Court of Cassation, 15 February 2018: theory of apparent authority
An insured sued its agent, its sub-agent and the insurance company it had dealt with for having failed to formalise three life insurance policies for which it had paid a premium. The sub-agent had dealt with the client, but it had no authority to collect premiums or issue insurance policies. The subagent had also made out the cheques given to it in its ownnname, with the insured’s knowledge, and the sub-agent hadncashed them.
Both the Court of First Instance and the Court of Appeal rejected the insured’s claims, holding that he was required to exercise “minimum diligence”, which should have enabled him to detect, on his own, the obviously anomalous acts of the sub-agent. In fact, the cheque provided to the subagent was made out in the sub-agent’s name. The insured therefore appealed to the Court of Cassation.
The Italian Court of Cassation rejected the insured’s claims on the grounds that he was required to comply with the obligations imposed on him when he took out an insurance policy, and he should have detected the abnormal nature of the transaction and the violation of the intermediary’s rules of conduct.
This judgment is representative of the majority of the cases brought against intermediaries before the Italian courts, which emphasise the fact that the insured must exercise “minimum diligence” in his commercial relationship with the intermediary, and respect the obligations imposed on him if he wishes to avail himself of the benefits of his insurance policy. The Italian courts thus consider that the client must not aggravate his own loss.