This was not an insurance case, but the judge's comments on one issue are of possible interest to insurers. Eder J was required to interpret the following phrase in a settlement agreement which defined "claims": "arising out of or in connection with the Action or the invoice…referred to in the Action".

The judge accepted that the claim which the claimant was bringing did not "arise out of" the Action or the invoice. However, the defendant sought to argue that "in connection with" had a wider meaning, which included matters which were indirectly connected (relying on the earlier decision of Barclays Bank plc v HMRC [2007], in which the Court of Appeal concluded that a connection may be indirect for the purpose of the definition in that case).

Eder J cautioned that reference to earlier authorities as to the meaning of a particular word or phrase "is often unhelpful and sometimes dangerous", given the different context in which the word or phrase may have been used. However, he added that: "Here, it is sufficient to say that, as a matter of language, the words "in connection with" are plainly of wider scope than the words "arising out of". On the facts, he accepted that the proceedings being brought were "connected with" the Action and invoice, and therefore caught by the settlement agreement.

COMMENT: These two phrases commonly appear in aggregation clauses in (re)insurance policies and so Eder J's general comment that linguistically "in connection with" is wider than "arising out of" is of interest. The use of the word "or" in the phrase is also probably of relevance. It will be recalled that in the recent case of ARC Capital v Brit Syndicates (see Weekly Update 05/16), where the phrase in question was "arising from or in any way involving", Cooke J confirmed that "arising from" meant "proximately caused by" or "directly caused by" and went on to find that "in any way involving" therefore meant "indirectly caused by" in this context. In that way, "the two phrases are given recognisably distinct meaning and the clause hangs together as a whole".