Declaratory relief

Declarations and time limits under credit policies

It is the right of a contracting party to seek a declaration from the courts as to its present and future rights under the contract. On this basis it is open to an insurer to seek a declaration that it is entitled to avoid a policy or is otherwise not liable under it, and it is equally open to the assured to seek a declaration as to the liability of the insurer in advance of any claim under the policy. In British Credit Trust Holdings v UK Insurance Ltd [2004] 1 All ER (Comm) 444, a credit policy contained a contractual limitation period. The question for Morison J was whether the limitation clause in any way affected the right of the assured to seek a declaration in advance of losses. The case is also of interest in identifying the point at which time begins to run under a credit policy.