Abstract:
By statute in the 1930s many Commonwealth jurisdictions gave victims of torts direct rights of access to rights the tortfeasor had under its liability-insurance policies. This legislation has proven somewhat problematic on a number of counts. The legislation’s efficacy turned on the chance that the tortfeasor had insurance; it did not compel insurance to be held in the first place. Its role has become harder to justify as tort liability has expanded in many jurisdictions to embrace purely economic loss. It has not been clear whether the legislation precludes the tortfeasor from calling on the policy to cover the costs of defending the litigation itself, thereby potentially exhausting the limits of the policy before the victim has even proved the elements of the tort. This short article addresses and criticizes the majority decision of the New Zealand Supreme Court in BFSL 2000 Ltd v Steigrad (2013), which gave a positive answer on the last of these questions.
