The Dekagram: 26th August 2025

This week Tom Clarke addresses the Third Parties (Rights Against Insurers) Act 2010, a double edged sword if ever there was one – whilst, on the one hand, it can provide a lifeline for claimants seeking redress from insolvent defendants, it is not without its pitfalls, as Tom outlines below.

Conditions Precedent and the Third Parties (Rights Against Insurers) Act 2010

The Third Parties (Rights Against Insurers) Act 2010 (‘’the Act’) provides a mechanism for those third parties who can no longer recover from insolvent defendants to instead recover directly from insurers. However, significant complications can arise when an insured defendant fails to comply with the terms of the policy with their insurer. The recent cases of Archer v R’N’F Catering Ltd [2025] EWHC 1342 (KB) and Makin v Protec Security Group Ltd [2025] EWHC 895 (KB) show that early notification of an insurer is key; if the defendant insured failed to comply with a condition precedent in their policy, such as early notification, the claimant will be unable to recover.

In Archer, the claimant became unwell following a meal in a restaurant operated by the defendant, R’N’F. She notified them of her illness four months later, in November of 2019, and followed up with a CNF in January 2020. In her CNF the claimant expressly asked R’N’F to provide details of their insurer. Not only did they not do so (ignoring the claimant completely) they did not themselves contact their insurers. A further letter from the claimant’s solicitors in October 2020 finally resulted in R’N’F getting in touch with their insurers, Riverstone. However, they then proceeded to ignore correspondence from Riverstone’s claim handlers until October 2022. During this period, Riverstone stressed to R’N’F that a failure to assist them with the claim could constitute grounds to decline indemnity. In February 2023 R’N’F entered voluntary liquidation and the claimant added Riverstone as a party, seeking to recover from them under the Act.

Riverstone argued that the claimant could not rely on the Act because R’N’F had no right of indemnity. The claimant argued that even if the Court found that R’N’F had failed to comply with the notification requirement, then the claimant’s own actions in joining Riverstone to proceedings constituted fulfilment of the policy terms pursuant to s.9(2) of the Act, which reads:

(2) Anything done by the third party which, if done by the insured, would have amounted to or contributed to fulfilment of the condition is to be treated as if done by the insured.

The claimant relied on Horne v The Prudential Assurance Co Ltd 1997 SLT (Sh CT) 75, which held that the Court should consider the actual knowledge of an insured when deciding if notification was made “as soon as reasonably possible”. As s.9(2) of the Act required the Court to treat the claimant’s actions as if they were the insured’s, it was their objective awareness of the requirement to notify that was the relevant factor.

The Court had little difficulty concluding that R’N’F had breached the condition precedent in their policy with Riverstone, stating that their excuse that emails had been going to their spam folder amounted to little more than “the dog ate my homework”.

Unfortunately for the Claimant, the Court also disagreed with the s.9(2) argument that they were able to cure the breach of the policy terms themselves. It was submitted on Riverstone’s behalf that such an approach had the potential to significantly undermine the rights of insurers:

“If an insured company defended a claim without notifying its insurer and lost the claim at trial after, say, three years of litigation, a claimant may seek to wind up the insured when it could not pay the judgment liabilities. Applying the claimant’s logic, on the winding up of the company, the claimant in the example could then seek to rely on s.9(2) to provide a first notification of the claim to the insurer at that stage. Such an approach would make a mockery of an insurer’s contractual rights to be notified of a possible claim as soon as reasonably possible.”

As a result, the Court held that R’N’F’s failure to notify their insurers of the claim in good time had stripped the claimant of their ability to recover from the insurer by way of the Act. To allow the claimant’s actions to fulfil the condition precedent would have effectively resurrected an indemnity which had been lost over two years previously.

In Makin the claimant had been put into a headlock by security staff at the premises owned by the defendant. He had later suffered a stroke and had been left with significant neurological disability. A preliminary issue trial before HHJ Sephton KC in July 2023 established that the security staff and therefore their employers were liable for the assault and the resultant injury to the claimant. However, the employers went into liquidation on the day preceding the trial and their insurers, QBE, argued that they had breached the early notification requirement in their policy and therefore that the claimant could not rely on the Act.

The Court in Makin had to give serious consideration to the question of whether or not the notification requirement was in fact a condition precedent. The policy terms did not refer to it as such and the claimant argued that there was sufficient ambiguity as to the functioning of clause for the Court to find that it was not a condition precedent after all. The insurers argued that the clause was similar in construction to one which was found to be a condition precedent by Ritchie J in Cuckow v AXA Insurance UK Plc [2023] EWHC 701 (KB). Unfortunately for the claimant the Court agreed and noting the “merit to the court taking a consistent approach to the construction of clauses in similar terms”, found that there was no “true ambiguity” and that compliance with the notification requirement was a condition precedent and, as in Archer, the insurer was off the hook. It is important to note that the Court in Makin found that had the claimant succeeded in persuading them that the notification requirement clause was not a condition precedent and instead only gave the insurers the discretion to refuse to indemnify, then the claimant would have been able to recover via the Act. 

Both HHJ Pearce in Makin and HHJ Kelly in Archer expressly referred to the sympathy they had for claimants who would now not be able to recover due to notification failures which weren’t their fault. On the face of it, there is something slightly perverse about injured claimants being denied any redress because of defendants who, having neglected to take adequate care for their safety, also neglected to abide by their contractual obligations to their own insurer. Cases such as Archer and Makin are certainly likely to renew calls for the institution of some form of MIB-type body to act in lieu of indemnified employers. As the authors of Colinvaux & Merkin’s Insurance Contract Law note, the absence of such a body constitutes a “potentially serious” lacuna (Vol 3, D-0452). The DWP even considered establishing an Employer’s Liability Insurance Bureau but rejected the idea in 2012. In the meantime, there is due to be an appeal heard in Makin in the Spring of 2026, so watch this space.

About the Author

Tom Clarke was called in 2022 and has a wide-ranging common-law practice across all of Chambers’ core areas. He is in court almost every day alongside a busy civil paperwork practice. He has a sensitive and patient manner with clients and witnesses alike. He has represented the families of recently deceased individuals in both inquests and clinical negligence proceedings and is part of a team at Deka Chambers working to update the vulnerable witnesses toolkit for the advocates’ gateway. Throughout 2024, Tom has been brought in to assist with document work on multiple catastrophic injury claims by senior members of chambers and is currently being led by Giles Mooney KC in a childbirth hypoxia claim.