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ENGLISH INSURANCE LAW

Lloyd's Maritime and Commercial Law Quarterly

ENGLISH INSURANCE LAW

Margaret Hemsworth*

156. Baines (The Right Reverend Nicholas Baines, Lord Bishop of Leeds) v Dixon Coles & Gill 1
Professional indemnity—solicitors—aggregation
The Court of Appeal considered the application of current case law to aggregation of claims brought against a firm of solicitors in relation to the theft of client money. The theft had been perpetrated by one partner over a number of years. The insurance policy had a limit of £2m for any one claim with an aggregation clause which specified that for the purposes of aggregation all claims arising from one series of related acts or omissions were to be regarded as a single claim. The policy had been written in accordance with the minimum terms and conditions (MTC) required by the Solicitors Regulation Authority and the terms of the policy were stated to be subject to the minimum terms. The thefts totalled well in excess of £4m, the bulk of which occurred over a five-year period between 2010 and 2015. The insurer, having already paid out £2m, declined to pay any further sums and did so in reliance on the application of the aggregation clause. At first instance the claim to aggregate was rejected and so the insurer appealed.
The effect of the MTC was that, while the solicitor guilty of the thefts was not covered by the policy, co-partners were. Liability was subject to the limit of cover of £2m but for that purpose it was provided that:
“(i) All Claims against any one or more Insured arising from:
  • (a) one act or omission;
  • (b) one series of related acts or omissions;
  • (c) the same act or omission in a series of related matters or transactions;
  • (d) similar acts or omissions in a series of related matters or transactions;
and
(ii) All Claims against any one or more Insured arising from one matter or transaction
will be regarded as one Claim.2.”
On appeal, the insurer contended that the thefts were all “claims arising from … one series of related acts or omissions” and as such fell to be aggregated with the effect that the limit of cover had already been reached. The contention required analysis and application
* Senior Lecturer, University of Exeter.
1. [2021] EWCA Civ 1211; [2021] Lloyd’s Rep IR 410 (CA: Moylan, Phillips, Nugee LJJ); affg [2020] EWHC 2809 (Ch); [2021] Lloyd’s Rep IR 344 (Ch: HHJ Saffman sitting as a Judge of the High Court).

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