High Court Confirms That Third-Party Rights Against Insurers Are Restricted

The recent High Court decision in Michael Murphy v Allianz Plc1 provides further clarification of the scope of Section 62 of the Civil Liability Act 1961 - in particular, the conditions which must be satisfied for its application.

This decision follows a number of similar determinations of the High Court in recent years and confirms the following important principles in relation to Section 62:

The insured, who has a liability insurance policy, must become bankrupt or die (if an individual), be wound up (if a company) or be dissolved (if a partnership or other incorporated association); Liability should be established in the underlying claim against the insured and quantum assessed before the insurer is joined to proceedings or sued; and The courts will recognise a valid repudiation by an insurer. Background

In Dunne v PJ White Construction Company2 the Supreme Court considered it to be "an inevitable consequence" of Section 62 that it creates a right of action in favour of an injured third party. Chief Justice Finlay held that in such...