A contribution to the ongoing debate about the validity and effectiveness of the claims made clause, was made by the very recent judgment of the Italian Court of Cassation (no. 22891/2015 of 10 November 2015) which offers interesting observations on the criteria for drafting such clauses.
Subject to the prevailing case law on the validity of claims made policies as an expression of the contractual freedom referred to in Article 1322 of the Italian Civil Code, the Court set out the following principles:
- if the claims made clause is included in the section of the contract that deals exclusively with the subject-matter of the cover, then it cannot be regarded as unfair. In fact, according to the Court, "... the parties’ agreement on this provision is a direct agreement to restrict the subject-matter of the contract itself and, therefore… does not assume the status of a "condition” with independent status that requires the qualified consent" [i.e. dual signature] required by Article 1341 of the Italian Civil Code for any unfair term;
- if however the claims made clause is presented as a specific and separate "condition" which limits the insuring grant and therefore limits the subject-matter of the contract defined by other clauses specifically assigned to the identification thereof, then the clause may be unfair because - according to the Court - "the formal stipulation of this clause subsequent to a previous clause that has already defined the insuring grant more broadly... tends to restrict that which was given a broader meaning previously."
Therefore, a careful analysis of the policies is recommended in order to assess the potential impact of this decision on claims made clauses.