Xu and Bryant - The Supreme Court decision

The Supreme Court has issued its decision in Xu v IAG. A split decision with 3 Justices (William Young, O‚ÄôRegan and Ellen France JJ) against the appeal and 2 Glazebrook and Arnold JJ dissenting. My quick reading is that Bryant is still in force, although clarified and somewhat limited. The Majority appear to have been swayed by moral risk arguments that are, in my view over-stated (the learned Paul Michalik advises that 19th century insurers lobbied for and got the right to re-instate precisely to reduce moral hazard - they previously had to make payment to settle the loss). My view remains that the general contract law should apply; any rights that have accrued should be assignable. However, the decision means that;    

  1. if a policy includes a requirement for the insured to reinstate, before indemnity plus rights accrue, then only the bare indemnity rights can be assigned;
  2. if the the policy doesn't make idemnity plus rights contingent on the insured "personally" reinstating, then the rights are assignable.

The decision also corrects the incorrect notion in Bryant and echoed by the Court of Appeal in Xu that there was a general insurance law principle that an indemnity right is intrinsically personal to the insured party. Rather, making an indemnity contingent on the personal actions of an insured, can only occur contractually, through a policy term. 

My personal view is that the dissent analysed the situation correctly, as to when an indemnity plus right accrues. However, the Majority decision is likely to be the last word on this issue.