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Third Parties: Rationalising a Right to Sue
Published online by Cambridge University Press: 16 January 2009
Extract
In a revolutionary but unsatisfactory recent decision, the High Court of Australia has allowed a third-party beneficiary of an insurance contract a right to sue the promisor. The decision casts doubt upon the whole doctrine of privity and ultimately upon bargain as the theoretical basis of promissory liability. The Trident case is unsatisfactory not because it allowed a third-party beneficiary a cause of action or because it challenges privity and bargain, but because it offers no satisfactory replacement for the theory of bargain. The reasons the court gave for recognising a right to sue are weak and inconsistent with the common law's approach to questions of civil liability. That approach is to give a plaintiff a cause of action against a defendant not solely because of something the defendant has done, but because there is a legally relevant link between what he has done and the plaintiff's condition. That is, the plaintiff must, in order to establish a right, satisfy some criterion for linking the defendant's behaviour to his complaint.
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