Recently, the Supreme Court has once again ruled on the issue of claims made clauses, with two rulings that seem to oppose each other. These are ruling No 8117 of April 23, 2020 and ruling No 8894 of May 13, 2020.
ON THE VALIDITY OF THE CLAIMS MADE CLAUSES
With ruling no. 8117 of April 23, 2020, the Supreme Court, following the well-known ruling of the United Sections no. 22347/2018, confirmed the validity of the so-called claims made clauses, highlighting the following fundamental aspects:
- Derogation of Article 1917, paragraph 1 of the Italian Civil Code through the claims made clauses
The loss occurrence model referred to in Article 1917, paragraph 1 of the Italian Civil Code may be derogated by the parties who, in the exercise of their contractual autonomy, may choose a model insurance contract containing a claims-made clause, whether pure or impure.
- Absence of unfairness in the claims made clauses
Claims made clauses cannot be considered unfair for the purposes of Article 1341 of the Italian Civil Code since they delimit the object of the insurance contract and not the insurer’s liability. In fact, an insurance clause is to be considered unfair when it limits the consequences of fault or non-fulfilment or excludes the guaranteed risk. The claims made clause, however, does not exclude the guaranteed risk but limits it “depending on an additional time factor in relation to the time when the harmful conduct took place”.
- The typical nature of the claims made clauses and the exclusion of the merit control
The legislator, in regulating compulsory insurance for medical facilities and medical operators, has in fact imposed and codified the claims made model with art. 11 of the so-called Gelli-Bianco Law (Law 24/2017). The clause in question has, therefore, become typical and is outside the control of the merit of the interests pursued by the parties pursuant to Article 1322, paragraph 2, of the Italian Civil Code.
- Unquestionability of claims made clause
Since the assessments regarding the respect of the synallagmatic balance between the parties imply factual issues, the clauses are unquestionable “if not within the strict limits set forth in the new formulation of Article 360, no. 5 of the Code of Civil Procedure”.
ON THE NULLITY OF THE CLAIMS MADE CLAUSE
The approach described above was again disputed by the recent decision of the Supreme Court No. 8894 of May 13, 2020. With this ruling, the Judges, contrasting with principles that appeared to be established, provided that the claims made clause, that imposes a termination on the insured, is void, pursuant to Article 1341 of the Italian Civil Code and Article 2965 of the Italian Civil Code.
More specifically, in the ruling in question, the clause examined by the courts provided for the obligation of the insured to report the claim within 12 months from the termination of the contract. Therefore, the claim had to be received within 12 months from the termination of the contract and the insured person had to report the claim within that time. Such a clause leads to an unequal situation between policyholders since it makes insurance coverage dependent on (i) the event deduced in the contract and (ii) a further uncertain event, i.e. the third party’s claim for compensation. And this dependence creates a disadvantage for the policyholder against the insurer, creating a termination that the policyholder cannot avoid.
The Supreme Court, given the typical nature of the contract containing the claims, made clause and the verification carried out pursuant to Article 1322, paragraph 1, considered this clause, as structured in this case, null and void since (i) it falls within the unfair clauses pursuant to Article 1341 of the Italian Civil Code, (ii) contravenes Article 1341 of the Italian Civil Code, which forbids unfair clauses unless expressly signed and (iii) violates Article 2965 of the Italian Civil Code, which provides for the nullity of agreements that impose termination that make the exercise of the right excessively difficult for one of the parties.