Commentary on Judgment Cass. civ., Section III, Ord. no. 8894/2020: Claims Made Clauses and Civil Liability

Judgment no. 8894 of 2020 by the Court of Cassation has reignited the debate on the validity of claims made clauses in civil liability insurance contracts. The Court addressed a dispute in which a hospital found itself liable for damages suffered by a patient, subsequently seeking indemnity from its insurance company, Generali Italia spa. However, the claims made clause presented a significant obstacle.

The Case Under Review

The central issue concerned the legitimacy of a clause that required the insured to report the claim within twelve months of the contract's termination, under penalty of forfeiture. The Court of Appeal of Rome had already confirmed the validity of the clause, arguing that it was not unfair and served legitimate interests. However, the hospital's appeal highlighted broader issues related to the insured's weaker position.

The claims made clause must not create a significant imbalance between the parties.

The Principle of Meritevolezza (Meritworthiness)

One of the most controversial issues concerns the concept of meritworthiness, which is distinct from unfairness. The Court referred to previous case law, particularly the judgment of the United Sections no. 9140 of 2016, to assert that a claims made clause is not inherently unfair, but can become so if it creates an unjustified imbalance between the parties. In this case, the hospital argued that the clause placed it in a difficult position, as the injured party's claim for compensation was uncertain and uncontrollable.

Implications of the Judgment

The Court upheld the third ground of appeal, recognizing that the clause in question, by imposing a forfeiture period not justified by the insured's conduct, violated the principles of lawfulness provided for by the Civil Code. In particular, the Court highlighted that the clause created an excessive burden for the insured, as the reporting of the claim depended on the timeliness of the injured party's claim for compensation.

• The claims made clause must comply with the limits imposed by law.
• The timing of the claim for compensation must be within the insured's control.
• Any clauses that make it difficult to exercise the right may be declared void.

Conclusions

Judgment no. 8894/2020 represents a significant step forward in protecting the rights of the insured. It clearly establishes that claims made clauses must be carefully evaluated to avoid creating an imbalance between the parties. Insurance companies should review their policies to ensure they do not place their policyholders in a vulnerable position. This decision not only clarifies the legal position of the insured but also contributes to greater fairness in the insurance sector.