Exclusions from guarantees: the Court of Cassation continues to toughen its tone with insurers!

After a year 2021 marked by the blows of the Court of Cassation against the mechanisms allowing insurers to be discharged from their obligations of guarantee ( questioning of the biennial prescription , extension of the unenforceability of exclusions neither formal nor limited , strengthening of the requirement relating to the very apparent nature of the exclusion clauses ), observers expected a calmer year 2022.

It does not necessarily take the path. Indeed, the High Jurisdiction has recently resumed what now resembles a crusade, this time attacking the legal mechanism for excluding fraudulent fault .

Article L.113-1 of the insurance code provides that "the insurer is not liable for losses and damages resulting from an intentional or fraudulent fault on the part of the insured" .

Since a judgment of October 7, 2008 having put an end to the assimilation between intentional fault and fraudulent fault, it seemed understood that intentional fault required, in order to be characterized, a will to cause the damage, whereas a simple risk-taking making the inevitable realization of the damage, seemed to be sufficient to characterize the fraudulent fault.

In a case in which the question arose of the compensable nature of the damage caused by a suicidal act (positioning on a railway track, at the level of a level crossing), the Court of Cassation decided, under the terms of a judgment of January 20, 2022 , to return to the notion of fraudulent fault, which it now defines as "a deliberate act by the insured committed with the awareness of the inescapable nature of its harmful consequences" .

In other words, it is now up to the insurer who intends to oppose the fraudulent fault (until then easier, in principle, to characterize than the intentional fault), to demonstrate that the insured having deliberately committed the act to the origin of the damage, was "aware" of the fact that his action would have material consequences.

The application of this definition to the present case naturally led the Court of Cassation to censure the appeal judges who held the existence of a fraudulent fault when the awareness that the insured had the inescapable nature of the harmful consequences of her action” .

Which raises the following question: by what means will the insurer be able to provide such proof?

Because the means are likely to be lacking, wouldn't insurers have an interest in inserting exclusion clauses in their contracts aimed at, while redefining it, fraudulent fault?

This is precisely what the insurer had done in our case, whose contract stipulated that “damage intentionally caused or provoked by any insured person or with his complicity” .

Drafted in this way, such an exclusion raised the question of what is meant by "damage caused" and, for example, whether it should include damage caused by the insured without the intention of causing it, as was apparently the case here.

And this is where the shoe pinches because, as the High Court regularly reminds us, the mere fact that an exclusion clause needs to be interpreted is sufficient to demonstrate that it is neither formal nor limited, and therefore cannot be applied.

Could insurers consider abandoning the field of exclusions and preferring the much less regulated field of the definition of insured risk, so that damage, even involuntary, caused by a deliberate act does not fall within the scope of guarantees?

In principle legal and widely used by insurance professionals, this practice has not to date been the subject of particular criticism from the Court of Cassation. Not yet….