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WHERE IN THE WORLD | PI Insurance & Legal Jurisdiction

By mjackson

The cover arranged for members of the Chartered Institute of Architectural Technologists through CIAT Insurance Services will provide cover for claims brought against you anywhere in the world, other than those arising in relation to projects in the US or Canada which are generally excluded. Insurers may be prepared to extend the cover to include the US and Canada for an additional premium.

However, the simple fact that cover is provided does not prevent any issues arising when you are dealing with Projects and Contracts in a foreign legal jurisdiction.

The Contract

In the majority of cases, the clause regarding legal jurisdiction is likely to be straightforward. For example, if you are based in England, the Client is based in England and the work is in England, then it follows that the relevant jurisdiction will be English law and the relevant clause will read along the following lines:

The applicant and interpretation of this Deed shall in all respects be governed by English law. Any dispute or difference arising hereunder shall be subject to the exclusive jurisdiction of the Courts of England & Wales

However, the position can become more complicated, when aspects of the Project are outside of the UK, be that the Client or the Project itself.

The Devil you know …

When a project involves work or clients in a foreign jurisdiction, it is for the various parties to agree which legal jurisdiction is relevant to that appointment. It is not necessarily the case that the client or the work being based in another country automatically means that a different legal jurisdiction is accepted.

As a result, wherever possible, we would suggest that you attempt to have any appointments made subject to the laws of the United Kingdom, be that England & Wales, Northern Ireland or Scotland. One of the main reasons for this is that the obligations and requirements imposed by law are tried and tested and there are no issues with the cover available.

A Stranger in a Strange Land

There may, however, be instances when the Client is adamant that the appointment falls under a separate legal jurisdiction and, in order to secure the work, you may be left with no alternative but to accept it. But what does this mean for you?

The main area that potential issues can arise is the actual requirements and obligations imposed on you within that jurisdiction.

As detailed at the outset of this article, the cover provided under your professional indemnity insurance will provide cover for work undertaken and claims brought anywhere in the world (excluding the US & Canada unless this is specifically requested and agreed). As such, the policy will still be in place to respond to any claim made against you subject to the terms and conditions of the policy.

The main area that potential issues can arise is the actual requirements and obligations imposed on you within that jurisdiction.

By way of an example, you may be contracted to provide design services for a project in the state of Qatar and the client wants the appointment to be subject to the laws of Qatar.

This means that the terms of the contract will be subject to the laws of that territory, but any common law (or equivalent) obligations and particular insurance requirements will also be applicable. Again, turning to the example of Qatar, the fact that you are insured in the UK by a UK Insurer may not be acceptable and you may be required to obtain cover locally to comply with their requirements. As the requirements of each individual legal jurisdiction you may consider working in may differ significantly, it is extremely important the impact of accepting that jurisdiction is considered fully before accepting the appointment.

As we at CIAT Insurance Services are a UK-based insurance broker, we may not always be in a position to provide advice regarding the legal and insurance ramifications of accepting work under a foreign legal jurisdiction. As a result, if you are considering taking on work outside the UK, we will always recommend that you take appropriate independent legal advice about the impact this will have on your business both in terms of legal and financial obligations of operating in that area.

If you would like to discuss any of the issues raised in this article please contact us.

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