Even more so when the insurance is said to cover the insured and the subcontractors. Many will assume it to be effective and refrain from taking other cover. That is what happened here. Notwithstanding the caution with which the Court ordinarily reviews earlier authorities, and the operation of long established principle, we conclude that the principled development of the law requires that it be recognised that McNeice was entitled to succeed in the action. The declaration by the Court of Appeal that policies of insurance are a common law exception to the doctrine of privity of contract may come as some surprise to those who have seen no reference to this in the books.
Statutory provisions weaken the argument for a common law exception.
I agree with Dawson J about the limited use of statute in developing the common law. If privity is to be overthrown for contracts of insurance I can see no reason of policy or logic to retain it elsewhere. Privity is well settled by House of Lords, Canada, and here. Leave is needed to re-open an earlier decision of the Court of Appeal to review doctrines suited to an earlier age but which work injustice in contemporary situations. To be exercised sparingly.