AIG EUROPE LTD V WOODMAN

[2017] UKSC 18, Supreme Court, Lord Mance, Lord Clarke, Lord Sumption, Lord Reed and Lord Toulson, 22 March 2017

Insurance (solicitors' professional indemnity) - Aggregation clause - Meaning of words "series of related matters or transactions"

Midas wished to develop holiday homes at Peninsula Village, Turkey and at Al Johara, Morocco, and was advised by the International Law Partnership LLP, to advise it on all international property law aspects of the property transactions. A deed of trust was established for each of the sites, which was to hold security over the land to be purchased. Each investor became party to an escrow agreement with TILP as escrow agents to whom the investors' monies were paid. The monies received from investors were not to be paid over by the escrow agent to Midas until, under the "cover test", the promised level of security was in place. Investors were only intended to be admitted to the relevant trust once the cover test had been applied and the monies released from the escrow account. Midas was unable to complete the contracts for the purchase of the land, and both the Peninsula and Marrakech developments failed. Midas was wound up. The trustees, representing 214 investors, commenced proceedings against the solicitors, who were insured by AIG under a policy which complied with the Minimum Terms and Conditions of Professional Indemnity Insurance for Solicitors and Registered European Lawyers. Under the policy, the maximum sum insured for any one claim was £3 million. All claims "arising from similar acts or omissions in a series of related matters or transactions" were to be treated as one claim. AIG sought a declaration that all of the claims were to be aggregated or, in the alternative, that there were sets of aggregated claim, one from each site.