The challenges of social inflation in terms of insurance (part 2)

The challenges of social inflation in terms of insurance (part 2)
The challenges of social inflation in terms of insurance (part 2)
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Judicialization of society

Published on May 7, 2024 at 9:00 a.m.

DLA Piper LLP

Reading time 13 minutes

laying the theoretical foundations and delineating the contours of social inflation in the first part of this article, DLA Piper’s lawyers focus here more precisely on the specific manifestations of this phenomenon in France.

Hamza Akli, lawyer at the bar, and Luc Bigel, lawyer at the Paris and Quebec bars, DLA Piper France LLP

For the record, as we had already mentioned in the first part of our article, social inflation can be defined as “a trend of dramatically increasing costs and verdicts associated with civil litigation that exceeds general economic inflation without the legal or factual basis changing significantly to justify it” (1). More specifically, in the field of insurance, social inflation is presented as being “the impact of changes to the tort system which regulates cases of civil and/or professional insurance liability before the courts” (2).

Already very present in the States, it is one of the major emerging risks that the French insurance industry must prepare to face in the coming years. Without claiming to be exhaustive, we will present certain factors contributing to the social inflation which is gradually taking shape in France. If the main factor in the increase in litigation remains the increase in standards allowing economic actors to be held liable, other factors such as the facilitation of the introduction of actions in France as well as the emergence of complex claims and systemic also contribute to the development of social inflation.

Some elements arising from the normative framework contributing to social inflation

The increase in legislative and regulatory standards, which can be described as normative inflation, actively participates in social inflation. In fact, the…

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