The individuals invited to invest in holiday homes in Turkey and Morocco by Midas International Property plc might, if they had reflected on the myth of King Midas’ golden touch, have had second thoughts before they parted with the price for their undeveloped plots. Perhaps some did but placed confidence in a scheme by which their funds would be held in escrow by solicitor trustees until a promised level of security was in place. The solicitor/trustees are now alleged to have released the funds of 214 investors without the promised level of security, causing an aggregate loss of over £10m.

In AIG Europe Limited v OC320301 LLP [2015] EHWC 2398 (Comm) the solicitors' insurers sought to rely on an aggregation clause to cap the indemnity at £3m. The aggregation clause followed clause 2.5 of the Law Society’s Minimum Terms and Conditions, established by rules made under section 37 of the Solicitors Act 1974. The clause applied if the claims made by the investors were claims “arising from similar acts or omissions in a series of related matters or transactions”. The key question was whether the claims arose from a “series of related matters or transactions”. The insurers contended that they were so related as all the transactions were made according to the “Midas modus operandi”.

Teare J. held that the transactions were not part of “a series of related matters or transactions” as they were with different investors and were not dependent on each other or inter-connected. The aggregation clause therefore did not apply.

The decision is important for those dealing with the Law Society’s Minimum Terms and Conditions but could impact on the construction of other aggregation clauses. Firstly, despite the statutory underpinning of the Law Society’s rules, Teare J. directed himself that he had to construe the clause in a neutral manner rather than to give effect to a policy of public protection and therefore his reasoning cannot be dismissed as being specific to the Minimum Terms and Conditions. Secondly, Teare J. praised an analysis of the meaning of the word “series" given by Menzies J. in his dissent in Distillers v Ajax Insurance Co Ltd (1974) 130 CLR 1 (an Australian case concerning product liability for thalidomide) in which the numbers "1, 2, 3" were given as an example of "a series" because they had the characteristic of order. In Countrywide Assured Group PLC v Marshall [2003] 1 AER Comm 237 (pension mis-selling) Morison J. followed the majority’s wider view of what could constitute a “series” of “occurrences”. In the light of Teare J's approval of Menzies J’s reasoning, those construing aggregation clauses containing the word “series” will need to consider whether Menzies J’s reasoning has been reinvigorated.