The British Insurance Law Association (Bila) has renewed its push for the modernisation of the Third Parties (Rights Against Insurers) Act 1930.
The Act allows third parties to claim damages directly from the insured's insurer, should the insured become insolvent.
But it requires the liability to be established before the third party is allowed information on the insured's insurance, which means pointless legal actions are taken, only to find there is no appropriate cover in any event.
A proposed Bill would correct these and other problems and erode many of the defences insurers used to avoid paying out these claims, such as breach of condition and pay-to-be-paid.
In a lecture at Lloyd's, insurance barrister Alison Green said the review and Bill had been passed to the Lord Chancellor, but were not on the legislative timetable this year.
However, she said lawyers and insurers were keen to see the Bill implemented and hoped Attorney General Peter Goldsmith would champion it.
"There are a lot of practical problems [the Act ] can cause for many of the insurers I act for," Green said.
The Law Commission encouraged Bila to hold the lecture, to ensure continued interest in the Act's modernisation.