Category: Insurance case law · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed June 2026
Court of Appeal decision applying the AIG v Woodman aggregation test to the Ian Paterson clinical negligence claims, holding that all relevant claims aggregated into a single “claim” under the policy.
Spire Healthcare Ltd operated private hospitals at which Mr Ian Paterson, a consultant breast surgeon, treated patients between approximately 1993 and 2011. Mr Paterson was subsequently convicted of multiple counts of wounding with intent, having performed unnecessary and inappropriate surgery on a large number of women. Both NHS and private patients were affected. Spire faced very substantial civil claims from private patients treated at its facilities arising from Paterson’s misconduct.
Spire was insured under a combined liability policy issued by Royal & Sun Alliance Insurance plc (RSA) which provided cover for medical malpractice liability subject to an indemnity limit “for any one claim or series of claims arising out of one originating cause or source”. The policy was in two material respects: the limit applied per claim or series, and the deductible likewise applied per series.
Spire settled the underlying patient claims, broadly divisible into two groups: those who had received unnecessary surgery (broadly mastectomies or wide local excisions that should not have been performed) and those who had received inadequate or “cleavage-sparing” mastectomies, leaving residual breast tissue and a heightened cancer risk. The settlements totalled around £37 million.
Spire sought indemnity. RSA argued that all of the claims arose from a single originating cause — Paterson’s dishonest and reckless conduct — and therefore aggregated into one claim, attracting one limit. Spire contended that the two categories were materially different in nature and motivation (one driven by financial gain via unnecessary procedures, the other by misguided clinical judgement) and so could not share a single originating cause.
At first instance the court found in RSA’s favour on aggregation in part. Spire appealed.
The Court of Appeal had to decide whether the very large body of Paterson claims constituted a single “series of claims arising out of one originating cause or source” within the meaning of the RSA policy, or whether the claims should be split into two or more separate series with distinct originating causes. The court had to apply the now-established principles on aggregation language — in particular the “originating cause” formula recognised as a wide unifying concept since Axa Reinsurance v Field — and consider how those principles interacted with the more recent gloss in AIG Europe v Woodman on “related matters or transactions”. It also had to consider whether the wording demanded a single unifying event or whether a course of conduct of an individual could itself be an originating cause.
The Court of Appeal dismissed Spire’s appeal in part and allowed RSA’s cross-appeal, concluding that all of the Paterson claims arose out of a single originating cause for the purposes of the policy and so aggregated together.
The court held that “originating cause” is the widest aggregation formula commonly encountered in the London market. It reaches behind individual acts or omissions to the underlying source from which losses flow. Where, as here, a single rogue clinician carried out a sustained pattern of inappropriate surgical practice across many years and many patients, his dishonest and/or reckless conduct could properly be characterised as the single originating cause of all of the resulting claims.
The court rejected the suggestion that motive heterogeneity (financial gain in some cases, misjudged clinical thinking in others) split the originating cause. What mattered was the unifying source of the wrongdoing, not the precise mental state in each individual case. The court also drew a distinction between Woodman-type “series of related matters” wording, which requires intrinsic connection between the transactions, and “originating cause” wording, which looks further upstream to the unifying source.
The practical result was that one indemnity limit (and one deductible) applied to the Paterson book, leaving Spire substantially out of pocket on the £37 million settlement.
“Originating cause” aggregation language is the widest of the common formulations and reaches back to the unifying source of loss, not merely to an immediate act or transaction. A sustained course of misconduct by a single individual can constitute one originating cause, even where the conduct involved different categories of wrongdoing with different motivations. Differences in detail between claims do not defeat aggregation if a real common originating source can be identified.
Spire v RSA is the most important recent authority on the “originating cause” aggregation formula and is now routinely cited alongside AIG v Woodman whenever aggregation falls to be argued.
For healthcare providers, the decision is a cautionary tale. Hospitals and clinics relying on a single per-claim limit need to think carefully about whether a single bad actor could exhaust that limit across many patients. Aggregate cover, separate towers or specific Paterson-style endorsements should be considered.
For brokers, Spire reinforces that the choice of aggregation language is among the most consequential decisions in any liability programme. “Originating cause” is broad and generally pro-insurer where there is a single rogue source; “event”-based language is narrower; “series of related” language sits in between, governed by Woodman. Clients should be advised of these differences explicitly.
For the reinsurance market the case is significant because it confirms that English courts will give “originating cause” wording its full reach, which feeds through to facultative and treaty placements protecting medical malpractice and similar long-tail liability.
The decision also has wider relevance to systemic-misconduct claims of all kinds — from rogue financial advisers to abuse by institutional actors — where insurers and insureds will need to consider whether the Spire approach applies to their wording.
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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