Italian Supreme Court gives judgment on claims made clauses

The Italian Supreme Court has recently given another judgment on claims made clauses, creating some confusion within the Italian legal world in the process.

The Italian Supreme Court recently gave another judgment (No. 10506/2017) on claims made clauses. This declared claims made clauses to be unfair and invalid, so created some confusion in the Italian legal world in relation to the validity and enforceability of these clauses.

Our view is that this decision should not be of major concern to the market. The Supreme Court unequivocally acknowledged the validity of claims-made clauses in 2016 (judgment no. 9140/2016). In addition, the Supreme Court has previously made it clear that an examination of the particular circumstances, including any violation of a client’s contractual freedom or unequal access to information between the parties, is required. Whilst the Supreme Court appears to state a general principle in judgment No. 10506/2017, this cannot be taken as being applicable to all similar cases, as each case will be subject to a fact-specific evaluation.

Furthermore, the validity of claims made clauses is enshrined in statute, in particular by Decree of the Ministry of Justice of September 2016 on lawyers’ compulsory professional insurance and by Law 08 March 2017 n. 24 on doctors’ compulsory professional insurance. Both pieces of legislation confirm that claims made clauses are legally valid and binding when drafted in conjunction with, inter alia, retroactivity clauses and of an extended reporting period aimed at protecting professionals should they cease their activity and no longer be insured. Both the retroactivity period and the extended reporting period should at least ten years, taking into account the relevant limitation period.

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