{"id":"nsw:act-2017-019","name":"Civil Liability (Third Party Claims Against Insurers) Act 2017","slug":"civil-liability-third-party-claims-against-insurers-act-2017","collection":"act","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"19 of 2017","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":29259,"registerId":"nsw-act-2017-019-current","compilationNumber":null,"startDate":"2026-04-01","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Name of Act","content":"#### 1 Name of Act\n\n1 Name of Act\n\n> This Act is the [Civil Liability (Third Party Claims Against Insurers) Act 2017](/view/html/inforce/current/act-2017-019).","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n2 Commencement\n\n> This Act commences on the date of assent to this Act.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Definitions","content":"#### 3 Definitions\n\n3 Definitions\n\n> > (1) In this Act:\n> > \n> > claimant—see section 4.\n> > \n> > court means a court or tribunal of New South Wales.\n> > \n> > insured liability means a liability in respect of which an insured person is entitled to be indemnified by the insurer.\n> > \n> > insured person means a person who is, in respect of a liability to a third party, entitled to indemnity pursuant to the terms of a contract of insurance, and includes a person who is not a party to the contract of insurance but is specified or referred to in the contract, whether by name or otherwise, as a person to whom the benefit of the insurance cover provided by the contract extends.\n> > \n> > liability means a liability to pay damages, compensation or costs.\n> > \n> > Note—\n> > \n> > The [Interpretation Act 1987](/view/html/inforce/current/act-1987-015) contains definitions and other provisions that affect the interpretation and application of this Act.\n> \n> > (2) Notes included in this Act do not form part of this Act.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Claimant may recover from insurer in certain circumstances","content":"#### 4 Claimant may recover from insurer in certain circumstances\n\n4 Claimant may recover from insurer in certain circumstances\n\n> > (1) If an insured person has an insured liability to a person (the claimant), the claimant may, subject to this Act, recover the amount of the insured liability from the insurer in proceedings before a court.\n> \n> > (2) The amount of the insured liability is the amount of indemnity (if any) payable pursuant to the terms of the contract of insurance in respect of the insured person’s liability to the claimant.\n> \n> > (3) In proceedings brought by a claimant against an insurer under this section, the insurer stands in the place of the insured person as if the proceedings were proceedings to recover damages, compensation or costs from the insured person. Accordingly (but subject to this Act), the parties have the same rights and liabilities, and the court has the same powers, as if the proceedings were proceedings brought against the insured person.\n> \n> > (4) This section does not entitle a claimant to recover any amount from a re-insurer under a contract or arrangement for re-insurance.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Leave to proceed","content":"#### 5 Leave to proceed\n\n5 Leave to proceed\n\n> > (1) Proceedings may not be brought, or continued, against an insurer under section 4 except by leave of the court in which the proceedings are to be, or have been, commenced.\n> \n> > (2) An application for leave may be made before or after proceedings under section 4 have been commenced.\n> \n> > (3) Subject to subsection (4), the court may grant or refuse the claimant’s application for leave.\n> \n> > (4) Leave must be refused if the insurer can establish that it is entitled to disclaim liability under the contract of insurance or under any Act or law.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Time for commencing proceedings","content":"#### 6 Time for commencing proceedings\n\n6 Time for commencing proceedings\n\n> > (1) Proceedings to recover an amount from the insurer under section 4 must be commenced within the same limitation period that applies under the [Limitation Act 1969](/view/html/inforce/current/act-1969-031) or other Act to the claimant’s cause of action against the insured person in respect of the insured liability.\n> \n> > (2) Subsection (1) does not apply if the claimant has brought proceedings against the insured person in respect of the insured liability before the expiry of the limitation period applying to those proceedings, including any extension of the limitation period granted under the [Limitation Act 1969](/view/html/inforce/current/act-1969-031) or other Act by a court.","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Matters on which insurer may rely","content":"#### 7 Matters on which insurer may rely\n\n7 Matters on which insurer may rely\n\n> In proceedings brought under section 4, the insurer is entitled to rely on any defence or any other matter in answer to the claim or in reduction of its liability to the claimant:\n> \n> > (a) that the insurer would have been entitled to rely on in a claim made by the insured person under the contract of insurance, or\n> \n> > (b) that the insured person would have been entitled to rely on in proceedings brought by the claimant against the insured person in respect of the insured liability.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Judgment against insured person no bar to claim against insurer","content":"#### 8 Judgment against insured person no bar to claim against insurer\n\n8 Judgment against insured person no bar to claim against insurer\n\n> A judgment or order for damages, compensation or costs in favour of the claimant against the insured person in respect of an insured liability does not prevent the claimant from recovering an amount for the damages, compensation or costs under section 4, except to the extent that the judgment or order has been satisfied.","sortOrder":7},{"sectionNumber":"9","sectionType":"section","heading":"Discharge of insurer’s liability","content":"#### 9 Discharge of insurer’s liability\n\n9 Discharge of insurer’s liability\n\n> Any payment made by the insurer to the claimant under this Act in respect of an insured liability discharges, to the extent of the payment, the liability of the insurer to make a payment to the insured person under the contract of insurance in respect of the insured liability.","sortOrder":8},{"sectionNumber":"10","sectionType":"section","heading":"Effect of payments made by insurer to insured person","content":"#### 10 Effect of payments made by insurer to insured person\n\n10 Effect of payments made by insurer to insured person\n\n> An insurer’s liability to a claimant under this Act is not reduced, discharged or otherwise affected by:\n> \n> > (a) any compromise or settlement between the insurer and the insured person in respect of the insured liability, or\n> \n> > (b) any payment by the insurer to the insured person in respect of the insured liability unless and to the extent that the amount of the payment is or has been paid by the insured person to the claimant in respect of the insured liability.","sortOrder":9},{"sectionNumber":"11","sectionType":"section","heading":"Application of Act","content":"#### 11 Application of Act\n\n11 Application of Act\n\n> The rights conferred on claimants under this Act do not affect, and are in addition to, the rights conferred under the [Workers Compensation Act 1987](/view/html/inforce/current/act-1987-070) or any other law on a person who is not a party to a contract of insurance to make a claim against an insurer in respect of an insured liability.","sortOrder":10},{"sectionNumber":"12","sectionType":"section","heading":"Preservation of existing proceedings","content":"#### 12 Preservation of existing proceedings\n\n12 Preservation of existing proceedings\n\n> Section 6 of the [Law Reform (Miscellaneous Provisions) Act 1946](/view/html/inforce/current/act-1946-033) (as in force immediately before its repeal by this Act) continues to apply to actions brought against insurers under that section before the commencement of this Act as if that section had not been repealed.","sortOrder":11},{"sectionNumber":"Schedule 1","sectionType":"schedule","heading":null,"content":"# Schedule 1\n\nSchedule 1 (Repealed)\n\n**sch 1:** Rep 1987 No 15, sec 30C.","sortOrder":12}],"analysis":{"issue_detection":{"absurdities":[],"contradictions":[]},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The legislation maintains its original narrow purpose: providing a statutory mechanism for direct recovery from insurers by third-party claimants. It replaces the previous section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 without expanding beyond the original scope of third-party insurance claims. The preservation clause (section 12) and non-derogation clause (section 11) confirm the Act is intended to operate within existing insurance law frameworks rather than create new substantive rights beyond direct access."},"complexity_factors":["Short statute: only 12 operative sections plus a repealed schedule","Minimal defined terms: only 5 specific definitions in section 3, plus standard interpretation Act incorporation","Straightforward conditional structure: single gateway requirement (court leave under section 5) with one mandatory exception (disclaimer of liability)","Limited cross-referencing: only references to Limitation Act 1969, Workers Compensation Act 1987, and Interpretation Act 1987","No nested exceptions or complex deeming provisions","Clear sequential operation: sections 4-10 follow logical claim progression from entitlement → procedure → defences → discharge"],"plain_english_summary":"**What this law does:**\n\nThis Act allows someone who is owed money by an insured person (the \"claimant\") to sue the insurer directly for payment, rather than having to chase the insured person who might be broke or have disappeared.\n\n**Who it affects:**\n\n- **Claimants**: People or businesses who have won a court judgment or have a legal claim for damages, compensation, or costs against someone with insurance.\n- **Insured persons**: People or entities who have insurance coverage (like public liability or professional indemnity insurance).\n- **Insurers**: Insurance companies that provide coverage.\n\n**How it works:**\n\n- Normally, if someone damages your property or injures you and they have insurance, you sue them personally, and *they* claim from their insurer. This Act lets you skip the middleman and go straight to the insurer **if** the court gives permission (\"leave\").\n- The insurer can defend the claim using any arguments they could have used against their own customer (the insured person) or that the insured person could have used against you.\n- **Important limits:**\n  - You can't use this against re-insurers (companies that insure the insurers).\n  - The court **must** refuse permission if the insurer can prove they don't actually have to pay under the policy terms or law (for example, if the policy was void or the claim is excluded).\n  - You must start your claim against the insurer within the same time limits that apply to suing the original person.\n\n**Why it matters:**\n\nThis prevents the unfair situation where someone wins a court case against an insured defendant, but can't collect because the defendant has no assets—meanwhile the insurer sits on the money. It ensures insurance actually protects injured parties, not just the person who caused the harm. It replaces and modernises an older law (Section 6 of the 1946 Law Reform Act)."},"summary":{"complexity_score":5,"scope_assessment":{"changed":false,"description":"Based on the available information, the Act appears to remain focused on its original stated purpose: enabling third parties to claim directly against insurers in civil liability contexts. No amendments have been made since it came into force on 2 June 2017, suggesting the scope has remained consistent with the original legislative intent."},"complexity_factors":["Involves interaction between civil liability law and insurance law — two distinct legal frameworks","Requires understanding of subrogation and indemnity concepts (legal ideas about who ultimately bears a loss)","The practical application depends heavily on the terms of the underlying insurance policy, which varies case by case","Procedural rules about when and how a direct claim can be made add complexity","Interaction with insolvency law (what happens when the insured person is bankrupt or a wound-up company) creates additional legal layers","Limited legislative text was available for review — full complexity of operative provisions could not be assessed from the document provided"],"plain_english_summary":"## Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW)\n\n**What does this law do?**\n\nThis NSW Act allows people who have been injured or harmed by someone else (the \"third party\") to make a claim **directly against that person's insurer** — rather than having to sue the person who caused the harm first, and then chasing the insurer separately.\n\n**Who does it affect?**\n\n- **Injured people or those owed compensation:** If someone who owes you money (for example, because they injured you or damaged your property) has an insurance policy that covers the claim, you can go straight to their insurer to recover what you're owed.\n- **Insurers:** Insurance companies can be brought directly into legal proceedings by claimants, rather than sitting behind the scenes.\n- **Insured persons (people with insurance policies):** Their insurer can be sued directly in relation to claims against them.\n\n**Why does it matter?**\n\nBefore laws like this, if the person who harmed you went bankrupt or disappeared, your compensation claim could become worthless — even if they had insurance. This Act cuts through that problem by letting you deal directly with the insurer. It's particularly relevant in situations like:\n- A contractor who injures someone and then winds up their business\n- A person who causes damage but has no assets to pay a court judgment\n\n**Important limitation:** This Act only applies in **New South Wales**, and only where the person who harmed you has a relevant liability insurance policy (insurance that covers them for causing harm to others).\n\n**In plain terms:** This law is a practical tool that stops injured people from being left empty-handed just because the person who hurt them can't pay — as long as that person had insurance."},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":true,"description":"This Act creates a statutory cause of action allowing third‑party claimants to recover insured liabilities directly from insurers and treats insurers as standing in the insured person’s place for those proceedings (s4). It imposes a judicial leave requirement and ties limitation periods to those applicable against insured persons (s5, s6). The Act also preserves claimants’ other statutory rights against insurers (s11) and continues to apply certain existing proceedings begun under the repealed provision as saved (s12). These provisions therefore extend the avenues for recovery against insurers while introducing procedural gates and preserving pre-existing cases."},"complexity_factors":["Creates a new direct right to sue insurers (s4) but subject to a judicial gate (leave) (s5).","Alignment with existing limitation law and an exception for prior proceedings (s6).","Insurer may rely on all the defences it or the insured could have used, producing overlap with insurance contract law and defendant defences (s7).","Interplay between payments to claimants and payments to insureds—distinct rules for discharge and non‑reduction (s9, s10).","Interaction with other statutory claim rights (e.g. workers compensation) and preservation of existing proceedings under prior law (s11, s12).","Multiple procedural thresholds (leave, limitation period, possible disclaimers) that affect practical litigation strategy (s5, s6, s5(4))."],"plain_english_summary":"What this law does (mechanics)\n\n- Gives a person who is owed damages, compensation or costs (the claimant) the right to sue the insurer of the person who caused the loss (the insured person) for the amount the insurer would have to pay under the insurance contract (s4). The insurer is treated in court as if it were the insured person (s4(3)).\n\n- A claimant cannot proceed against an insurer without the court’s permission (leave). The court decides whether to grant leave, and must refuse leave if the insurer can show it is entitled to disclaim liability under the insurance contract or some law (s5(1)–(4)).\n\n- Time limits for suing an insurer follow the same limitation period that would apply if the claimant sued the insured person (s6). An exception preserves a claimant’s right to proceed against the insurer if the claimant already sued the insured before the limitation period expired (s6(2)).\n\n- In a claim against an insurer, the insurer can raise any defence it could have used if the insured had sued it under the policy or if the claimant had sued the insured (s7).\n\n- A judgment or order against the insured does not stop the claimant suing the insurer unless the judgment has been satisfied (s8).\n\n- If the insurer pays the claimant under this Act, that payment discharges the insurer’s obligation to the insured for the same amount (s9). Conversely, payments the insurer has already made to the insured do not reduce the insurer’s liability to the claimant unless the insured has actually paid that money on to the claimant (s10).\n\n- The rights created by this Act sit alongside any other statutory or legal rights a non-contracted person may have to claim against an insurer (for example, rights under the Workers Compensation Act 1987) (s11).\n\n- Proceedings that were already brought under the old law continue to be governed by the old provision as saved by this Act (s12).\n\nWho pays, who decides, and what must people do\n\n- Who pays: the insurer pays the claimant to the extent of the insurer’s indemnity under the insurance contract (s4(2), s9).\n\n- Who decides: a court must grant leave before a claimant can sue an insurer, and the court applies the same powers it would apply if the suit were against the insured (s5(1)–(3), s4(3)).\n\n- What claimants must do: obtain leave from the court and start proceedings within the same limitation period that would apply against the insured (s5, s6).\n\nIncentives, compliance burdens and trade-offs (concrete mechanisms)\n\n- Incentives for insurers: because claimants can approach insurers directly, insurers face direct exposure to claims for indemnity and therefore may have incentives to assert policy exclusions, disclaimers or other policy defences to defeat or limit a claimant’s case. The Act explicitly allows the insurer to rely on those defences (s5(4), s7).\n\n- Incentives for claimants: claimants gain an additional route to recovery by suing the insurer directly (s4). But they must first obtain leave (s5), which adds a procedural gate and associated legal cost.\n\n- Compliance burdens: claimants must comply with limitation periods that mirror actions against insured persons (s6), and must seek leave from a court (s5). Insurers must track and, where relevant, assert disclaimers or other defences to avoid leave being granted (s5(4), s7). Courts must assess leave applications and apply the same powers as if the claim were against the insured (s5, s4(3)).\n\n- Duplication and recovery risk: the Act prevents double recovery by discharging the insurer’s contractual obligation to the insured to the extent the insurer has paid the claimant (s9). It also preserves a claimant’s separate rights under other laws (s11). A judgment against the insured does not automatically prevent a claim against the insurer unless paid (s8), which keeps open the possibility of sequential or parallel actions until satisfaction occurs.\n\nImplementation risks and opportunity costs\n\n- Administrative and litigation load: courts must process leave applications and potentially adjudicate rights that were previously litigated only against insured parties (s5). That adds an initial procedural step (leave) and may increase judicial workload.\n\n- Strategic behaviour: the combination of the leave gate (s5) and the insurer’s right to rely on contractual or legal disclaimers (s5(4), s7) creates a clear procedural and substantive route for insurers to contest direct claims, which may increase contested pre‑trial litigation.\n\n- Preservation of previous claims: actions already started under the prior provision continue to be governed by that prior law (s12), so practitioners must check which regime applies to any existing matter.\n\nNet effect on private choices and contracts (source‑grounded)\n\n- The Act changes the enforceability environment for insurance contracts by allowing third parties to enforce an insured person’s indemnity directly against the insurer (s4). That change affects who is sued and who bears litigation risk (s4, s9), and gives insurers explicit statutory recourse to the same defences they would have in other related proceedings (s7)."}},"importantCases":[],"_links":{"self":"/api/acts/civil-liability-third-party-claims-against-insurers-act-2017","history":"/api/acts/civil-liability-third-party-claims-against-insurers-act-2017/history","analysis":"/api/acts/civil-liability-third-party-claims-against-insurers-act-2017/analysis","conflicts":"/api/acts/civil-liability-third-party-claims-against-insurers-act-2017/conflicts","importantCases":"/api/acts/civil-liability-third-party-claims-against-insurers-act-2017/important-cases","documents":"/api/acts/civil-liability-third-party-claims-against-insurers-act-2017/documents"}}