In Spire Healthcare v Royal & Solar Alliance Insurance coverage Ltd [2022] EWCA Civ 17, the Court docket of Attraction reversed the primary occasion choice of Decide Pelling QC holding that the 2 units of claims in query had in widespread a unifying issue, such that they need to be aggregated for the needs of the aggregation clause within the coverage. The web impact of this choice was that the insured’s declare was restricted to the £10m per declare restrict of the coverage (moderately than the £20m combination restrict).
The case involved claims made towards Spire Healthcare in respect of the conduct of a marketing consultant breast surgeon, Ian Paterson. The claims have been categorised into two teams: people on whom Dr Paterson had carried out incomplete whole mastectomies and people on whom Dr Paterson had carried out pointless surgical procedures. Dr Paterson was convicted of legal offences, and Spire Healthcare settled the claims made towards it for roughly £27 million. It was accepted by Royal & Solar Alliance Ltd (RSA) that Spire was liable in respect of the settlement. The problem between the events involved the aggregation clause within the coverage and whether or not the underlying claims needs to be aggregated and handled as one declare or handled as two.
At first occasion, Decide Pelling QC held that the claims needs to be handled as two claims, such that RSA was accountable for the complete £20m combination restrict of the coverage. RSA appealed.
The Court docket of Attraction first set out the related ideas referring to the aggregation clause within the coverage (which allowed for aggregation in respect of all claims “consequent on or attributable to at least one supply or unique trigger”, in relation to which there was little dispute between the events. The place to begin was that the language used within the clause in situation was a well-know formulation meant to have the widest doable aggregating impact (as regards to AIG Europe Ltd v OC320301 LLP [2017] 1 All ER 143; reference was additionally made to the well-known feedback of Lord Mustill in Axa Reinsurance (UK) plc v Discipline [1996] 1 WLR 1026 – “A trigger is to my thoughts one thing altogether much less constricted. It may be a seamless state of affairs; it may be the absence of one thing occurring. Equally, the phrase ‘originating’ was in my opinion consciously chosen to open up the widest doable seek for a unifying issue within the historical past of the losses which it’s sought to combination”). The Court docket of Attraction additionally famous that previous authority made it plain that in contemplating whether or not losses might be aggregated, one ought to take into account whether or not there was a single “unifying issue” widespread to the claims in query (Countrywide Assured Group plc v Marshall [2003] 1 All ER (Comm) 237); on this context, “unique trigger” didn’t imply proximate trigger (a “significantly looser causal connection” was permissible: Beazley Underwriting Ltd v Vacationers Firms Inc [2012] 1 All ER (Comm) 1241), however there have to be some causative hyperlink and there needed to be some restrict to the diploma of remoteness that’s acceptable to ensure that losses to be aggregated (see American Centennial Insurance coverage Co v INSCO Ltd 1996] LRLR 407 and Cultural Basis v Beazley Furlonge Ltd [2018] Bus LR 2174).
Making use of these ideas to the info, the Court docket of Attraction held that it was acceptable to combination the 2 teams of claims for the needs of the aggregation clause within the coverage. The primary occasion choose had erred in that he did not undertake a large seek for a unifying issue within the historical past of the claims, as he was required to do by the authorities referred to above. The proper strategy was summarised within the Court docket of Attraction judgment as follows: “As a matter of unusual language, and making use of the ideas relevant to aggregation clauses expressed in these large phrases, it appears to me to be plain that all or any of (i) Mr Paterson, (ii) his dishonesty, (iii) his observe of working on sufferers with out their knowledgeable consent, and (iv) his disregard for his sufferers’ welfare will be recognized both singly or collectively as a unifying issue within the historical past of the claims for which Spire have been liable in negligence, no matter whether or not the sufferers involved fell into Group 1 or Group 2 (or each).”
In the end, this case was a reasonably simple utility of the related, effectively established, ideas that are utilized to cause-based aggregation wordings. Nevertheless, the case does emphasise the truth that points which come up on this context are sometimes very fact-dependent, which might generally result in difficulties within the correct interpretation of the regulation because it applies to aggregation.
Article authored by Mark Everiss and Sam Tacey