Insurance Law Monthly

Aggregation clauses are more or less standard in liability policies. They have two functions. First, they determine how many deductibles the assured has to bear where a series of losses arise from similar or connected events: aggregation of losses into a single deemed loss requires the application of only one deductible.

It is over two years since the CJEU’s decision on the scope of compulsory third-party motor insurance (CTPMI) in Vnuk v Zavarovalnica Triglav Case C-162/13 [2015] Lloyd’s Rep IR 142. The case involved an accident in Hungary, where a tractor and a trailer collided with a ladder on a private farm, causing personal injury to the claimant.

Under CPR 25.13 the court may make an order for security for costs in favour of a defendant if: it is just to do so, and; where the claimant is a company, there is reason to believe that it will not be able to pay the defendant’s costs if ordered to do so. A question that has arisen on a number of occasions is whether an order for security for costs should be made if the claimant’s action is being funded by after the event (ATE) insurance.

The decision of Jay J in R (Aviva Life & Pensions (UK) Ltd) v McCulloch [2017] EWHC 352 (Admin) is the first on the application of FOS principles to insurance policies. It is clear from the decision that the FOS has a wide discretion as to how to decide cases, and that the courts have a very limited jurisdiction to overturn FOS rulings on their merits. The issue in Aviva was largely procedural, but the judgment contains vital guidance for the future.