UK Court of Appeal Considers Whether Insurance Proceeds Paid to a Company in Liquidation Are Assets of the Company or Held on Trust for Third-Party Claimants

Michael Fiddy, Stephen Moi, Tom Hunter and Kieran Freear of Mayer Brown analyse the UK Court of Appeal’s decision in Desai v Wood, confirming that insurance proceeds paid to an insured company before insolvency belong to the company’s estate rather than being held on trust for third-party claimants, rejecting arguments for implied contractual terms or constructive trusts and clarifying that rights under the Third Parties (Rights Against Insurers) Act 2010 only transfer upon a qualifying insolvency event.

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