March 14, 2022

It has become an unfortunate reality that when it comes to claims professionals are often considered to represent “deep pockets” in triggering their insurance cover. Ireland has seen many spurious claims driven through the court process over the years that led to costs increasing and many professionals being put under massive pressure. Thankfully, the courts are now providing more teeth when it comes to striking claims out that are without merit, frivolous/vexatious or statute barred for example.

However, in the absence of a more streamlined legal process where more applications are successful to strike out claims for not demonstrating a cause of action, professionals need to remain vigilant in the wording of their agreements. Again, this means liaising closely with their broker and relevant insurance stakeholders, Professional Body, and at times legal advisor with a view to seeking to avoid claims where possible and having the back-up paper trail to at least seek to mitigate where a claim is unpreventable.

In light of the developments in alternative dispute resolution mechanisms over recent years the courts also have the ability to make costs orders against parties who fail to consider or utilise mediation where appropriate.

It is an unfortunate reality that in view of the Civil Liability legislation in Ireland (and the dreaded 1% rule on apportionment), professionals often have to deal with claims when other parties liquidate without insurance. It is therefore really important that when entering into contractual agreements that the professional considers the insurance implications and position of the parties before so doing, and where necessary obtain insurance or legal advice to protect their position in the event of an insurance notification.

Similarly, given that professionals have “claims made policies” that often contain a more extensive wording than general lines insurance policies, it is important that appropriate advice is obtained where necessary on what constitute a circumstance or a claim as the professionals duty to notify arises when they are aware of a circumstance that could give rise to a claim or a claim arises.