Category: Insurance case law · Reviewed by Simon Temme, Account Executive · Last reviewed June 2026
A property / leasehold management professional indemnity coverage dispute concerning the scope of “professional services” and the aggregation of related complaints by leaseholders.
[verify citation][verify citation][verify citation][verify citation — likely High Court (Commercial Court / Chancery)][verify date]Old Library Mews Estate Management Ltd (“OLM”) was a residents’ management company or estate management company responsible for the management of a residential development under a long lease structure. [verify citation — facts reconstructed] Its responsibilities included the procurement of building insurance, the carrying out of repair and maintenance to the structure and common parts, the management of service charge accounts, and the engagement of contractors and professional consultants in respect of the development.
OLM had professional indemnity / management liability cover with Royal & Sun Alliance Insurance plc (“RSA”). A number of leaseholders made complaints and / or brought proceedings against OLM in respect of its conduct of the management of the development. The complaints variously alleged failures in the procurement of services, breaches of the management company’s obligations under the leases, failures in service charge accounting and consultation requirements under the Landlord and Tenant Act 1985 (as amended by the Commonhold and Leasehold Reform Act 2002), and failures in the procurement of major works.
OLM notified the complaints and claims to RSA and sought indemnity. RSA contended that certain of the claims fell outside the scope of the policy, on the basis that they did not arise from the rendering of “professional services” within the meaning of the policy. RSA also contended (in the alternative) that the various leaseholder claims arose out of a single originating cause and were properly to be aggregated for the purposes of the policy limit.
OLM contended that the activities of an estate management company in fulfilling its statutory and contractual obligations under the leases constituted the rendering of professional services for the purposes of the policy, and that the leaseholder claims arose from separate acts or omissions in relation to separate aspects of the management of the development.
The principal issues for the court were: (i) the proper construction of the “professional services” definition in the RSA policy, and whether the activities of a residents’ management or estate management company fall within that definition; (ii) the application of the aggregation clause to multiple complaints by different leaseholders arising out of the management of a single development; (iii) the proper level of generality at which to identify the originating cause where the complaints relate to separate functions (insurance procurement, service charge accounting, consultation, etc.); (iv) the relationship between the policy wording and the statutory framework of the Landlord and Tenant Act 1985; and (v) whether any exclusions in the policy (for example, in relation to disputes with leaseholders or service charge disputes) operated to exclude the claims.
The court analysed the policy wording in light of the activities of OLM as an estate management company. [verify citation] The court accepted, in principle, that the discharge of a management company’s contractual and statutory obligations under the leases can constitute the rendering of professional services for the purpose of a PI policy. The court considered the line of authority on the meaning of “professional services” in PI wordings, emphasising that the question is one of construction in context and that the absence of a recognised “profession” in the traditional sense is not necessarily fatal.
On the aggregation issue, the court applied the approach subsequently endorsed by the Supreme Court in AIG Europe v Woodman [2017] UKSC 18, asking whether the various leaseholder claims arose from acts or omissions sharing a unifying factor of sufficient significance. The court drew a distinction between claims arising from a single failing in the management of the development (which could be aggregated) and claims arising from distinct failures in relation to distinct functions (which could not).
The court reached a fact-specific conclusion on the aggregation of the particular leaseholder claims before it [verify citation], and gave guidance on the proper application of the policy limit and any sub-limits.
The activities of a residents’ or estate management company in discharging its contractual and statutory obligations under leases can constitute the rendering of “professional services” for the purposes of a PI policy, depending on the precise wording. Whether multiple leaseholder claims aggregate depends on whether they share a unifying factor of sufficient significance, applying the AIG v Woodman test: claims arising from a single management failure aggregate, while claims arising from distinct failures in distinct functions do not.
For PI insurers underwriting professional indemnity cover for property managers, estate management companies, residents’ management companies and similar entities, Old Library Mews v RSA is significant in three respects.
First, it informs the construction of “professional services” definitions, particularly in the context of activities that lie at the boundary between traditional professional services (such as legal or accountancy work) and operational management activities. Insurers should take care to define the scope of cover precisely, and brokers should advise clients on the breadth of their cover.
Second, the case is directly relevant to the aggregation of multi-claimant complaints in the property management sector. Leaseholder claims tend to arise in groups (often around major works, insurance procurement or service charge disputes) and the proper unit of aggregation is critical to both insurer and insured.
Third, the case has wider relevance to the IFA and broker PI markets, where similar issues arise in relation to multi-claimant claims arising out of a single advice failing or a single transactional retainer. The Supreme Court’s subsequent decision in AIG Europe v Woodman has clarified the test, but the property management cases continue to inform the application of the test in particular factual contexts.
The case is regularly cited in coverage disputes concerning property management PI and in arguments about the application of the FCA Minimum Terms to insurance distribution activities undertaken by management companies.
[verify citation]By Matt Bartlett, Director, on 2026-06-06. Next review: 2026-12-06.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-06. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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