S. No. 293/2019 I.P.J. No. 39 (office) of 25 November 2019
Spanish case law has repeatedly held that the duties associated with providing professional services are regarded as being of “reasonable endeavours” and not an absolute obligation. Applied to intermediation – and for this obligation to be considered as satisfied – an insurance intermediary must be able to evidence that it has employed the means required to achieve the intended result, even if such result was not achieved.
In connection with an invitation for a public tender, a customer used a broker and, in order to take part in the tender process, provided the broker with the relevant information to be able to have the necessary certificate of insurance. The broker forwarded the information to the insurance company, however the company declined to cover this risk, and the customer did not obtain the certificate and was unable to participate in the tender process. The customer sued the broker, contending that the broker had failed to take the necessary steps to enable it to participate in the public tender.
The court rejected the customer’s claim, adjudicating that the customer had not proved any breach of duty by the broker. The court decided that the intermediary had fulfilled its obligations by forwarding to the insurer the information necessary to obtain the insurance certificate. The broker could not be held liable for the fact the insurer declined to provide cover.
This decision is positive because it clarifies the limits of the duties incumbent on insurance intermediaries, making it clear that brokers owe a reasonable endeavours obligation and not an absolute obligation. Therefore, the mere failure to achieve a successful result is not enough for customers to have a legitimate complaint: they will have to prove negligence on the part of the insurance intermediary.