QC clause
Encyclopedia
In insurance
law
, a QC clause is a clause in an insurance policy (usually but not exclusively a professional indemnity insurance policy) that provides that an action against the insured is not to be contested unless a Queen's Counsel
(or QC) advises that the defence has a reasonable prospect of success. The principal reason for such clauses is to minimise conflict between the insured and the insurer. The insurer will often wish to settle claims as quickly and cheaply as possible, but the insured may be concerned that paying on a claim implies negligence
which will damage their professional reputation, and want to contest the claim regardless. Professional indemnity policies commonly provide that the insurer will pay the legal costs of the defence. It is sometimes suggested that the clause is also designed to protect the public from the unjustified contesting of claims which have no real defence, but this may represent a charitable view of the way insurance companies conduct claims.
Conflicts between the insurer and insured can put a solicitor
who represents both in an individious position, particularly where the solicitor has received confidential information from one party, and may result in multiplicity of legal representation. In practice however, there is an enormous reluctance to invoke such clauses, partly because of the expense of instructing Queen's Counsel to advise, and partly because of the insurer's need to maintain good relations with the insured.
Although still called QC clauses, such clauses often provide that the advice of a junior barrister
of a certain seniority may be taken.
Some general liability policies contain a converse version the traditional QC clause; viz., that the insurer does not need to pay out on a claim against the insured unless a Queen's Counsel advises that there is no reasonable prospect of successfully defending the claim.
QC clauses were considered judicially by Lord Devlin
(in relation to another issue) in West Wake Price & Co v Ching [1956] 3 All ER 821.
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
, a QC clause is a clause in an insurance policy (usually but not exclusively a professional indemnity insurance policy) that provides that an action against the insured is not to be contested unless a Queen's Counsel
Queen's Counsel
Queen's Counsel , known as King's Counsel during the reign of a male sovereign, are lawyers appointed by letters patent to be one of Her [or His] Majesty's Counsel learned in the law...
(or QC) advises that the defence has a reasonable prospect of success. The principal reason for such clauses is to minimise conflict between the insured and the insurer. The insurer will often wish to settle claims as quickly and cheaply as possible, but the insured may be concerned that paying on a claim implies negligence
Negligence
Negligence is a failure to exercise the care that a reasonably prudent person would exercise in like circumstances. The area of tort law known as negligence involves harm caused by carelessness, not intentional harm.According to Jay M...
which will damage their professional reputation, and want to contest the claim regardless. Professional indemnity policies commonly provide that the insurer will pay the legal costs of the defence. It is sometimes suggested that the clause is also designed to protect the public from the unjustified contesting of claims which have no real defence, but this may represent a charitable view of the way insurance companies conduct claims.
Conflicts between the insurer and insured can put a solicitor
Solicitor
Solicitors are lawyers who traditionally deal with any legal matter including conducting proceedings in courts. In the United Kingdom, a few Australian states and the Republic of Ireland, the legal profession is split between solicitors and barristers , and a lawyer will usually only hold one title...
who represents both in an individious position, particularly where the solicitor has received confidential information from one party, and may result in multiplicity of legal representation. In practice however, there is an enormous reluctance to invoke such clauses, partly because of the expense of instructing Queen's Counsel to advise, and partly because of the insurer's need to maintain good relations with the insured.
Although still called QC clauses, such clauses often provide that the advice of a junior barrister
Junior barrister
A junior barrister is a barrister who has not yet attained the rank of Queen's Counsel. Although the term is archaic and not commonly used, junior barristers can also be referred to as utter barristers derived from "outer barristers" or barristers of the outer bar, in distinction to Queen's...
of a certain seniority may be taken.
Some general liability policies contain a converse version the traditional QC clause; viz., that the insurer does not need to pay out on a claim against the insured unless a Queen's Counsel advises that there is no reasonable prospect of successfully defending the claim.
QC clauses were considered judicially by Lord Devlin
Patrick Devlin, Baron Devlin
Patrick Arthur Devlin, Baron Devlin, PC was a British lawyer, judge and jurist. He wrote a report on Britain's involvement in Nyasaland in 1959...
(in relation to another issue) in West Wake Price & Co v Ching [1956] 3 All ER 821.