Only 7 months after the previous judgment on the topic, the United Sections of the Court of Cassation were once again called to deal with the (potential) unfair nature of Claims Made clauses.
By the decision No. 9140, issued in May 2016, the Court had identified two types of Claims Made clauses: the “pure” and the “impure” clauses. According to this categorisation:
- a Claims Made clause is “pure” when the insurance contract covers all the claims made against the Insured during the policy validity period, regardless of the date of the event.
- On the contrary, a Claims Made clause is “impure” when the insurance does not provide for a retroactivity period and coverage is limited to events occurred during the policy validity period.
The “pure” type is not unfair, insofar as it ensures the retroactivity of the insurance coverage. The “impure” clause, instead, can be considered unfair, and consequently declared null and void, because it could cause a considerable imbalance between the contract rights and obligations. Therefore, when dealing with “impure” clauses, a Court must consider whether, in the particular case, there is an actual imbalance which causes a damage to the insured.
The decision issued in May 2016 does not seem to have solved the problem as many experts have expressed doubts on the solution offered therein, to the point that more recent Courts’ rulings have departed from it (i.e. Court of Treviso no. 1530/2016; Court of Milano no. 7149/2016).
Claims Made clauses: ruling no. 24645
This is why, on this very matter, the United Sections of the Supreme Court have recently issued another judgment (no. 24645 of 02.12.2016). Ruling no. 24645 reinforces the principles already enshrined in the previous judgment and better specifies the difference between “pure” and “impure” Claims Made clauses. Moreover, it set out the criteria that must be followed by Judges to determine the validity of an “impure” clause: an “impure” clause should be considered unfair only if and when it causes a significant contractual imbalance to the detriment of the Consumer, in breach of the Legislative Decree no. 206 of 2005 (i.e. the Consumer Code, “Codice del Consumo”).
The ruling also points out that the evaluation of unfairness is made by each Court and, if well-argued, it cannot be censured by the Supreme Court. Now the ball is in the lower Courts.