Direction of process clause in modern insurance law


Author is dealing with theoretical analyses of direction of process clause in modern liability insurance. Firstly points at peculiarity of liability insurance whose protection function is not limited only to coverage of compensation claims against insured party (economic protection), but also relates on legal protection. Direction of process clauses makes the core of legal protection of insured. Author observes mentioned clauses from the point of view of compatibility with the standards of consumer protection. Having in mind that direction of process clause leads to the delegation of procedural authorities and that represents some degree of violation of procedural freedoms of insured, author is advocating for statutory regulation of its content.Settlement clause and clause prohibiting the recognition of liability has been processed with the intention to point out to the insurer’s efforts to take complete control over procedural behavior of the insured. Author concludes that none of the mentioned clausescan be interpreted in such a way to forbid the insured to get involved in proceedings against him. Public policy as well as the right on legal protection speaks against such interpretation.