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AIG Europe Limited v OC320301 LLP and Ors

14th Apr 2016

The Court of Appeal has given judgment in AIG Europe Limited v OC320301 LLP and Ors [2016] EWCA Civ 367, in an expedited appeal from the judgment of Teare J [2015] EWHC 2398 (Comm). The judgment concerns the true construction of the aggregation provision contained in clause 2.5 of the Minimum Terms and Conditions (“MTC”) annexed to the Solicitors Indemnity Insurance Rules 2013, which must be incorporated into all solicitors’ indemnity policies.

Until these proceedings, the aggregation wording in Clause 2.5 of the MTC had never previously been considered by the Courts. Its meaning is a matter of importance to the solicitors profession and their clients, to the insurance industry and to the Law Society.

The Law Society (acting in its regulatory capacity as the Solicitors Regulatory Authority) intervened in the appeal by providing written submissions, settled by Dominic Kendrick QC, David Edwards QC and Tim Jenns, and oral submissions, presented by David Edwards QC.

At first instance, Teare J had held that the words “in a series of related matters or transactions” meant that the matters or transactions had to be dependent on each other in order to aggregate.

The Court of Appeal held that Teare J was wrong on that issue. It concluded, endorsing the submissions of the Law Society (but rejecting the submissions of both the Appellants and the Respondents on the true construction of the wording), that the true construction of the words “in a series of matters or transactions” is that the matters or transactions must have an intrinsic relationship with each other, not an extrinsic relationship with a third factor.

The case has been remitted to the High Court for further determination, in light of the Court of Appeal’s judgment.

The full text of the judgment can be found here.

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