The current economic climate has resulted in both a reduction in transactional activity and an increase in purchasers reviewing completed deals to see if they really got what they intended. This is borne out by the increased level of warranty claims being brought before the courts in Ireland.
Recent high profile warranty claims, such as the proceedings brought by Marketspreads Limited against Fergus Rice and Brian O’Neill, and the Towercom v. Eircom Ltd litigation, have increased awareness of the possibility of bringing warranty claims. They also demonstrate that purchasers are actively taking steps to litigate matters once issues arise that are potentially covered by sellers’ warranties. Warranty and indemnity insurance is becoming increasingly popular in corporate transactions in this jurisdiction, and at a broader level, the increase in warranty claims could be seen to be part of an overall trend of increased litigation and claims against insured parties.
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