(1)Subsection (2) applies where a person brings proceedings for a declaration under section 2(2)(a), or for a declarator under section 3(2)(a), and the proceedings are started or, in Scotland, commenced—
(a)after the expiry of a period of limitation applicable to an action against the insured to enforce the insured's liability, or of a period of prescription applicable to that liability, but
(b)while such an action is in progress.
(2)The insurer may not rely on the expiry of that period as a defence unless the insured is able to rely on it in the action against the insured.
(3)For the purposes of subsection (1), an action is to be treated as no longer in progress if it has been concluded by a judgment or decree, or by an award, even if there is an appeal or a right of appeal.
(4)Where a person who has already established an insured's liability to that person brings proceedings under this Act against the insurer, nothing in this Act is to be read as meaning—
(a)that, for the purposes of the law of limitation in England and Wales, that person's cause of action against the insurer arose otherwise than at the time when that person established the liability of the insured,
(b)that, for the purposes of the law of prescription in Scotland, the obligation in respect of which the proceedings are brought became enforceable against the insurer otherwise than at that time, or
(c)that, for the purposes of the law of limitation in Northern Ireland, that person's cause of action against the insurer arose otherwise than at the time when that person established the liability of the insured.
Commencement Information
I1S. 12 in force at 1.8.2016 by S.I. 2016/550, art. 2