The much-expected decision of the Italian Court of Cassation Joint Divisions (n. 22437, dated 5 June 2018) on the validity of the claims made clause was issued on 24 September 2018.
The judgment follows the "submission" of the matter, by the third section (terza sezione) of Court of Cassation, to its Joint Divisions (Sezioni Unite) on 8 January 2018. In particular, the terza sezione of the Court of Cassation asked the Sezioni Unite to decide on whether the following principles were correct:
(i)Parties cannot qualify as "loss" [sinistro in the Italian terminology] facts other than those provided for by art. 1882 of the Italian Civil Code, and, in insurance contracts covering civil liability towards third parties, facts other than those provided for by art. 1917 of the Italian Civil Code;
(ii)in insurance contracts covering civil liability towards third parties, the clause limiting coverage not on the basis of the contractual conditions in force at the time the insured caused the loss, but on the basis of those in force at the time the request for damages is brought against the Insured - i.e. the so called claims made clause - does never deserve protection under the applicable law pursuant to art. 1322 of the Italian Civil Code ("immeritevole di tutela").
In essence, the submission by the terza sezione questioned the validity of the claims made clause both on the ground that the request for damages cannot be qualified as "sinistro" for insurance coverage purposes, and on the ground that the claims made clause is intrinsically flawed and never deserves protection under the applicable law (thus making the clause always and necessarily void for "lack of meritevolezza"), especially in case the policy does not provide a discovery period.
Such submission was issued shortly after the previous Judgement n. 10560/2017 of such terza sezione of the Court of Cassation, which ruled that claims made clauses, in the absence of a discovery period (or postuma), is lacking meritevolezza (and thus void) under the applicable Italian law.
The new, somehow articulated decision of the Sezioni Unite of the Court of Cassation seems eventually clear the existing doubts as to the invalidity of the claims made clause establishing the following principle:
Third party liability insurance policies on claims made basis - covering the risk of insureds' losses following a claim - is a valid insurance and legitimately derogate from the first paragraph of article 1917 of the...