Scher and Others v Policyholders Protection Board and Others; Ackman and Others v Policyholders Protection Board and Others - House of Lords (Lord Templeman, Lord Griffiths, Lord Ackner, Lord Goff and Lord Mustill) - 22 November 1993

Insurance - Interpretation of Policyholders Protection Act 1975

This case concerned the interpretation of the Policyholders Protection Act 1975 (“the 1975 Act”). The problems arose from the fact that when the liquidation of an insurance company began there were likely to be numerous claims or potential claims under its policies which were in widely differing states of maturity. At one extreme were claims in respect of which the insured person had a complete cause of action which awaited only payment by the company. At the other there were situations where a peril insured against had occurred without the person insured being aware of it. In between there would be many gradations. How far along the road towards complete maturity any individual claim had progressed at any given moment depended not only on the facts of the case, but also on the terms of the policy, and (if it was a liability policy) on the law governing the claim by the third party against the insured.