Precedent-setting judgment impacting the insurance sector: Nearly PLN 700,000 in damages for violating the requirement to analyse the customer’s insurance demands and needs

The key legal issue in the case was the insurance distributor’s liability for infringing the obligation to conduct an analysis of the customer’s insurance demands and needs, as provided in Art. 8 of Poland’s Insurance Distribution Act.

The court held that:

• If a causal connection and the amount of the loss are proved, infringement of duties involving assessment of the customer’s insurance demands and needs can be grounds for liability in damages
• The Insurance Distribution Act, along with the EU’s Insurance Distribution Directive and provisions of soft law such as guidelines and recommendations issued by the Polish Financial Supervision Authority (KNF), ensures full protection of the customer regardless of whether the customer is a consumer or a business (even one with a long history of operations).

This is the highest amount we are aware of awarded to date by a Polish court to a company for infringement of duties in the distribution of insurance. The judgment (which is still appealable) confirms the direction taken by regulators (KNF, the Financial Ombudsman, and the Office of Competition and Consumer Protection), recognising that an analysis of the customer’s demands and needs is a key element in the insurance distribution process.

The client was represented by adwokat Mateusz Kosiorowski (head of the firm’s Insurance practice) and attorney-at-law Joanna Duda and adwokat Dr Maciej Kiełbowski (Dispute Resolution & Arbitration practice), with the support of adwokat trainee Anna Szczęsna (Insurance practice).