OGH: Serial Claims Clause in Professional Liability Insurances

May 24, 2024 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has ruled that a Chartered Public Accountant’s excess liability insurance cannot invalidate a serial claims clause agreed between the accountant and their basic insurance.

The plaintiff was a tax consultancy firm which had professional indemnity insurance with the intervening party (basic insurance) and was insured under an excess liability policy taken out by the Austrian Chamber of Tax Consultants and Chartered Accountants with the defendant insurance company. The subject matter of the dispute was the coverage of a loss suffered by several investors represented by the plaintiff. The loss had been caused by the plaintiff’s failure to properly submit written submissions to the tax authorities.

Pursuant to Art. 2.2.2 of the General Terms and Conditions for Professional Liability Insurance (ABHV 2000 as amended in 2009), an insured event also includes all the consequences of several offences based on the same cause.

The plaintiff argued that there was serial damage even without the existence of a single mandate for all investors. The defendant argued that there was no serial damage and that the serial damage clause was also grossly unfair and inapplicable under Section 11(3) of the Austrian Act on Public Accounting Professions (Wirtschaftstreuhandberufsgesetz, hereinafter WTBG), meaning that the entire damage had to be compensated by the intervening party.

Like the lower courts, the OGH ruled that the damage was serial in nature.

This is because the plaintiff opted for a procedure in which the reasons for the objections, which had previously been submitted individually for each client, were to be summarised in a collective statement and sent to the relevant tax office by email. Irrespective of the existence of separate power of attorney agreements, the prevailing view is that this constitutes a single implementation process, so that there is serial damage. Thus, the loss arises from the same source. The reason for the claimant’s choice of procedure is irrelevant.

The defendant’s plea of invalidity of the serial claims clause was of no avail. This is because Section 11 (3) of the WBTG protects the contractual partner of the fiduciary (the claimant) and not the fiduciary (i.e., the policyholder of the basic insurance) or the excess liability insurer.

OGH 7 Ob 20/24b (17 April 2024)