Road Transport Act 1987 · Updated to 15 Oct 2023 · Part IV · Provisions Against Third Party Risks Arising Out of the Use of Motor Vehicles
97. Rights of third parties against insurers
Feedback & supportWhere under any policy issued for the purposes of this Part, a person (hereinafter referred to as “the insured”) is insured against liabilities to third parties which he may incur then—
in the event of the insured becoming bankrupt or making a composition or arrangement with his creditors; or
in the case of the insured being a company, in the event of a winding-up order being made or a resolution for a voluntary winding-up being passed with respect to the company or of a receiver or manager of the company’s business or undertaking being appointed or of possession being taken by or on behalf of the holders of any debentures secured by a floating charge on any property comprised in or subject to the charge, if either before or after that event any such liability as aforesaid is incurred by the insured, his rights against the insurer under the policy in respect of the liability shall, notwithstanding anything in any
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written law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred.
Where an order is made under any written law relating to bankruptcy for the administration in bankruptcy of the estate of a deceased debtor then if any debt provable in bankruptcy is owing by the deceased in respect of a liability against which he was insured under a policy issued for the purposes of this Part as being a liability to a third party, the deceased debtor’s rights against the insurer under the policy in respect of that liability shall, notwithstanding anything in any such law expressed, be transferred to and vest in the person to whom the debt is owing.
bankruptcy
“bankruptcy” includes insolvency as a result of which a wage earner’s administration order has been made under the laws relating to bankruptcy;
Any condition in a policy issued for the purposes of this Part purporting directly or indirectly to avoid the policy or to alter the rights of the party thereunder upon the happening to the insured of any of the events specified in paragraph (1)(a) or (b) or upon the making of an order under any written law relating to bankruptcy in respect of his estate, shall be of no effect.
Upon a transfer of rights under subsection (1) or (2), the insurer shall, subject to the provisions of section 99, be under the same liability to the third party as he would have been under to the insured but—
if the liability of the insurer to the insured exceeds the liability of the insured to the third party, nothing in this
Act shall affect the rights of the insured against the insurer in respect of the excess; and
if the liability of the insurer to the insured is less than the liability of the insured to the third party, nothing in this
Act shall affect the rights of the third party against the insured in respect of the balance.
For the purposes of this section and sections 98 and 99, the expression “liabilities to third parties” in relation to a person insured under any policy of insurance shall not include any liability of that person in the capacity of insurer under some other policy of insurance.
policy of insurance
“policy of insurance” includes a cover note. Motor vehicle users to be insured against third party risks
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road
“road” means— (a) any public road and any other road to which the public has access and includes bridges, tunnels, lay-bys, ferry facilities, interchanges, roundabouts, traffic islands, road dividers, all traffic lanes, acceleration lanes, deceleration lanes, side-tables, median strips, overpasses, underpasses, approaches, entrance and exit ramps, toll plazas, service areas, and other structures and fixtures to fully effect its use; (b) for the purposes of sections 70 and 85, also includes a road under construction; and (c) for the purpose of sections 41, 42, 43, 44, 45 and 45A, also includes a parking place;
This section and sections 98 and 99 shall not apply—
where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company; or
to any case to which subsections 21(1) and (2) of the
Workmen’s Compensation Act 1952 [Act 273], apply.