance Co Ltd [1938] AC 586
- Durham v BAI (Run Off) Ltd (The Employers' Liability Policy Trigger Litigation) [2012] UKSC 14, [2012] 1 WLR 867
- Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, [2003] 1 AC 32
- International Energy Group Ltd v Zurich Insurance plc UK [2015] UKSC 33, [2016] AC 509
- Post Office v Norwich Union Fire Insurance Society Ltd [1967] 2 QB 363
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