The case of Standard Life Assurance v Oak Dedicated Ltd & Ors  EWHC 222 concerned an action brought by the insured against its underwriters, who had subscribed to a policy which provided the insured with liability cover of £75million in excess of £25million. The insured claimed an indemnity under the policy, which contained a provision permitting the aggregation of claims arising from one originating cause or source. The insured aggregated 97,000 small claims and sought to recover the full £75million excess of £25million. In their defence, underwriters contended that even if the individual claims did arise from a single originating cause or source, because the policy schedule and slip contained the wording "excess: £25million each and every claim and/or claimant", a separate excess of £25million applied to each individual claim because they were made by different individual claimants.
In deciding how much weight should be attached to the slip and schedule, the Court confirmed the orthodox position that where a contract of insurance is initially contained in summary form in a slip, the contract is to be found exclusively in any later full policy wording. However, on the facts, the Court held that the slip should be used as an aid to the proper approach to construction of the policy because the words "and/or claimant" were likely to have been regarded by the parties as of relevance to the extent of the substantive obligations undertaken by underwriters.
In considering whether the contract was intended to impose a per claimant excess, the Court concluded that an objective observer would reasonably believe that the principal reason why the insured required professional indemnity cover at a catastrophe level was to protect against the risk of a series of such claims from a common cause or source. However, the Court was still faced with the fact that the wording in the slip and schedule was clear and no witness at trial could think of any plausible purpose of its inclusion other than the attempted achievement of a per claimant excess. The Court therefore concluded that the policy did not permit the aggregation of related claims made by separate claimants.
This decision should act as a warning to the insurance industry that even where a policy does not specifically contain a provision, if the slip and ancillary documents indicate a clear intention of the parties, then a Court is entitled to look to these as an aid to the construction of the policy. Furthermore, if an excess provision refers to "and/or claimant", unless evidence is shown to the contrary, this will be construed as an attempt to procure that the excess operates by reference to each and every claimant and, in such situations, the efficacy of the aggregation clause for the insured may be weakened.