Victim's direct action against the liability insurer

In a judgment of June 14, 1926, the French Court of Cassation granted the victim a direct action against the wrongdoer's liability insurer. It derived the action from the victim's exclusive right to the indemnity, with no statute behind it. Only with the act of August 1, 2003 did Article L. 124-3 of the Insurance Code put it in writing. The victim sues the insurer directly, without going through the policyholder and without waiting for judgment and payment. Without that right, the money would land in the wrongdoer's estate, within reach of creditors and liquidators, and the victim of an insolvent party would walk away empty-handed although a policy existed. Hence the bar on the insurer: until the injured third party is satisfied, it can pay no one else, and a payment to the policyholder does not discharge it. Then come the defenses. As a rule, Article L. 112-6 lets the insurer raise against the victim whatever it could raise against its policyholder, starting with exclusions and limits. Compulsory lines are the exception: forfeiture and proportional reduction cannot be raised against the injured party there. The insurer pays first and recoups from its policyholder afterward.