SPIRE HEALTHCARE LTD V ROYAL & SUN ALLIANCE INSURANCE PLC

[2016] EWHC 3278 (Comm), Queen's Bench Division, Commercial Court, His Honour Judge Waksman QC, 19 December 2016

Insurance (liability) - Aggregation of losses - Construction of Proviso - Whether limit of indemnity for linked claims was £10 million or £20 million - Construction of contribution clause - Whether deductible applied to each claim or to aggregate of claims

The assured faced 708 complaints alleging medical negligence on the part of a surgeon working at its hospitals between 2004 and 2011. 86 of those had resulted in legal proceedings. The assured had a combined liability insurance policy, and section 4 covered medical negligence. The schedule to the policy stated that the sum insured "any one claim" was £10 million, with a total sum of £20 million being payable for "all damages costs and expenses arising out of all claims". Spire had to make a contribution towards the losses, amounting to "£25,000 each and every claim", capped at £750,000. Proviso 5(a) stated: "The total amount payable ... in respect of all damages costs and expenses arising out of all claims ... attributable to one source or original cause ... shall not exceed the Limit of Indemnity stated in the Schedule". Proviso 5(b) stated: "the total amount payable ... in respect of all damages arising out of all claims ... irrespective of the number of sources or original causes of such claims shall not exceed the appropriate Limit of Indemnity stated in the Schedule".