On 22 March 2017, the Supreme Court handed down judgment in the case of AIG Europe Limited v Woodman and others, in which they considered the meaning of the words 'a series of related matters or transactions' within an aggregation clause in a Solicitor's Professional Indemnity policy.


Two sets of claims were brought against a firm of solicitors by groups of investors whose funds had been lost due to the solicitors' failure to establish that sufficient security was in place before releasing the sums to their client, a developer, to fund separate projects in Morocco and Turkey. Following release of the funds, all further investment in the projects was subsequently shut down by regulators before the property which was to stand as security in the transactions was able to be purchased.

Following the loss of funds claims were brought by a total of 214 claimants, totalling around £10 million. The solicitors' PI policy had a limit of £3 million per claim, and permitted the aggregation of claims in circumstances where all claims arise from 'similar acts or omissions in a series of related matters or transactions'.

'A series of related matters or transactions'

It was agreed that the transactions behind the claims were 'similar', however the investors disputed whether they constituted 'a series of related transactions' as AIG had submitted, and argued that all the claims pertained to separate, unrelated transactions, or at the very least those which related to the project in Turkey were unconnected with those which related to the project in Morocco. The issue turned on the constructions of the words 'in a series of related matters or transactions'.

The Court of Appeal had previously held that there must be an 'intrinsic' relationship between the transactions, rather than a relationship with some outside connecting factor. The Supreme Court rejected this introduction of further qualification into the aggregation provision.

Following the reasoning of Rix LJ in Scott v Copenhagen Reinsurance Co (UK) Ltd [2003] Lloyd’s Rep IR 696, the Supreme Court held that determining whether the transactions were related was fact dependant. The Court placed particular emphasis on the policies' lack of any further particular criteria in the aggregation wording, acknowledging the insurer's submission that the clause may fall to be applied to a huge variety of factual situations not currently capable of prediction, and that no further meaning should be construed from the existing wording.

Simply put, in order for the claims to be aggregated it had to be shown that there was some interconnection between them, that they 'in some way fit together'. Lord Toulson described determination of whether transactions are related as 'an acutely fact sensitive exercise'.

In this case, the claims which related to the Morocco investments could be said to be connected in significant ways due to the shared objective of the underlying development project and the legal structure of the trusts under which the investors were co-beneficiaries. Similarly, the claims regarding the Turkey investment could be aggregated in the same way. The claims relating to the two separate projects, however, could not be aggregated as merely a 'striking similarity' between the claims is not enough. Notably, the court came to this view 'on the facts as they currently appear' and offered the parties the opportunity to have the case remitted to the Commercial Court for a more detailed analysis of the facts.

Therefore what this decision highlights is that aggregation firmly remains an entirely fact specific exercise of judgment. In determining whether claims should be aggregated, the courts will not look exclusively from the viewpoint of on party or another but will make a judgment, as they did in this case, 'objectively taking the transactions in the round'.