Contract certainty and the contra proferentem rule: when should the rule apply in insurance litigation? A study to determine how this rule tends to feature in Insurance disputed cases in Malta

Abstract

The contra proferentem rule is a legal principle that applies in cases where there is uncertainty in
the interpretation of a contract. It states that where there is ambiguity, the contract should be interpreted
against the party who drafted it. In insurance litigation, this rule often arises when there is a dispute between the insurer and the insured over the terms or cover under an insurance policy. This paper examined the application of the contra proferentem rule in insurance litigation cases in Malta. The study aims to determine the impact the rule has and the legal outcome of such cases. The research methodology involved a review of relevant case law and legal literature on the application of the contra proferentem rule in disputes. In addition, interviews were conducted with legal practitioners who have experience in handling insurance litigation cases. The findings of this study contribute towards the understanding of how the contra proferentem rule operates in the context of insurance disputes, highlighting the importance of clear and unambiguous contract drafting, the role of the judiciary in interpreting and applying the rule, and the impact of the rule on contract certainty and dispute
resolution. The results shed light on the circumstances in which this rule tends to be applied and its impact on the outcome of such cases. The findings of this study also highlight some of the limitations of the contra proferentem rule and suggest that the rule tends to result in the insured party receiving a more favourable outcome. Overall, this study will contribute to the development of a better understanding of the role of the contra proferentem rule in insurance litigation, particularly in Malta, and its implications for legal practice and policy. The paper contributes to academic research by synthesizing the existing literature and case law on the topic and provides guidance for insurers and
policyholders on how to navigate the interpretation and enforcement of insurance contracts. The findings and conclusions of this paper could inform policy and regulatory developments in the insurance industry and help to improve contract certainty and reduce disputes in the future.

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