Gibraltar Bill offers claimants direct route to insurer

A person owed money by an insolvent Gibraltar defendant will be able to pursue the defendant's insurer directly once the Third Parties (Rights against Insurers) Bill 2026 becomes law.Gibraltarlaws Published as Bill B.32/26 in the Gazette on 12 November 2026, the Bill transfers the insured's rights under the liability policy to the injured third party where the insured is a relevant personGibraltarlaws, so the insurance money no longer falls into the insolvent estate to be shared among general creditorsGibraltarlaws.

The transfer operates automatically by statute. Where a relevant person incurs an insured liability, or a person subject to such a liability becomes a relevant person, that person's rights against the insurer vest in the third party.Gibraltarlaws The third party may issue proceedings to enforce those rights without first having established the insured's liabilityGibraltarlaws, though enforcement still requires the liability's existence and amount to be established by declaration, judgment, arbitration award or enforceable agreement. A dedicated declaration procedure lets the third party resolve the insured's liability and the insurer's potential liability in a single set of proceedings against the insurerGibraltarlaws, with the insured joinable as a defendant, and the insurer keeps any defence the insured could have raised.

Relevant persons span the insolvency spectrum: individuals under administration, enforcement restriction or debt relief orders, individual voluntary arrangements or bankruptcy, and individuals who die insolvent; bodies under section 299 compromises, voluntary arrangements, administration, receivership, provisional or full liquidation, credit-institution insolvency or sectoral administration; and dissolved bodies. Pre-commencement insolvencies and liabilities are covered, with transitional cases reaching back to bankruptcies, compositions, winding-up orders and administrations already in train. The Government may extend or narrow the relevant-person categories by regulations.

Transferred rights carry their limits. Recovery cannot exceed the insured's liability to the third party; anything the third party does that would have satisfied a policy condition counts as done by the insured; information-or-assistance conditions fall away for dead or dissolved insureds while notification-of-claim conditions survive; pay-first clauses are ineffective; and the insurer keeps set-off rights. Schedule 1 gives the third party written-notice rights to insurance information within 28 daysGibraltarlawsGibraltarlaws and, for dissolved bodies, disclosure from former officers, employees and insolvency practitioners. Motor accident claims keep their existing route under the 1986 Act as amended, and liabilities governed by the Merchant Shipping Act regime are carved out. Commencement is by Gazette notice, which may appoint different days for different provisions.

Litigators and officeholders should identify policies early, use the information-notice route within its 28-day cycle, and frame single-forum proceedings that establish liability and insurer exposure together.

Legal basis is the Third Parties (Rights against Insurers) Bill 2026 (B.32/26), on the model of the UK Third Parties (Rights against Insurers) Act 2010.