Professional Liability Guide

CHAPTER 11 – AGGREGATION CLAUSES

The Court again considered the context of the clause – namely, an aggregation clause in a solicitors’ insurance. With this in mind, the natural meaning of ‘a series of related matters or transactions’ was found sensibly to be a series of matters or transactions that, in some way, depend on each other. The Court, therefore, found the claims were not to be aggregated. Although they did arise out of similar acts or omissions, they did not meet the additional requirement of being in a series of related transactions because the terms of the transactions were not conditional or dependent on each other. On appeal, this interpretation was found to be incorrect. The correct view was that there had to be a connection between the transactions themselves for the transactions to be ‘ related ’. It followed that there had to be an ‘ intrinsic ’ connection rather than a remote relationship. As an example, transactions will unlikely be regarded as related simply because they relate to the same parcel of land in one of the countries where the developments occurred. Alternatively, if the transactions also refer to or envisage each other, they may be related and the clause may respond. The case was ultimately remitted to the Commercial Court as the factual circumstances surrounding the contracts between the law firm and the investors and how the scheme operated were critical to determining whether the aggregation clause applied. At the time of this publication, the Commercial Court has not yet reconsidered the matter. When it does, however, it will be required to apply the Court of Appeal’s ‘ intrinsic connection ’ test and that test will probably be instructive for future interpretation of aggregation clauses requiring matters or transactions to be ‘ related ’.

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© Carter Newell 2023