insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...

, a KC clause (or, during the reign of a female monarch, a QC clause) is a clause in an

insurance policy In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as ...

(usually but not exclusively a professional indemnity insurance policy) that provides that an action against the insured is not to be contested unless a

King's Counsel In the United Kingdom and in some Commonwealth countries, a King's Counsel ( post-nominal initials KC) during the reign of a king, or Queen's Counsel (post-nominal initials QC) during the reign of a queen, is a lawyer (usually a barrister or ...

(or KC) 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 (Lat. ''negligentia'') is a failure to exercise appropriate and/or ethical ruled care expected to be exercised amongst specified circumstances. The area of tort law known as ''negligence'' involves harm caused by failing to act as a ...

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 A solicitor is a legal practitioner who traditionally deals with most of the legal matters in some jurisdictions. A person must have legally-defined qualifications, which vary from one jurisdiction to another, to be described as a solicitor and ...

who represents both in an invidious 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 King's Counsel to advise, and partly because of the insurer's need to maintain good relations with the insured. Although still called KC clauses, such clauses often provide that the advice of a

junior barrister A junior barrister is a barrister who has not yet attained the rank of King's Counsel. Although the term is archaic and not commonly used, junior barristers (or "juniors") can also be referred to as utter barristers derived from "outer barristers ...

of a certain seniority may be taken. Some general liability policies contain a converse version the traditional KC clause; viz., that the insurer does not need to pay out on a claim against the insured ''unless'' a King's Counsel advises that there is no reasonable prospect of successfully defending the claim. KC clauses were considered judicially by

Lord Devlin Patrick Arthur Devlin, Baron Devlin, PC, FBA (25 November 1905 – 9 August 1992) was a British judge and legal philosopher. The second-youngest English High Court judge in the 20th century, he served as a Lord of Appeal in Ordinary fro ...

(in relation to another issue) in ''West Wake Price & Co v Ching'' 9563 All ER 821.

References

{{Reflist Contract clauses English law Insurance law King's Counsel