Conditions Precedent and Third-Party Rights: Lessons from Archer v R ‘N’ F Catering Ltd and Makin v QBE

Recent judgments in Archer v R ‘N’ F Catering Ltd and Makin v QBE have clarified the limits of third-party rights under the Third Parties (Rights Against Insurers) Act 2010 (“TPRAI Act 2010”) and reinforced the importance of complying with conditions precedent in insurance policies.

Whilst both cases addressed whether a dissolved company was entitled to be indemnified by its insurer in respect of potential liability to the claimant in a personal injury claim, the Court’s findings have a much broader application to the benefits of prompt notification to an insurer for all policyholders.

Makin v QBE [2025] EWHC 895 (KB)

On 6 August 2017, Mr Daniel Makin (“the Claimant”) was ejected from a restaurant in Oldham, after throwing a glass. During an altercation with the door staff, Mr Makin was forced to the ground and held in a headlock. Although he walked away and took a taxi home, his mother found him two days later having suffered a stroke, allegedly caused by the headlock, which led to serious neurological disability.

His claim was initially brought against the restaurant (“the First Defendant”), but later discontinued, and then against Protec Security Group Ltd (the employer of the door staff and “the Second Defendant”). The Second Defendant entered liquidation on the day before the preliminary issue trial, where it was held to be vicariously liable for the Claimant’s injury and resultant stroke.

QBE Insurance (Europe) Limited (“the Third Defendant”) was the Second Defendant’s public liability insurer which was joined to the action pursuant to the Third Parties (Rights against Insurers) Act 2010 (“the Act”) which, it was agreed, enabled the Claimant to bring a claim against the Third Defendant directly. The Third Defendant denied liability to indemnify the Second Defendant, and therefore any liability to the Claimant, on the basis that the Second Defendant had breached the Claims Condition under the Policy. This was a condition precedent to liability requiring the Second Defendant to notify the Third Defendant of any incident which might give rise to a claim and to forward any correspondence relating to or which may give rise to a claim under the Policy.

Claims Conditions

It was agreed that the Claimant’s rights against the Third Defendant were no better than those of the Second Defendant and, therefore, if the Third Defendant had a good defence to a claim for indemnity by the Second Defendant for its liability to the Claimant, then it would equally have a good defence to the Claimant’s claim.

The Court heard argument from the parties as to whether the Second Defendant was in breach of the Claims Conditions under the Policy and whilst the Judge agreed with the Claimant that no reasonable insured could have believed the incident may give rise to a claim in circumstances where the Claimant was able to get up and walk away from the incident, there was nevertheless a “clear point in time” at which the Second Defendant became aware of the potential injury because of the police investigation and receipt of a Letter of Claim, both of which gave rise to an obligation to notify the insurer.

The second issue in contemplation was whether the Third Defendant, in the event of a breach of the Condition, was, in any event, entitled to refuse cover on the basis that it was a condition precedent to liability. The Court agreed with the Third Defendant that there was no ambiguity in the language employed and that even though the Claims Condition was not specifically labelled as a condition precedent its meaning was clear: the clause was a condition precedent to liability such that the Third Defendant was entitled to refuse indemnity under the Policy due to the Second Defendant’s non-compliance with it.

As a result, and despite the Claimant not being responsible for any of the breaches of the Claims Conditions, he was unable to recover any damages from insurers despite life-changing injuries.

Archer v R ‘N’ F Catering Ltd [2025] EWHC 1342 (KB)

Miss Hannah Archer (“the Claimant”) contracted Campylobacter in July 2019 after eating at the First Defendant’s restaurant, resulting in life-altering health consequences. Over the next three years, the Claimant made several attempts to contact the First Defendant, including sending requests for insurance details, claim notification and Letter of Claim. The First Defendant failed to respond or notify its insurer of the potential claim. The Claimant issued her claim on 5 July 2022, and the First Defendant eventually denied liability in December 2022 before entering members’ voluntary liquidation on 14 February 2023.

The First Defendant had an insurance policy with the insurer, Riverstone Insurance (Malta) SE (“the Second Defendant”). The Second Defendant was added to the proceedings in July 2024 but also denied liability based on the First Defendant’s breaches of conditions precedent, including late notification of the claim and a failure to cooperate.

The policy conditions required notification “as soon as reasonably possible” and provision of information “within 30 days”. The insured’s delays in notification ranged from 18 days to 12 months.

Third Party (Rights Against Insurers) Act 2010

The parties agreed that the Policy notification provisions were conditions precedent to the Second Defendant’s liability and the Court found that they had been breached and thus the right to indemnity under the Policy had been extinguished before the First Defendant went into liquidation.

The Claimant, in the alternative, sought to rely on Section 9(2) of the Third Party (Rights Against Insurers) Act 2010 which operates when an insured becomes a ‘relevant person’ within the meaning of the 2010 Act at the point of insolvency. S.9(2) of the Act allows acts by a third-party claimant to be treated as if carried out by the insured, for the purpose of satisfying a policy requirement. The Claimant, therefore, argued that her actions in trying to comply with the Policy conditions should be treated as if actioned by the insured.

The Court’s Decision

The Court held that Section 9(2) did not assist the Claimant as her actions post-liquidation were outside the policy’s specified timeframe, and the Act could not resurrect the right of indemnity that the insured had lost through the First Defendant’s breach of a condition precedent. The Second Defendant was therefore entitled to rely on the First Defendant’s procedural failures to deny indemnity.

Analysis

Makin and Archer highlight a critical vulnerability in the current legal framework for third-party claimants, serving as a timely reminder that procedural compliance and early action are essential to preserving insurance rights. In each case, the Claimant was denied recourse for their loss through no fault of their own, with the insured escaping liability simply by virtue of insolvency.

Archer illustrates a clear limitation of the 2010 Act: whilst it entitles claimants to obtain information about the insurer, there is no guarantee that it will be provided, let alone in time to comply with any policy conditions. The Act cannot cure procedural failures by the insured, and claimants may be better off acting as though it isn’t there. Requesting insurance details as early as possible and seeking evidence from policyholders of notification to those policies is therefore essential in mitigating any delays in complying with notification clauses. Indeed, if a claimant does get hold of insurers’ details there is nothing to stop them notifying insurers of a claim or a matter which may give rise to a claim at the earliest opportunity, adding an extra layer of protection.

For policyholders, these cases are also a reminder to understand and comply with notification obligations. Conditions precedent may not be explicitly labelled and can be easily overlooked, especially given concerns that notification may affect future insurance premiums. But the courts have made it clear that timing is everything, and prompt notification is a price worth paying to preserve indemnity.

Our Insurance Disputes team assists policyholders navigating insurance claims, advising in relation to all aspects of policy coverage and related claims. Our experience, coupled with our strengths in commercial and restructuring work, enables us to assist clients not only in dealing with their disputed claim, but also in coping with cash flow, trade creditors and many other related commercial problems that often arise from the delayed settlement of an insurance claim. If you have any questions about an insurance dispute or claim against a third party, please get in touch with Nicola Maher or any member of the Insurance Disputes team.