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Case law summary · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed
AIG Europe Ltd v Woodman and others [2017] UKSC 18 — Supreme Court of the United Kingdom, 2017.
Citation, court and year verified against the official judgment text published by The National Archives, Find Case Law (https://caselaw.nationalarchives.gov.uk/uksc/2017/18).
The litigation concerned the collapse of two property development schemes operated by The International Law Partnership LLP (TILP), a solicitors’ firm. TILP acted for groups of investors who advanced money to fund holiday-home developments in Turkey and Morocco. Investor funds were held in escrow by TILP as trustee under deeds of trust and were only to be released when sufficient security existed over development land to cover the amounts advanced.
In practice, TILP released the trust monies to the developers when the cover test was not satisfied. Both developments failed. The Turkish scheme had around 214 investors, the Moroccan scheme around 28. Together they claimed roughly £10 million in losses against TILP.
TILP held solicitors’ professional indemnity insurance with AIG Europe Limited, written on the Solicitors Regulation Authority (SRA) Minimum Terms and Conditions. The limit of indemnity was £3 million for any one claim. AIG sought a declaration that all investor claims, or alternatively groups of them, should be aggregated and treated as a single claim, capping its exposure at the per-claim limit.
The relevant clause (MTC clause 2.5(a)(iv)) required aggregation of claims arising from “similar acts or omissions in a series of related matters or transactions”. The argument therefore turned not on whether the acts of TILP were similar (they plainly were — the same release-without-cover pattern) but on whether the underlying matters or transactions were sufficiently “related”.
At first instance Teare J held the transactions were not related, reading the clause narrowly to require dependence of one transaction on another. The Court of Appeal disagreed but introduced its own gloss, requiring the transactions to be “dependent on each other”. Both sides appealed.
The single issue was the proper construction of the phrase “a series of related matters or transactions” in clause 2.5(a)(iv) of the SRA Minimum Terms and Conditions, and in particular the meaning of the word “related”. Should it be confined to transactions which are conditional or dependent on one another, or does it bear a wider meaning capturing any intrinsic connection between the transactions? The answer determined whether thousands of small misselling-type claims under MTC wordings could be aggregated and capped at the minimum cover limit, with obvious consequences for both insurers and unsatisfied claimants.
The Supreme Court unanimously allowed AIG’s appeal in part, rejecting the Court of Appeal’s “dependence” gloss and remitting the question of whether the particular transactions met the test to be decided on the facts.
Lord Toulson, giving the judgment of the court, held that the words “a series of related matters or transactions” should be given their ordinary meaning. There was no warrant for adding qualifying words such as “dependent” or “conditional”. Equally, the phrase was not satisfied by any loose or coincidental connection.
The test the court adopted was whether the matters or transactions were connected in some “real” sense and shared an “intrinsic” relationship with each other — not merely an extrinsic relationship with a third factor such as the same solicitor or the same type of fraud (paraphrased from paras [22]–[24]).
Lord Toulson said the evaluation was “acutely fact sensitive” and that “the matter has to be looked at in the round” (paraphrased). On the facts before it, the court considered there was a strong argument that the Turkish investors’ transactions were related to one another (they shared a common escrow, common trust deeds and a common development), and likewise for the Moroccan investors, but that the Turkish and Moroccan transactions were not related to each other.
Where an aggregation clause uses the language “a series of related matters or transactions”, the word “related” requires an intrinsic connection between the underlying matters or transactions themselves. Neither dependence nor conditionality is required; nor is mere coincidence of solicitor, fraudster or claim type sufficient. The connection must be real and intrinsic, and whether it exists is a fact-sensitive evaluation to be undertaken in the round.
Woodman is the modern starting point for any UK aggregation analysis turning on “related matters or transactions” wording, and its influence reaches well beyond solicitors’ PI.
For PI buyers and brokers the decision is double-edged. It confirms that aggregation under MTC-style wording is broader than mere chain-of-dependence, so a single limit can be eroded faster than insureds might assume. But it also rejects the insurers’ broadest case: a common modus operandi or fraudster is not by itself enough to aggregate. The boundary is fact-specific, which makes professional advice and well-recorded matter management important when claims patterns emerge.
For brokers placing professions business outside the MTC regime — accountants, surveyors, IFAs, design professionals — the case has materially shaped how the market drafts and litigates “originating cause”, “series of related” and “event” clauses. Wordings vary considerably and the choice of aggregation language can determine whether one limit or many respond. Buyers should never assume the SRA position translates to their policy.
For reinsurance and binder business, Woodman reinforces that aggregation language is read with the ordinary tools of contractual construction, not pushed in either direction to suit market preference, and that courts will resist judicial glosses on the parties’ chosen words.
At Apex we routinely walk professional firm clients through the practical consequences of MTC clause 2.5 when reviewing limits and excess-layer structures.
Author: Apex Insurance Brokers, Apex Insurance Brokers Ltd. Authorised and regulated by the Financial Conduct Authority (FRN 724952). Company registration 07014570 (England & Wales). This article is general information, not legal advice. Last reviewed: June 2026.
| Case | Wording construed | What the court held |
|---|---|---|
| AIG Europe Ltd v Woodman [2017] UKSC 18 | “in a series of related matters or transactions” | The matters or transactions must have an intrinsic relationship with each other, not merely an extrinsic relationship with some third factor. |
| Spire Healthcare Ltd v Royal & Sun Alliance Insurance Ltd [2022] EWCA Civ 17 | “consequent on or attributable to one source or original cause” | A traditional formula used to achieve the widest possible effect. A causative link is still required, and causes that are remote or merely coincidental do not qualify. |
| Standard Life Assurance Ltd v Oak Dedicated Ltd [2008] EWHC 222 (Comm) | excess applying to each and every claim “and/or claimant” | The policy did not permit the aggregation of related claims made by separate claimants, so the deductible fell to be applied claimant by claimant. |
Sources: the official judgment texts published by The National Archives, Find Case Law. Aggregation wordings differ between policies and are construed on their own terms; this table summarises what each court decided about the wording before it.
The Supreme Court held that the matters or transactions must have an intrinsic relationship with each other, and not merely an extrinsic relationship with some third factor. A shared solicitor, a shared fraudster or a shared type of claim is not enough on its own.
Aggregation decides whether a group of related claims is treated as one claim or as many. Treated as one, they typically share a single limit of indemnity but attract only one excess; treated as many, each usually carries its own limit and its own excess. The same wording can therefore help or hurt depending on the shape of the loss and the policy terms.
No. The Supreme Court held that whether the necessary intrinsic relationship exists is a fact-sensitive evaluation. The decision fixes the test, not the answer in any particular case, and different aggregation wordings are construed differently.
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