Volume 03 Issue 05-2023
24
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
03
ISSUE
05
Pages:
24-31
SJIF
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MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
ABSTRACT
The modern approach to determining liability assumes responsibility for damage caused by a specialist to any third
party. Thus, the Law "On Protection of Consumer Rights" provides for the recognition of the right to claim
compensation for the damage caused by each injured consumer, regardless of whether or not he has a contractual
relationship with the manufacturer (executor, seller). Such a right shall be preserved during the specified period of
service (validity period), if no such period is specified - within 10 years from the date of production of goods
(acceptance of work, services). The contractor is not responsible for the defects in the work performed or the services
provided, if he can prove that they were caused by the consumer's fault or force majeure.
KEYWORDS
Insurance, professional liability insurance, contract, civil liability, foreign experience, insurance article.
INTRODUCTION
It should be noted that for a long time in European
practice, liability arose only for damage to persons who
had a contractual relationship with the specialist. The
1951 case Candler v. Crane Christmas & Co. is a case in
point. The plaintiff buys the company based on
financial documents prepared by accountants. The
documents turn out to be wrong and the claimant
suffers. His suit against the accountants was dismissed
on the ground that the accountants were employed by
the company and owed no duty to the plaintiff.
In Great Britain, the "Hadley Birney principle" was
introduced into case law in 1963, and this principle
extended professional liability to third parties.
Consequently, if the proceedings had taken place after
1963 rather than in 1951, the accountants would have
been held liable. Such an expanded definition of
Research Article
EXPERIENCE OF FOREIGN COUNTRIES REGARDING THE CIVIL LEGAL
REGULATION OF COMPULSORY PROFESSIONAL LIABILITY INSURANCE
Submission Date:
May 21, 2023,
Accepted Date:
May 26, 2023,
Published Date:
May 31, 2023
Crossref doi:
https://doi.org/10.37547/ijlc/Volume03Issue05-06
Izzat T. Palvanov
Independent Researcher Tashkent State Law University Tashkent, Uzbekistan
Journal
Website:
https://theusajournals.
com/index.php/ijlc
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Volume 03 Issue 05-2023
25
International Journal Of Law And Criminology
(ISSN
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VOLUME
03
ISSUE
05
Pages:
24-31
SJIF
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MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
responsibility has found its place in modern world
practice.
THE MAIN RESULTS AND FINDINGS
Depending on the type of professional activity, health,
material (property) or financial damage may be
caused. Doctors, truck drivers, pharmacists and other
similar professions can harm the health of customers.
The possibility of material damage exists as a result of
the activities of architects, builders, engineers,
constructors, designers. Financial damage is typical of
the work of auditors, bankers, brokers, appraisers, etc.
The UK's insurance business has been concentrated in
London for many years as a global financial centre.
London's largest international insurance market serves
the cash flows of a number of countries and
companies. The reputation of the London international
insurance market is based on the significant human
potential of insurance market specialists, the highly
developed infrastructure of the market, as well as the
presence of Lloyd's Insurance Corporation, which is
widely known outside Great Britain. All major insurance
companies in the world have offices or branches in
London. Central offices of all major international
insurance and reinsurance brokers are also
concentrated here. The oldest (founded in 1760) and
the most influential classification societies - the Lloyd's
Register of Shipping. A number of international
insurance organizations have their headquarters in
London, as well as the activities of some structures of
the national insurance market (London Institute of
Insurers, Chartered Insurers Institute, etc.).
In the UK, insurance companies are not allowed to
carry on any other type of business other than
insurance.
The insurance contract provides for the coverage of
work performed within the country. When conducting
business abroad, the policyholder must additionally
inform the insurer to extend the insurance coverage.
Until recently, insurers did not limit the amount of
compensation for employer's liability insurance
operations. Without considering a single catastrophic
loss, many insurance companies began to introduce
limits of liability. Currently, they are £10-25 million per
insured event, including legal costs. One of the reasons
for such changes was the disaster on the Piper Alpha
offshore platform, where 165 of the 226 workers died
as a result of the explosion. Employees working for
different employers were exposed to the same
accident risk, that is, there was an accumulation of risk.
The total amount of paid claims reached 2 billion
dollars.
Casualty or Liability Insurance according to
international classification is a special type of
insurance, which includes:
-
public liability (Public Liability);
-
product liability (Product Liability);
-
employer's liability (Employer's Liability);
-
Environmental Impairment Liability;
-
Motor Third Party Liability.
In
addition,
according
to
the
international
classification, Carrier's Liability is a marine type of
insurance, Professional Indemnity, Directors & Officers
Liability are a financial type of insurance.
The following types of liability insurance have
developed in foreign countries: "insurance until the
presentation of the key"; civil liability insurance of car
owners under the "green card" system; insurance for
garage owners; intellectual property insurance;
insurance in case of breach of trust; unemployment
Volume 03 Issue 05-2023
26
International Journal Of Law And Criminology
(ISSN
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2771-2214)
VOLUME
03
ISSUE
05
Pages:
24-31
SJIF
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FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
insurance; insurance in case of receipt of counterfeit
products; insurance in case of damage to business
reputation, etc. In this case, turnkey insurance provides
professional liability coverage for general contractors,
architects or engineers who perform their activities in
connection with the implementation of a particular
project, for example, the professional liability
insurance is valid for the contract of construction of
the object "until the presentation of the key",
according to the contracts for the design (design) or
construction works, as well as for the construction
works carried out under the leadership of the
construction contract team. "Turn-key" insurance
protection combines the types of insurance protection
against errors and defects in the production of project
works and insurance protection after the completion
of the work. If the contractor becomes insolvent and
cannot complete the work under the contract, the
insurer will make a payment equal to the contracted
amount. This, in turn, allows you to pay for the services
of another contractor and complete the work.
Liability insurance abroad provides coverage for all
possible cases. Thus, for example, the insurance of the
ground support service of satellites and spaceships
(ground support insurance) is provided. In aviation
insurance, this is a form of liability insurance related to
the use of space technology. Provides insurance
protection in case of claims for damages to the life,
health or property of third parties as a result of a
certain event during the launch of a satellite or
spacecraft. However, most liability insurance contracts
deal with professional liability insurance. This type of
liability insurance protects certain professionals
(notaries, doctors, architects, pharmacists, lawyers,
etc.) from legal claims arising from the current
legislation or from claims against them to clients
(patients) provides compensation for material damage
caused by negligence committed by these persons in
the course of performing their duties. Insurance
coverage, as in our country, only applies to legal
liability and not to moral liability. The basis for the
emergence of legal responsibility is the violation of
contractual obligations by the professional person
himself and by persons acting on his behalf. It is a
condition of the contract that the professional is
obliged to exercise due care and professional skill. In
many countries, professional indemnity insurance is
required by law. Having an insurance policy is one of
the necessary parts of obtaining a license for private
practice. This type of insurance does not apply to any
specific situation, but is valid for the period specified in
the insurance contract, also occurred during the term
of the policy, however, it applies to cases identified
after a certain period, i.e. after the expiry of the
insurance policy.
Physician Professional Liability Insurance is a type of
professional liability insurance that was formed in
developed countries in the 1960s and 1970s as a form
of medical malpractice insurance. Of course, this does
not refer to criminal errors, but to errors made by
doctors when they demonstrate the highest integrity
and use the maximum knowledge and experience. An
important impetus for the development of this type of
insurance is the precedents set by the courts, which
have decided a million or more dollars in favor of the
plaintiffs. Anesthesiology and surgeons are often sued.
The number of lawsuits against psychiatrists is
increasing, especially in situations involving suicide. If
earlier it was considered impossible to foresee the
suicide of a nervous patient, now, as a rule, this is not
the case, and the relatives of the person who
committed suicide have filed lawsuits against
psychiatrists, accusing them of not foreseeing a
preventable misfortune. Due to the large number of
insured events, premium rates for professional
indemnity insurance for physicians tend to increase.
Volume 03 Issue 05-2023
27
International Journal Of Law And Criminology
(ISSN
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VOLUME
03
ISSUE
05
Pages:
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SJIF
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FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
For example, it is enough to say that some doctors in
the USA pay insurance premiums up to 15-20 thousand
dollars a year.
Broadcasters' liability insurance is also provided in
foreign countries. This insurance is carried out in order
to protect the interests of radio and television stations
from damages caused by errors and omissions made in
the production activities, use and distribution of
programs or advertising materials. Insurance coverage
is usually provided on a "claims" basis.
Professional
liability
insurance
also
includes
professional-indemnity insurance. It is a type of liability
insurance used by certain professionals (doctors,
lawyers, accountants, businessmen, etc.) that deals
with the risk of compensation for professional
negligence claims. For example, if an entrepreneur
shows in his advertisement that he is an expert in this
field, we may be talking about wrong advice; or about
a doctor who performed a cursory examination that
led to an incorrect diagnosis; or about a lawyer who,
without understanding the nature of the case, gives
wrong advice to his client, as a result of which he
worsens the situation of the latter.
Professional liability insurance also includes errors and
omissions insurance (E&O). This is insurance that
provides compensation for damages caused by
negligence, mistakes in behavior made by the insured
or failure to perform actions in the performance of his
service or professional duties. Insurance is often
carried out by the insured's personal provision (in the
amount of more than 1 thousand dollars) and, as a rule,
unlike professional liability insurance, consent of the
insured is not required to settle claims.
Lawyers' professional liability insurance is known
worldwide as Errors and Omissions (E&O) insurance. It
is an important mechanism to protect the interests of
clients from the risk of lawyer's mistakes made due to
failure or improper performance of professional duties
by the lawyer, disclosure of information constituting
attorney-client privilege by a lawyer, loss of documents
related to professional activity by a lawyer, manifested
in destruction or damage, etc., and for lawyers-if they
commit such professional errors, is considered a way
to get rid of excess costs.
Compulsory professional indemnity insurance of
lawyers applies in many European countries. At the
same time, the legislation of different countries differs
significantly in the concept of supervision over lawyers,
including the issues of compensation for damages
caused by receiving unqualified legal aid. The US has a
voluntary system of professional indemnity insurance
for lawyers. At the same time, it is important to note
that there are a large number of lawyers and law firms
that have insured their property interests in
connection with their professional liability to clients.
Professional liability insurance of a lawyer is one of the
international legal standards published in the Code of
General Rules for Lawyers of the European Community
dated 01.10.1988. In accordance with clause 3.9.1 of this
Code, lawyers must always be insured against claims
related to lack of professional qualifications. The
amount of the insurance sum is determined within
reasonable limits according to the risk of errors that
may be committed by lawyers in the course of their
professional activities.
In
European
countries
(Germany,
Austria,
Liechtenstein, France, Italy, Portugal, Netherlands,
Luxembourg, Belgium, Great Britain, Iceland, Ireland,
Sweden, Denmark, Norway, Finland, Lithuania,
Estonia, Hungary, Slovakia, Slovenia, Slovenia, Croatia,
Volume 03 Issue 05-2023
28
International Journal Of Law And Criminology
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VOLUME
03
ISSUE
05
Pages:
24-31
SJIF
I
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FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
Romania and Cyprus) professional indemnity insurance
is mandatory for lawyers.
In Germany, the lawyer's professional liability
insurance is part of a well-established mechanism for
sharing the risks of the lawyer's professional mistakes
between the lawyer, the insurance company and the
client. All lawyers must carry professional indemnity
insurance. Lawyers are professionally liable for
damages caused by negligence to their principals and
other persons in the course of their professional
duties. It is not possible to obtain a lawyer's license in
Germany without an insurance contract with a specific
lawyer and not with the law firm where the person may
work.
A lawyer assumes unlimited liability, including liability
with his personal property. It is allowed to limit the
scope of this liability in agreement with the customer,
but in this case the scope of liability remains high.
Limitation of liability is desirable because full
compensation for damages, especially when the
matter concerns commercial legal relations, may
completely deprive the lawyer of further opportunities
for practice.
The minimum amount of compensation for possible
damage is 250,000 euros per insured event. Payments
of the insurer in all cases of damage caused within one
year may be limited to four times the minimum sum
insured. Given the high formality of the German court
system, even a minor professional error by a lawyer can
result in the recovery of large sums of money from the
lawyer. According to statistics from German insurers,
about 20% of clients' mistakes do not forgive lawyers
and turn to insurance companies for compensation.
Professional indemnity insurance is also mandatory for
lawyers in France. However, the mechanism of
operation of such insurance is slightly different from
that of Germany. A warrant of attorneys enters into a
general insurance contract with a commercial
insurance company on behalf of and for the benefit of
the entire legal community entered into the register.
French law provides for a minimum insurance amount
of 1.5 million euros per year, which is an average annual
insurance premium of 1,000 euros per lawyer.
Meanwhile, unlike in Canada, where the amount of
insurance premium increases as the lawyer's
professionalism and experience increases, in France,
the insurance premium is the same for all lawyers,
regardless of experience. This is because a novice
lawyer does not have practical skills and often makes
mistakes, but every mistake of an experienced lawyer
can be "worth its weight in gold".
In France, the regulation of the lawyer's liability
insurance is distinguished by the fact that the
insurance payment to the injured client is paid only by
a court decision, that is, every insurance event related
to the lawyer's professional liability is the subject of a
trial in a specialized chamber of the Court of Appeal.
During the trial, the court determines whether the
lawyer really made a professional mistake, how the
lawyer caused damage to the client, establishes a
causal relationship between the mistake and the
damage and the amount of insurance compensation.
However, French law has an exception to the general
rule of compulsory insurance for lawyers: instead of an
insurance contract, a lawyer may have financial
guarantees, lawyers are also entitled to use lawyers
employed by unions, agencies, employers or civil law
contracts.
Professional liability insurance for Italian lawyers and
law firms has become mandatory since 2017. The
Volume 03 Issue 05-2023
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VOLUME
03
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05
Pages:
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SJIF
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(2021:
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)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
minimum amount of insurance for professional liability
insurance of a lawyer is 350,000 euros per year. The
insurance policy must be renewed annually by paying
the current rate. Lawyers are obliged to send a copy of
the insurance contract to the Chambers of Advocates
(lawyers' orders), as well as to provide the insurance
policy at the request of clients when contacting
lawyers. The terms and amount of compulsory
insurance coverage are determined every 5 years.
Professional liability insurance for lawyers in Lithuania
is set at 30,000 euros. If the client is dissatisfied with
the lawyer's work and goes to court, this fee must be
reimbursed. In such cases, the insurance company that
defends the rights of the lawyer as a third party before
the client is the defendant.
Professional indemnity insurance is also mandatory for
lawyers in Romania. A lawyer must insure the risk of
professional mistakes in the amount of 6,000 euros per
year, for a trainee lawyer this amount is 3,000 euros
per year. Each attorney must submit a copy of their
professional indemnity insurance policy for the
following year to their respective regional bar
association each year by the end of the calendar year.
Romanian law allows legal entities to conclude a single
general professional liability insurance contract,
whereby all lawyers, also all technical and
administrative staff are insured. The absence of a
professional liability insurance policy is the basis for
removing a lawyer from the register of lawyers who
have the right to practice.
In Canada, as in many European countries, there is
mandatory professional liability insurance for lawyers.
In Canada, the minimum coverage is $1 million, with
rates starting at $1,000 per year.
The law requires all members of the bar association
(not just those in private practice) to certify their status
and pay insurance premiums every year. In each
province and territory, the competent authority
administers the liability insurance program. All
mandatory attorney liability insurance programs
provide coverage of at least $1 million per client claim.
Attorneys and law firms are often interested in
increasing their insurance coverage for additional
protection.
Professional indemnity insurance is not mandatory for
attorneys in most states. However, at least 26 state
laws require uninsured lawyers to notify their clients
that their practice is uninsured. In some states (such as
South Dakota and Alaska), lawyers are required to sign
a written consent form to inform their clients of the
lawyer's insurance status (disclosure rule). Providing
false information to a client about his or her insurance
status can result in a lawyer losing his or her law
license.
According to statistics, every fifth lawyer in the United
States is sued for malpractice during the year,
prompting lawyers to voluntarily enter into contracts
with insurance companies. That is, when choosing a
lawyer in the United States, it is free to choose a
professional liability insurance that ensures his
credibility in front of clients, or save money and
thereby increase the risk of losing clients.
Thus, although there is a voluntary liability insurance
system for lawyers in the US, but because there are
many lawsuits from clients complaining about the
actions of lawyers, this encourages law firms and
attorneys to insure their work. Lawyer's professional
indemnity insurance costs excluding rent, exceeds all
his other running costs. For bar associations, this cost
item is the third largest after staff salary costs.
Volume 03 Issue 05-2023
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International Journal Of Law And Criminology
(ISSN
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VOLUME
03
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05
Pages:
24-31
SJIF
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FACTOR
(2021:
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705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
The prices of this type of insurance are somewhat
paradoxical. Insurance premiums are lowest for entry-
level attorneys, but then increase significantly over 5-
10 years, leveling off with prices for experienced
attorneys. This is because lawyers do not practice long
enough to develop a certain image.
According to the American Bar Association, attorneys
who have been in private practice for less than 5 years
account for only 3.5% of personal injury claims. 37% for
lawyers working for 11-20 years. In addition, it should
be remembered that experienced lawyers deal with
more complex cases, and also observe the work of
other lawyers.
Insurance fees start at $500 per year for entry-level
attorneys and can go up to $1,500-$3,000 for
experienced attorneys. In addition, the cost of
insurance depends on the area of law that the lawyer
deals with.
In world practice, there are various systems of
professional liability insurance, which can be reduced
to four main types:
1) individual insurance of a certain lawyer in a private
insurance company (Germany, Finland, Netherlands,
Japan, Brazil);
2) self-insurance, that is, insurance through a bar
association in mutual insurance societies (Canada,
Great Britain, South Africa, Australia);
3) collective insurance, a lawyer's association with an
insurance company represents the interests of all its
members when concluding an insurance contract
(Denmark, Belgium, Sweden, Israel);
4) a mixed system that includes elements of several of
the listed types, for example, while participating in a
mutual insurance company, a lawyer can additionally
insure his risk in a private insurance company.
The legal systems of different countries have different
procedures for confirming an insurance event and
receiving an insurance payment. It seems that in our
country, a dispute between a person who has
entrusted his defense to a lawyer and a lawyer arises
when the lawyer does not fulfill his duties honestly,
and if the lawyer does not admit this mistake, the
dispute must be resolved in court. In the event of a
dispute being resolved in the Bar Association,
members of the Bar Association are obliged to analyze
the activities of their colleagues for "mistakes". This
undoubtedly affects the moral and spiritual climate in
the legal community. Lawyers risk being caught
between client and corporate interests, and
themselves in a similar situation. A court decision, for
example, on recognition of the right of a client to
compensation for damages caused to a lawyer due to
the poor quality of his services, will also be binding for
insurers. Such a mechanism works in many countries
(for example, France, USA).
CONCLUSION
In our opinion, it is necessary to create an institute of
professional responsibility of lawyers in our country.
The right to choose lawyers, as well as the obligation
to inform the client about the availability of insurance,
which is accepted in almost all states of the United
States, is finally democratic. However, the current
European version requires lawyers everywhere to carry
professional indemnity insurance, it is a difficult tool in
protecting the property interests of both consumers of
lawyers' services and lawyers. In our opinion, in the
conditions of modern economic development of
Uzbekistan, this way will be the most acceptable and
reasonable.
Volume 03 Issue 05-2023
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International Journal Of Law And Criminology
(ISSN
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2771-2214)
VOLUME
03
ISSUE
05
Pages:
24-31
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
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