On 15 July 2025, the Court of Appeal gave judgment1 in a case concerning whether third party claimants could have an entitlement to the proceeds of an insurance claim in circumstances where those proceeds were paid to the insured, a company in liquidation, prior to its entering into liquidation.
The Court of Appeal rejected arguments that terms should be implied to establish a trust or proprietary interest over the proceeds in favour of the claimants. Rather, the Court confirmed that the Third Parties (Rights against Insurers) Act 2010 (the “Act“) can only transfer an insured’s rights against its insurer to a third party upon the occurrence of a qualifying insolvency event. If the insurance proceeds were received by the insured prior…