TORT VICTIM’S ABILITY TO PROFIT FROM THE PROCEEDS OF INSOLVENT TORTFEASOR’S LIABILITY INSURANCE

I Ketut Dharma Putra Yoga,Yasser Mandela

doi:10.26623/jic.v5i1.1954

Abstract

This article describes and examines whether the tort victim can profit from the proceeds of the tortfeasor’s liability insurance. This article aims to reflect on which approach, either in common or civil law, provides more access for the tort victim to profits from the proceeds of insolvent tortfeasor’s liability insurance policy. The method used in this research is comparative research. The result of this research showed that the status of insurance proceeds becomes debatable because the tort victim (as the claimant) will have no better rights than any other unsecured creditors during insolvency proceedings. This is regardless of the fact that the tortfeasor already got a fund, albeit indirectly through the insurer, to compensate the tort victim’s losses. In relation to this issue, the United Kingdom has adopted the Third Parties (Rights against Insurers) Act 2010 which gives right for tort victim to directly claim for compensation against tortfeasor’s liability insurer in the event of tortfeasor’s insolvency. Meanwhile, the Indonesian legal system provides no clear legal protection to the tort victim. Thus, in the event of insolvency, the tort victim cannot obtain compensation from the insurer, but only from tortfeasor’s bankruptcy estate as part of creditors’ debts. Furthermore, as an unsecured creditor, the tort victim will obtain the debtor’s bankruptcy estate after all secured creditors have received their payment.

Highlights

If the insured committed a tortious act, he can turn to his liability insurer to indemnify the losses of the tort victim, or in other words, the tort victim can profit from the liability insurance proceeds payable from the policy
Liability Insurance and its relation with Tort Victim (i) Liability Insurance Nowadays, the insurance market has grown a lot that almost every risk in our life can be protected with insurance coverage
Based on the foregoing, in reality their relation is closely connected, we found that theoretically there is no legal relation between tort victim and liability insurance

Summary

Introduction

A problem arises when the insured becomes insolvent before compensating for the tort victim’s losses. In such an event, the status of insurance proceeds becomes debatable because, for example in the common law, the tort victim (as the claimant) will have no better rights than any other unsecured creditors. The status of insurance proceeds becomes debatable because, for example in the common law, the tort victim (as the claimant) will have no better rights than any other unsecured creditors This is regardless of the fact that the insured/tortfeasor already got a fund, albeit indirectly through the insurer, to compensate for the tort victim’s losses.

Objectives

Results

Conclusion