Analyses: The Third-Party Plaintiff’s Exceptional Direct Claim against the Insured Defendant’s Liability Insurer: Some Lessons to be Learnt from the Third Parties (Rights Against Insurers) Act 2010 in English Law?

• Jurisdiction: South Africa
• Pages: 608-616
• Author: Wenette Jacobs
• Date: 16 August 2019
• Citation: (2010) 22 SA Merc LJ 608
• Published date: 16 August 2019

The Third-Party Plaintiff’s Exceptional Direct

Claim against the Insured Defendant’s Liability

Insurer: Some Lessons to be Learnt from the

Third Parties (Rights Against Insurers)Act 2010

in English Law?

WENETTE JACOBS

University of South Africa

1 Introduction

As a rule, there is no contractual relationship between the third-party

plaintiff and the insured defendant’s liability insurer. The complex multiple

relationships involved in liability insurance have been discussed in MFB

Reinecke, Schalk van der Merwe, JP van Niekerk & Peter Havenga General

Principles of Insurance Law (2002) (‘Reinecke et al’) in par 582; and JP van

Niekerk ‘Liability Insurance: Successive but Overlapping ‘‘claims-made’’

Policies and a Question of Quantum’ (2006) 18 SA Merc LJ 382 (‘Van

Niekerk Liability Insurance’) at 382-3. And the complexities of the

multi-party relationships in liability insurance with specif‌ic reference to s 156

of the Insolvency Act 24 of 1936 (‘the Insolvency Act 1936’) are dealt with in

JP van Niekerk ‘The Liability Insurer, the Insolvent Insured and Section 156

of the Insolvency Act’ (1999) 11 SA Merc LJ 59 (‘Van Niekerk S 156 of the

Insolvency Act’). (For more details on the application of s 156 in regard to

environmental damage, see AL Stander ‘Skadevergoeding Betaalbaar deur die

Insolvente Versekerde in die Geval van Omgewingsbenadeling’ (2004) 16 SA

Merc LJ 327 (‘Stander’).)

Liability insurance is often referred to as third-party insurance because it

provides cover for the insured’s potential legal liability towards a third party

for the latter’s injury, damage or loss. The insured’s liability for the third

party’s injury, loss or damage is the insured’s loss for the purposes of the

insurance (see Gordon and Getz on The South African Law of Insurance 4ed

(1997) by DM Davis (‘Gordon and Getz’) at 482; JP van Niekerk ‘Truck and

General Insurance v Verulam Fuel Distributors 2007 (2) SA 26 (SCA)’ (2006)

9Juta’s Insurance Law Bulletin 194 at 202; and Wenette Jacobs ‘Liability

Insurance in a Nutshell: Simplif‌ied Complexities or Complex Simplicities?’

(2009) 21 SA Merc LJ 202 at 205).

However, the insurance contract between the liability insurer and the

named insured cannot be construed as a contract in favour of a third party (a

‘third-party contract’; see Reinecke et al op cit in par 582). In a third-party

contract, the third party becomes an additional insured and has a claim against

608

(2010) 22 SA Merc LJ 608

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