Mediation law in practice

 

“Is there a duty for brokers – as trustees of the customer – to continuously review the risk situation of their customers? Does such a duty also exist for tied sales?”

 

In the case of tied sales – in former times one said agent, today representative – such a duty does not exist unless the “need for advice” more or less imposes itself. It can be an advantage for customers to be advised by the “exclusivity”, because the mostly bonide insurer is liable for their mistakes. Whether the broker has a duty to review the risk on an ongoing basis depends on the specific agreements he has made with the client. Brokerage agreements distributed “as a model” by some brokerage associations hardly take this into account. The consequence is that, in case of doubt, the broker is liable for things that he is in fact unable to provide. It is important for the broker to understand that his or her custodial liability is the practical maximum liability. The administrator is liable solely because he has his own interest (e.g. commission, fee) in the transaction. Appearing as a financial expert, financial professional or “financial broker” is particularly fraught with liability. Professional supervision and professional licensing also argue for personal liability. It follows from the case law of the Federal Court of Justice that liability towards an unlimited number of “third parties” exists, but is also unlimited in terms of amount. It follows from this that every insurance or financial broker must necessarily operate a quality and risk management system. Whoever spares himself this effort can suddenly lose business and private assets. By the way: A “usual” VSH coverage is by no means sufficient to have the risks adequately insured. Good brokers know this because they are experts in insurable and, above all, uninsurable risks.

 

Dr. Johannes Fiala

(DHBW Newsletter 11/2009)

Courtesy ofwww.dhbw-heidenheim.de.

Our office in Munich

You will find our office at Fasolt-Strasse 7 in Munich, very close to Schloss Nymphenburg. Our team consists of highly motivated attorneys who are available for all the needs of our clients. In special cases, our law firm cooperates with selected experts to represent your interests in the best possible way.


About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
»More about Dr. Johannes Fiala

On these pages, Dr. Fiala provides information on current legal and economic topics as well as on current political changes that are of social and/or corporate relevance.

Arrange your personal appointment with us.

Make an appointment / call back service

You are already receiving legal advice and would like a second opinion? In this case please contact Dr. Fiala directly via the following link.

Obtain a second legal opinion

The first telephone call about your request is free of charge.