Earlier this week, the Supreme Court overturned the Court of Appeal’s judgment in AIG Europe Limited v Woodman and others UKSC 2016/0100, ruling on how claims arising from similar acts or omissions in a series of related matters or transactions should be aggregated for the purposes of a per claim limit. The court held that whilst there must be some connection between the matters or transactions in order for claims to be aggregated, each case will turn on its specific facts.


Midas was a UK property development company which intended to build holiday resorts in Turkey and Morocco. Both developments were to be financed by investors who paid money under an escrow agreement and Midas’ solicitors, the International Law Partnership LLP (“TILP“), were to act as escrow agents. TILP were not to release the funds from the escrow accounts until adequate checks had been made to ensure that security was in place. The investors were also beneficiaries under a deed of trust for the development in question.

Over the course of 2007 and 2008, funds were released from the escrow accounts and both developments subsequently failed. The investors were unable to realise their assets and the trustees of both trusts brought proceedings against TILP seeking damages of £10 million.

TLIP had professional indemnity insurance with AIG Europe which was subject to a per claim limit of £3 million. The policy was also subject to clause 2.5 of the Minimum Terms and Conditions of Professional Indemnity Insurance for solicitors in England and Wales (“MTC“) which provided that:

when considering what may be regarded as One Claim for the purposes of the limits … all claims against one or more insured arising from … similar acts or omissions in a series of related matters or transactions … will be regarded as One Claim.”

AIG commenced proceedings seeking a declaration that the investors’ claims against TILP should be aggregated pursuant to MTC clause 2.5.

First Instance

In August 2015, Mr Justice Teare refused AIG’s application. He found that the words “a series of related matters or transactions” referred to transactions which were “dependent” on each other, or in some way inter-connected. It followed that the underlying claims were not aggregated as the transactions were not conditional or dependent on each other, although the claims arose out of similar acts or omissions.

Court of Appeal

The Court of Appeal rejected the first instance decision and its “dependency” criteria; this was considered to be too narrow an interpretation. However, the court also rejected AIG’s argument that any degree of relatedness between the transactions was enough for claims to be aggregated; this was an “impossibly” wide construction, especially as clause 2.5 differed from the wording typically used to formulate wider aggregation clauses. The court held that “a series of matters or transactions” are those matters or transactions which have an “intrinsic relationship” with each other.

Supreme Court

The Supreme Court applied a common-sense approach. It held that MTC clause 2.5 has two separate limbs, each of which must be satisfied for it to apply.

First, the claims must arise from “similar acts or omissions”. The fact that this is satisfied was not in dispute in this case.

Secondly, the claims must be a “series of related matters or transactions”. The Supreme Court held that the Court of Appeal’s use of the term “intrinsic” to define the relationship between the transactions was not “necessary or satisfactory”. MTC clause 2.5 uses the term ‘related’ which implies that there must be some form of interconnection between the matters or transactions so that they fit together in some way. This will turn on the specific facts of each case.

In addition, the Supreme Court found that the application of the aggregation clause is to be judged objectively, taking the transactions in the round; it is not to be judged from the perspective of a particular party.

The actual decision was remitted for further investigation of the facts. However, on the assumed facts of this case, the claims of each group of investors did arise from acts or omissions in a series of related transactions. The legal structure of the transactions was similar and they shared the common objective of the completion of a development project.

On the assumed facts of this case, the court declined to allow aggregation of the transactions entered into by the Turkish investors and the Moroccan investors. They related to different sites, and the different groups of investors were protected by different deeds of trust over different assets.


The Supreme Court has applied a common-sense interpretation of the aggregation claim at hand, stripping away the judicial clarifications of both the First Instance Court and the Court of Appeal.

The judgment does not provide full clarity on when claims may be aggregated. Such cases are invariably factually complex, and it is likely that future cases will continue to turn on the particular facts at hand.

However, the judgment may encourage those responsible for the MTC to consider more precise wording. Precisely drafted policies will provide the greatest comfort to parties seeking resolutions to similar disputes in the future.