Privity of Contract: Contracts for the Benefit of Third Parties [1996] EWLC 242(12) (31 July 1996)

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1. Preserving Existing Exceptions

12.1 In the Consultation Paper, it was provisionally recommended that existing statutory exceptions to the third party rule should be preserved. (1) We made no provisional recommendations in relation to existing common law exceptions. (2) Some consultees suggested that the existing exceptions to the privity rule could best be preserved by statutory listing. We remain of the opinion that current statutory exceptions should be preserved, but we have concluded that this can be achieved by a general provision (to the effect that our proposed Act is to be without prejudice to any right or remedy of a third party which exists apart from the Act) rather than a more elaborate statutory listing. We also see no merit in attempting to abolish the common law exceptions, some of which give third parties more secure rights than will be given by our proposed reform. Others have developed through somewhat artificial and forced use of existing concepts, and we would expect that such exceptions would wither away as a consequence of our reform, which will render such artificiality unnecessary. Nor do we think that the common law exceptions should be listed or codified. Many of the common law exceptions are vague and shifting (3) and to codify or even list them might deprive the judges of flexibility in the development of the law in future. We would therefore recommend a general provision (as above) preserving the third party's rights at common law.

12.3 In so far as one has in mind claims in the tort of negligence for pure economic loss as exceptions to the third party rule, (4) this seems an appropriate point to mention concurrent liability. In the Consultation Paper, we provisionally recommended that implementing legislation should not deal with the question of concurrent actions in contract and tort. (5) Most consultees accepted this and, since the publication of the Consultation Paper, the House of Lords in Henderson v Merrett Syndicates Ltd (6) has authoritatively ruled on the question by laying down that there is no automatic objection to allowing concurrent liability between tort and contract. We envisage that, analogously to the two-party situation, a third party's right under our proposed Act will be concurrent with, and will not knock out, a third party's rights in tort; and, in the light of Henderson v Merrett, we certainly do not believe that there is anything to be gained by dealing with this question in our proposed legislation.

2. Should Existing Legislation Conferring Rights of Enforceability on Third Parties Preclude a Third Party Taking Rights under Our Proposed Legislation?

12.5 We have found very difficult the question of the interrelationship between our reform and the existing preserved statutory exceptions. At first blush, one might have thought that our proposed legislation and existing statutory exceptions could easily sit alongside each other. That is, one might have thought that, where the third party has a right of enforceability under another enactment and under our proposed Act, he could simply choose which statute to invoke; (7) and that where the third party does not have a right of enforceability under another Act, but would have under our proposals, our proposed Act should plainly apply. Moreover, we do not accept as a general proposition that, just because a statute has in the past conferred rights of enforceability on some third parties, that represents a deliberate legislative choice that in no circumstances shall other third parties have the right to enforce the type of contract in question. We would emphasise that the basic policy of our reform - that the intentions of the contracting parties to confer legal rights on third parties should be upheld - is a compelling one and should not lightly be displaced by arguments that this would clash with the policies underlying other statutes.

12.6 Nevertheless it has been persuasively suggested to us that in three areas to permit third parties to claim a right of enforceability under our proposed Act would both contradict the policy underlying the relevant legislation and would cause unacceptable commercial uncertainty. (8) The three areas are first, contracts for the carriage of goods by sea; secondly, contracts for the international carriage of goods by road, rail or air; and thirdly, contracts contained in a bill of exchange, promissory note or other negotiable instrument.

(1) Contracts for the Carriage of Goods by Sea

12.7 The relevant statute in mind here is the Carriage of Goods by Sea Act 1992 and the problems drawn to our attention relate both to third parties who have rights of action under that Act (that is, who on the facts in question have the right to enforce the contract), and to those who do not (whom for convenience we label "new third parties").

12.8 Under the 1992 Act a third party (a consignee or sub-buyer) takes the rights and, where he exercises his rights, incurs the liabilities (of the original consignor) under the contract of carriage: that is, the Act permits the enforcement by subsequent holders of a bill of lading, or by persons entitled to delivery under ship's delivery orders or sea waybills, of the terms of the contract of carriage only on terms that such a person also becomes subject to the liabilities of the contract of carriage. (9) Thus, a holder of a bill of lading who seeks to take advantage of the terms of the contract of carriage in order to sue the carrier for short delivery, say, or for damage to the cargo while in transit, will also become liable to the carrier for claims for unpaid freight or for demurrage charges. Furthermore, the basic model for the 1992 Act is one of assignment so that the third party's rights are transferred from the promisee leaving the promisee with no rights of enforcement. In both these respects, the promisor is better off under the 1992 Act than it would be under our proposed Act; that is, under our scheme, a third party takes the benefits but not the burdens of a contract (except to the extent that the benefits are conditional); and the promisor is liable to the promisee as well as to the third party. It would be unacceptable if the provisions of the 1992 Act - specifically tailored, as they are, to the demands of the shipping industry - could be undermined to the detriment of a promisor by a third party (who falls within the 1992 Act) choosing to sue under the provisions of our proposed reform rather than under the 1992 Act. (10)

12.9 Turning to "new third parties" it is clear that the policy of the Carriage of Goods by Sea Act 1992 was to confine the enforcement of contracts of carriage covered by the Act to certain third parties only (namely, subsequent holders of a bill of lading or persons entitled to delivery under a sea waybill or a ship's delivery order). Yet under our proposals other third parties could be given rights to enforce such a contract. That the Act was intended to exclude enforcement by other third parties clearly emerges from the following passage in the Law Commission's Report (11) which led to the Act:-

Consultants suggested several different ways of extending the 1855 [Bills of Lading] Act beyond bills of lading. One suggestion was to adopt an agreed definition of the type of document to be covered in legislation, without naming any documents specifically. The holder of such a document would be able to assert rights of action against the carrier. By defining the class of document to which the Act applies, it would be easier to construe into the Act a wider range of documents including those currently in use and others as yet unthought of, thus ensuring that the Act would have a lengthy shelf-life. Another solution eschews any sort of documentary approach and instead would allow any third party to vindicate rights against a carrier who had become obliged to deliver goods to him. However, on balance, we recommend that legislation should enumerate a number of specified documents. We prefer the certainty of an approach which makes it clear which documents are covered by the Act and which are not. Since we have adopted an evolutionary approach to reform, we have built on the foundations of the 1855 Act, retaining those features of the Act which have worked well... Those shipowners, cargo interests and their legal advisers whom we have consulted want to know which documents are included in legislation and which are not. They do not want the certainty of the 1855 regime overthrown in favour of an untried technique which makes no mention of any sort of document with which they are familiar, but rather makes everything depend on the concept of legal obligation, which is seen as too imprecise and uncertain.

12.10 It is our view, therefore, that, at least as regards new third parties, it would indeed in general contradict the policy of the Carriage of Goods by Sea Act 1992 if a third party were able to rely on our proposed Act to enforce contracts covered by the 1992 Act; and we therefore consider that our proposed Act should not apply to contracts covered by the 1992 Act. (12) Having said that, we are most anxious to preserve the operation of our Act as regards exclusion and limitation clauses in such contracts. (13) Nothing in the 1992 Act was directly concerned with the problem of the enforceability of such clauses and there is therefore, in this respect, no clash of policy between our proposals and the 1992 Act.

12.12 Contracts for the international carriage of goods (14) by road or rail, or cargo by air, are governed by international conventions that are given force in England by various statutes. (15) One possible problem posed for our proposals by the conventions is that in some situations, where third parties are given rights to enforce international contracts of carriage, they also take some or all of the burdens under the contracts. (16) To allow such third parties to have rights under our proposed Act might conflict with the conventions in that our proposals enable the creation of rights, which may be conditional, but do not enable burdens to be imposed on a third party. (17)

12.13 What about "new third parties"? It is arguable that the general philosophy of the air, road and rail conventions is to leave it to national law to determine precisely which third parties should have rights of enforceability, while subjecting all those who bring actions in respect of international conventions to particular restrictions and limitations. (18) Yet Article 54 of the COTIF (CIM) Convention on carriage of goods by rail appears to lay down definitively when consignors, consignees, and persons designated by consignees can bring actions against the railway arising from the contract of carriage; and if the consignor has rights of suit, the consignee does not, and vice versa. (19) If this is a correct interpretation of the Convention, our proposals could undermine it by allowing other third parties rights of action. It is also noteworthy that, whatever the policy of the Convention on carriage by road, section 14(2) of the Carriage by Road Act 1965 (giving the force of law in the United Kingdom to the CMR Convention) defines as "persons concerned" to whom the Convention applies: "(a) the sender, (b) the consignee, (c) any carrier who... is a party to the contract of carriage, (d) any person for whom such a carrier is responsible..., (e) any person to whom the rights and liabilities of any of the persons referred to in paragraphs (a) to (d) to this subsection have passed (whether by assignment or assignation of operation of law)." This would appear to rule out other third parties and, given that the Act is applicable to Scotland, it might be regarded as having deliberately ruled out claims by a third party under a ius quaesitum tertio.

12.14 For these reasons, we are satisfied that there is at least a danger that our proposed Act might be used to undermine the conventions (or implementing statutes) on the international carriage of goods. We therefore consider that our proposed Act should not apply to a contract for the international carriage of goods by road, rail or air to which the international conventions apply. (20) Again, however, we see no such danger in respect of a third party being given the right to rely on an exclusion or limitation clause in the carriage contract. (21)

(3) Contracts Contained in Bills of Exchange, Promissory Notes and Other Negotiable Instruments

12.16 As regards bills of exchange, promissory notes and (most) negotiable instruments, (23) the Bills of Exchange Act 1882 gives third party rights of enforceability only to those who are holders. Yet under our proposed Act it is conceivable that other third parties to a contract contained in a bill of exchange promissory note or other negotiable instrument would have rights to enforce that contract. We accept the force of the argument that it would both undermine the policy of the Act and cause unacceptable uncertainty (24) to open up the possibility of third parties who are not holders being able to sue on such contracts, and we therefore consider that our proposals should not apply to such contracts.

3. Should This Opportunity Be Taken to Reform the Third Parties (Rights Against Insurers) Act 1930 and the Married Women's Property Act 1882?

12.18 Two statutory exceptions to the third party rule are the Third Parties (Rights Against Insurers) Act 1930 ("the Third Parties Act") and the Married Women's Property Act 1882 ("the MWPA 1882"). In the Consultation Paper, views were specifically sought as to whether those two Acts should be reformed. (25)

(1) Third Parties (Rights Against Insurers) Act 1930

12.19 The operation of the Third Parties Act (26) has been the subject of criticism for some time and a number of consultees argued that it needed amendment. One problem, for example, is that third parties cannot prevent the insurer and insured compromising the insured's claim to the detriment of the third party's, even though both may be well aware of his claims. Similarly, since the rights which the Act confers on third parties are only those which the insured would have enjoyed, an obligation to "pay to be paid" will frustrate the right of the third party where the insured has become insolvent and therefore failed to pay. Again, a provision which renders the benefit under the insurance contract subject to a discretion on the part of the company to pay (27) may lead to the conclusion that since the insured had no "right" to an indemnity, the third party can have no such right transferred to it in the event of the assured's insolvency. The assured will have no right against the insurer until judgment is obtained by the third party.

12.20 We consider that the issues involved in a reform of the 1930 Act are different than those involved in any general reform of the third party rule. They involve a balancing of rights between insurance companies, insolvent insureds and third party claimants which we cannot properly address in this project. Nevertheless, the response of consultees confirms that the operation of the Third Parties Act should be looked at in the near future. We have therefore pressed for a separate Law Commission project to be undertaken on the Third Parties Act and we are delighted that this project was approved (in June 1995) as an item on the Law Commission's Sixth Programme of Law Reform. (28)

(2) Married Women's Property Act 1882

12.22 In the Consultation Paper, (29) views were invited on the proposal of the Law Revision Committee that section 11 of the MWPA 1882 should be extended to all life, endowment and education policies in which a particular beneficiary is named. (30) Section 11 of the 1882 Act presently provides that where a person takes out a policy of insurance on his or her own life expressed to be for the benefit of his or her spouse and/or children, a trust is created in favour of those purported beneficiaries. Consultees who addressed this issue were in favour of the proposed extension of the 1882 Act, and some suggested further extensions, such as enacting a provision similar to section 48 of the Australian Insurance Contracts Act 1984.

12.23 It is instructive to begin by considering the Australian provision. Section 48 permits a person who is not a party to a contract of insurance, but who is "specified or referred to in the contract... as a person to whom the insurance cover provided by the contract extends", to recover the amount of his or her loss from the insurer in accordance with the contract. (31) Thus, for example, the Australian legislation would permit the subsidiary of an assured company to bring a direct right of action against an insurer, where the policy was expressed to indemnify "the assured, all subsidiary, associated and related companies, all contractors, sub-contractors and suppliers" against a specified liability to another party, although the subsidiary company would not be in privity of contract with the insurer. (32) Similarly, it would permit an employee who was specified as an insured under a corporate health insurance programme taken out by his or her employer to maintain a direct action against the insurance company. (33)

12.24 In respect of many insurance contracts, our reforms will have much the same effect as is achieved by the Australian Act. In particular, a liability insurance policy where an insurer is to indemnify specified third parties against legal liability will be enforceable under our reforms (whether under the first or second limb of the test of enforceability). Similarly most medical expenses insurance policies, taken out on behalf of employees, will be enforceable by employees under our reforms. The differences relate to the fact that the third party's right is more secure and automatic under the 1984 Act than under our reforms. In particular, our reforms leave open the possibility that even though a third party is expressed to be covered by the policy the contracting parties may intend that only the promisee and not that third party should have the right of enforcement. So, for example, some standard group personal accident insurance policies may fall outside our reform whereas they would fall within the 1984 Act. It would also appear that, once made, an insurance contract in Australia cannot be varied or cancelled by the original contracting parties: under our reforms variation or cancellation is possible before reliance or acceptance by the third party.

12.25 Accepting then, that the Insurance Contracts Act 1984, section 48, goes beyond our general reform, we face the question as to whether we should recommend an equivalent reform in this country. We have found this difficult. On the one hand, the Australian provision may be thought to reflect the expectations of assureds and third parties to whom the insurance is expressed to extend that such policies are enforceable by the third parties. It may also be argued that it reflects the standard good practice of insurers and assureds in ensuring that such third parties are paid. On the other hand, it is not obvious why the intentions of an assured and insurer to give the assured alone the right to enforce the policy should be overridden. It is also not obvious to us that the contracting parties should have no right to vary or cancel the contract prior to reliance or acceptance by the third party. Furthermore we are somewhat concerned that we did not put out to consultation the possibility of such a provision and we have therefore not had the benefit of a wide-range of views in relation to such a proposal. We note in this respect that the Australian legislation was introduced as a result of a specific review of the law governing insurance contracts by the Law Reform Commission of Australia. (34) One can add that there may be something to be gained by assessing the impact in practice of our general reform of privity before deciding whether such an "industry-specific" reform is required. On balance, therefore, we have decided that it would be inappropriate in this project to recommend following Australia in affording automatic rights to third parties covered by insurance.

12.26 We also consider that it would not be sensible in this project to recommend the extension of the Married Women's Property Act 1882 in the manner proposed by the Law Revision Committee. In particular it is far from clear why a "trust" solution is more appropriate than one permitting variation or cancellation of the contract by the contracting parties prior to crystallisation of the third party's rights. It is also not clear what precisely the Law Revision Committee meant when using the term "endowment and education policies". Moreover, to extend the 1882 Act would, ideally, require more than its mere amendment and would instead require its repeal and replacement. This is because the Law Revision Committee's suggested amendment would take one outside the purpose of the Act which, in the long title, is specified as being "to consolidate and amend the Acts relating to the Property of Married Women". Again we consider that it would be preferable to wait to see how far our general reforms overcome perceived problems caused by the privity doctrine in relation to insurance contracts before giving non-parties to insurance contracts automatic rights of enforceability. And viewed against the wider Australian reform, we would be concerned that the Law Revision Committee's recommendations may be justifiably criticised as being an outdated and inadequate "half-way house".

Footnotes to Part XII

(3)For example, the scope of the tort of negligence for pure economic loss has ?ebbed and flowed' over the last twenty years. See paras 1.4, 2.14 and 3.14 above.

(6)[1995] 2 AC 145. See generally, A Burrows, "Solving the Problem of Concurrent Liability" (1995) 48(2) CLP 103.

(7)7 However, the very existence of a right of enforceability under another statute may sometimes mean that, as regards the second limb of our proposed test of enforceability, the parties do not have an intention to confer rights on a third party other than under the other statute. One should also note that some restrictions on a third party's right (eg monetary or time limits) under another statute would also operate as restrictions under our Act by reason of our proposals on defences or remedies (see recommendation 2 in Part III above, and recommendations 21 and 23 in Part X above).

(8)But the objection of creating uncertainty, if thought a problem, could be solved by confining the operation of our reform in respect of certain types of contract to the first limb of the test of enforceability.

(9)Carriage of Goods by Sea Act 1992, s 2(1), "... a person who becomes - (a) the lawful holder of a bill of lading; (b) the person who ... is the person to whom delivery of the goods to which a sea waybill relates is to be made by the carrier in accordance with that contract; or (c) the person to whom delivery of the goods to which a ship's delivery order relates is to be made in accordance with the undertaking contained in the order, shall (by virtue of becoming the holder of the bill or, as the case may be, the person to whom delivery is to be made) have transferred to and vested in him all rights of suit under the contract of carriage as if he had been a party to that contract"; s 3(1), "Where ... the person in whom rights are vested [by virtue of the foregoing] - (a) takes or demands delivery from the carrier of any of the goods to which the document relates; (b) makes a claim under the contract of carriage against the carrier in respect of any of those goods; or (c) is a person who, at a time before those rights were vested in him, took or demanded delivery from the carrier of any of those goods, that person shall (by virtue of taking or demanding delivery or making the claim or, in a case falling within paragraph (c) above, of having the rights vested in him) become subject to the same liabilities under that contract as if he had been a party to that contract".

(10)We are not convinced, however, that such a third party could so outflank the 1992 Act by suing under our proposed Act. As regards the promisee's rights, the effect of the 1992 Act would surely be that under clause 4 of our draft Bill (implementing recommendation 27) the promisee would have no greater right to enforce the contract under our proposals than under the 1992 Act. And where another statute automatically attaches burdens to the third party's rights, nothing in our proposed Act removes those burdens.

(11)Rights of Suit in Respect of Carriage of Goods By Sea (1991) Law Com No 196; Scot Law Com No 130, para 5.2.

(12)A "contract of carriage", for the purposes of the 1992 Act, is defined in s 5(1) of the Act.

(14)14Although the international carriage of passengers and their baggage is also governed by international conventions, it will be rare for a third party who has been injured or whose baggage has been lost or damaged to assert rights under our proposed Act (rather than, eg, in tort) and, even if he or she does, we do not think that this would clash with the policy of the conventions. We therefore confine ourselves to considering the carriage of goods and cargo.

(15)15International carriage of goods by road is governed by the Geneva Convention on the Contract for the International Carriage of Goods by Road 1956 (CMR) given statutory force by the Carriage of Goods by Road Act 1965, as amended by the Carriage by Air and Road Act 1979. International carriage of goods by rail is governed by Appendix B (CIM) of the Berne Convention concerning International Carriage by Rail 1980 (COTIF) given statutory force by the International Transport Conventions Act 1983. International carriage of cargo by air is governed by the Warsaw Convention 1929, as amended by the Hague Protocol 1955, and by the Guadalajara Convention 1961 (dealing with the rights and liabilities of the "actual carrier") given statutory force by the Carriage by Air Act 1961 and by the Carriage by Air (Supplementary Provisions) Act 1962. Also relevant is Part B of Schedule 2 to the Carriage by Air (Application of Provisions) Order 1967, SI 1967 No 480 made under s 10 of the Carriage by Air Act 1961, which sets out (with amendments) the original Warsaw Convention and the Guadalajara Convention: by reason of article 5 of the 1967 Order those Conventions continue to apply in respect of international carriage that is not subject to the amended Warsaw Convention (presumably because the place of departure or destination of the carriage by air is within a State which ratified the Warsaw Convention in 1929 but did not ratify the Hague Protocol in 1955). The Montreal Protocol 1975, amending the Warsaw Convention, has been given statutory force by the Carriage of Goods by Air and Road Act 1979 but the relevant provisions of that Act are not yet in force.

(16)See, eg, Article 14 of the Warsaw Convention 1929, as amended by The Hague Protocol 1955, given statutory force by the Carriage by Air Act 1961; Article 13(2) of the Geneva Convention on the Contract for the International Carriage of Goods by Road 1956 (CMR) given statutory force by the Carriage of Goods by Road Act 1965; Article 28(1) of Appendix B (CIM) the Berne Convention concerning International Carriage by Rail 1980 (COTIF) given statutory force by the International Transport Conventions Act 1983.

(17)But as we point out in para 12.8, note 10, above where another statute automatically attaches burdens to the third party's rights, nothing in our proposed Act removes those burdens.

(18)18"[I]t is widely assumed that the CMR contains no general or definitive rule governing the identity of the person or persons entitled to sue the carrier". M Clarke, International Carriage of Goods by Road: CMR (2nd ed, 1991) p 178 and, generally, pp 178-198. This is also the position under the Warsaw Convention Art 24(1) if Gatewhite v Iberia Airlines [1990] 1 QB 326 is correct. The ambiguity is removed by Art 24 Montreal Protocol 1975, which will be given statutory force by the Carriage by Air and Road Act 1979 (relevant provisions not yet in force). See, generally, D Glass and C Cashmore, Introduction to the Law of Carriage of Goods (1989) para 3.32 (road), para 4.20 (rail), paras 6.33 and 6.36 (air); Chitty on Contracts (27th ed, 1994) para 34-052 (air), para 35-114 (rail), paras 35-150 to 35-151 (road).

(19)19Although less clear, see also Arts 12(4), 13 and 14 of the Warsaw Convention on carriage by air.

(20)Although there are some provisions dealing with carriage of goods by more than one mode of transport (see, eg, Art 2(1) of CMR and Art 31 of the Warsaw Convention) we are aware that there can be difficulties in deciding on the extent to which, if at all, the international conventions (and the Carriage of Goods by Sea Act 1992) apply to the "multimodal" carriage of goods. Insofar as none of the relevant international conventions applies to the contract of carriage in question, and nor does the Carriage of Goods by Sea Act 1992, we see no objection to a third party who can satisfy the test of enforceability being given rights under our proposed Act.

(21)21Although the road and rail conventions already appear to protect even independent contractors engaged by the carrier to perform the carriage : see Arts 3 and 28 of CMR ; Arts 50-51 of COTIF (CIM). For a useful discussion of Art 28 of CMR, see Hill and Messent, CMR: Contracts for the International Carriage of Goods by Road (1984) pp 149-152. In contrast, Art 25A of the Warsaw Convention (like the Hague-Visby Rules, see para 2.22, note 79, above) refers only to servants and agents. It should be emphasised that specific restrictions in the conventions on the rights of servants, agents or other third parties to rely on exclusions (in particular where the loss or damage has been caused by wilful misconduct) could not be outflanked by the third party relying on our Act because of recommendation 25 and draft bill clause 3(6).

(22)22The reference in clause 6(3)(b)(iii) of our draft Bill to "the Convention which has force of law in the United Kingdom by virtue of section 1 of the Carriage of Air Act 1961" is sufficiently wide to include - and we intend should be read as including - the carriage of cargo by air provisions of the Carriage by Air and Road Act 1979 as and when those provisions are brought into force. The 1979 Act is concerned to amend the Carriage by Air Act 1961 and to give force of law in the United Kingdom to the Montreal Protocol, amending the Warsaw Convention.

(23)Those negotiable instruments falling outside the Bills of Exchange Act 1882 (eg, Eurodollar bonds, negotiable certificates of deposit, floating rate notes) are enforceable by third parties who are analogous to those with rights of enforceability under the Act. It would contradict commercial understanding and practice if our proposed Act were to treat differently negotiable instruments falling with the 1882 Act and those falling outside the 1882 Act. See R Goode, Commercial Law (2nd ed, 1995) pp 519-520, 627-631.

(24)Although the objection of uncertainty, if thought a problem, could be solved by confining the operation of our reform to the first limb of the test of enforceability: see para 12.6, note 8, above.

(26)See, eg, Firma C-Trade SA v Newcastle Protection and Indemnity Association; Socony Mobil Oil Inc v West of England Shipowners Mutual Insurance Association (London) Ltd (The "Fanti" and The "Padre Island") (No 1) [1991] 2 AC 1 (HL); Post Office v Norwich Union Fire Insurance Society Ltd [1967] 2 QB 363; CVG Siderurgicia del Orinoco SA v London Steamship Owners' Mutual Insurance Association Ltd [1979] 1 Lloyd's Rep 557; Bradley v Eagle Star Insurance Co Ltd [1989] AC 957; Normid Housing Association Ltd v Ralphs and Mansell and Assicurazioni Generali [1989] 1 Lloyd's Rep 265; Nigel Upchurch Associates v Aldridge Estates Investments Co Ltd [1993] 1 Lloyd's Rep 535; Woolwich Building Society v Taylor, The Times, 17 May 1994; Cox v Bankside Members Agency Ltd [1995] 2 Lloyd's Rep 437.

(27)As is the case under the Rules of many shipowners' Protection & Indemnity Associations for certain types of benefits.

(28)See Law Commission Sixth Programme of Law Reform (1995), Law Com No 234, Item 10.

(30)30Law Revision Committee, Sixth Interim Report, para 49. See para 4.3 above.

(31)Section 48 is set out in Appendix B below. Note that s 48 does not subsume the issue dealt with in England by the Third Parties (Rights Against Insurers) Act 1930. The Third Parties Act 1930 applies so as to permit a person who obtains a judgment or award against another person (who is insured against that claim but is insolvent) to enforce the judgment or award directly against the insurer. In contrast the Australian legislation would apply generally to permit a person who is specified or referred to in a contract of insurance as a potential beneficiary of that contract to bring a direct claim against the insurer.

(32)Cf Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107. See paras 2.67-2.69 above.

(34)Australian Law Reform Commission, Insurance Contracts, Report No 20, 1982.

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The Law Commission

1. Preserving Existing Exceptions

(1) Contracts for the Carriage of Goods by Sea

(1) Third Parties (Rights Against Insurers) Act 1930

(2) Married Women's Property Act 1882

Footnotes to Part XII