Aggregation of claims against solicitors’ insurance?
28 Oct 2020
According to a judgment handed down today, Guide Dogs for the Blind v Box, Alexander Learmonth, representing four charities, successfully fought off an argument by a solicitors’ firm’s professional indemnity insurer that all claims against the firm arising out of the thefts of one of the partners should be aggregated for the purposes of the single limit of indemnity under the policy. If the argument had succeeded, it would have left many victims uninsured.
Linda Box was senior-partner of the long-established and reputable Wakefield firm of Dixon Coles & Gill. But in 2016 it was found that over several years she had stolen millions of pounds from estates of which she was executor, as well as from the Diocese of Wakefield, for which she was first Registrar and then Chancellor. She was sent to prison, but the losses to the firm’s clients far exceeded the amount she was able to repay, and the £2 million limit on the firm’s insurance was used up. The insurer sought to argue that because all the thefts were committed by a single person, and that sums from some clients and estates had been used to pay other clients or beneficiaries, a process the insurer called ‘teeming and lading’, the thefts all amounted to a single course of conduct – “a series of related acts or omissions” – which would have entitled the insurer to aggregated the claims under the SRA’s Minimum Terms and Conditions, and thereby to cap its liability at a single limit of indemnity, leaving many of Box’s victims uninsured.
Alexander Learmonth, instructed by Wilsons, acted for the four charities who were the residuary beneficiaries of one of the estates Box stole from, in an application for summary judgment for a declaration that such aggregation was impermissible. The application was heard along with a similar application brought by the Bishop and Diocese. HHJ Saffman in the Leeds District Registry of the High Court today allowed the charities’ application, ruling that no amount of teeming and lading would be a good ground for aggregating thefts from different estates for the purposes of the insurance.
Permission has been granted for an appeal to the Court of Appeal on the aggregation point, and also on the question whether a limitation period applies to claims against the partners of fraudulent trustees.
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