Arbitration time limits in the Court of Appeal

A claimant relying on the Third Party (Rights Against Insurers) Act 1930 to enforce a judgment obtained against an insolvent insured can be in no better position against insurers than the insured would have been. In William McIlroy (Swindon) Ltd v Quinn Insurance Ltd [2011] EWCA Civ 825 the Court of Appeal reversed a first instance decision which had the result that the insured lost his rights against insurers before the third party claimants’ causes of action had even accrued. The case is analysed by Fiona Sinclair of 4 New Square.

The arbitration clause in the policy

Lenihan, a building contractor, took out public liability insurance with Quinn for 12 months from 21 July 2004, with two subsequent renewals. An arbitration clause in the policy (General Condition 16) provided that any dispute between Lenihan and Quinn as to Quinn’s liability in respect of a claim under the policy was to be referred to arbitration within nine months of the dispute arising and, if it the dispute was not referred to arbitration within that period, the claim was deemed to have been abandoned.