Section 12: Limitation and prescription
68.This section sets out rules governing when an action to enforce rights transferred by the Act will be time-barred.
69.Subsections (1) to (3) govern the situation where a third party is already involved in proceedings against the insured and the limitation period or period of prescription governing those proceedings has expired. These subsections ensure that if the third party has issued proceedings against the insured in time, the third party will not be time-barred from issuing fresh proceedings against the insurer for a declaration under section 2(2)(a) (or declarator under section 3(2)(a)).
70.In the absence of these subsections, fresh proceedings against the insurer using the new mechanism in section 2 or 3 would in these circumstances be time-barred. This would not matter if the third party could join the insurer to the existing proceedings against the insured. However, it is likely that this will not be possible under procedural rules which comply with section 35 of the Limitation Act 1980. These subsections therefore ensure that the new mechanism provided by the Act is available to third parties in these circumstances.
71.Subsection (4) applies where the insured’s liability has already been established (see section 1(4)). It ensures that the Act does not alter the date on which the relevant limitation period or period of prescription for proceedings against the insurer starts.
