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Spire Healthcare Ltd v Royal & Sun Alliance Insurance Plc [2022] EWCA Civ 17

Spire Healthcare is the most recent senior-court authority on aggregation under "originating cause" wording and the most important post-Woodman application of aggregation principles to mass-claim mass-loss facts. Where AIG v Woodman concerned a small group of related transactions in one firm, Spire Healthcare concerned more than 750 patient claims arising from the criminal conduct of a single rogue surgeon, Ian Paterson, over a 14-year period. The Court of Appeal held all 750+ claims aggregated into one occurrence under the "originating cause" trigger in Spire's general liability tower. The decision will be cited for years to come whenever an insurer or insured argues whether a rogue-employee mass-claim event is one occurrence or many.

This article is Spoke 2 of the Apex hub on aggregation and series clauses in PI insurance.

Plain English explanation

Mr Paterson was a consultant breast surgeon. Between 1997 and 2011 he performed unnecessary and inappropriate operations on hundreds of private patients at Spire's hospitals. He was convicted of multiple counts of wounding with intent in 2017 and sentenced to 20 years' imprisonment. Civil claims against Spire by his victims ran into hundreds of millions of pounds. Spire's insurers, RSA, accepted cover but argued that all of the claims aggregated as a single "originating cause" — Paterson's pattern of criminal conduct — and were therefore subject to a single aggregate limit (£10 million in the year). Spire said claims should be treated as individual occurrences, each within the per-occurrence limit but cumulatively far exceeding the aggregate. The dispute was about whether the aggregating wording applied to the cause (one Paterson, one aggregate) or to the events (hundreds of operations, no aggregation).

The Court of Appeal sided with RSA. All Paterson claims aggregated. Spire was capped at the single aggregate limit for the relevant policy years.

The case: facts and procedural background

Spire operates a chain of private hospitals in the UK. Paterson worked at two Spire hospitals (formerly BMI Healthcare) from 1997 onwards. He had a parallel NHS practice and, in his Spire practice, performed thousands of operations between 1997 and 2011. A small but significant proportion of those operations were unnecessary or contraindicated. Paterson was struck off in 2017 and convicted of 17 counts of wounding with intent and three further counts of unlawful wounding.

Civil claims followed in their hundreds. Spire ultimately faced more than 750 claims. The claims were funded in part through a £37 million settlement scheme. Spire turned to its public/products liability insurance with RSA.

The policy covered each occurrence up to a limit of £20 million and in the aggregate up to £20 million for the policy year 2007/8. (Other years had different but comparable structures.) The aggregating wording said claims aggregated where they "consisted of or originated from one source or original cause". This is the "originating cause" formulation we describe in Spoke 3 on Lloyds TSB and contrast with the SRA "matters or transactions" wording in Spoke 8.

At first instance ([2020] EWHC 3299 (Comm)), HHJ Pelling QC held the claims did not aggregate. The Court of Appeal reversed.

The legal issue

The Court of Appeal had to decide whether all of the patient claims against Spire "consisted of or originated from one source or original cause". The case turned on construction of that phrase against the unusual facts (one surgeon, one workplace, one pattern of misconduct, hundreds of victims over 14 years).

Three competing constructions were on the table:

Spire's case: each operation was its own occurrence. Causes were individual: a surgeon's decision in respect of a specific patient at a specific time on the basis of specific clinical information. Common factors (Paterson; Spire; the hospitals) were background not cause.

RSA's case: the originating cause was Paterson's pattern of misconduct. Each operation was a downstream manifestation of the same underlying cause. The aggregating language was, on its face, broad and intended to capture exactly this kind of pattern.

A middle ground: clusters by year or by anatomical procedure type, but no global aggregation.

The Court of Appeal's decision

Andrews LJ gave the leading judgment. The Court held unanimously that all of the patient claims aggregated as a single original cause. The reasoning had four strands.

First, "originating cause" is wider than "proximate cause". The aggregating wording does not require an immediate causal connection between the cause and each individual claim. It requires that the claims "originate from" or "consist of" a single source.

Second, Paterson's pattern of operating on patients without proper clinical justification was capable of being a single "original cause". The fact that the pattern manifested in many separate operations on many different patients did not break the causal chain back to the pattern itself.

Third, the test under "originating cause" wording is "but for" — but for the pattern of misconduct, would the claims exist? The answer was no.

Fourth, the Woodman test under "series of related matters or transactions" is a different test and was not directly engaged. But the underlying logic — that you ask whether there is a "real" connecting factor between the claims — is consistent. Under "originating cause", that connecting factor is the cause; under "series of related matters or transactions", it is the matters or transactions themselves.

The Court rejected Spire's argument that aggregation under the originating-cause trigger required something more akin to a single event. A pattern of conduct over 14 years was a single cause for the purposes of the wording. The Court was alive to the consequence — Spire's claim ceiling was £10 million in the relevant year rather than the cumulative limits across hundreds of occurrences — and acknowledged it was hard on the policyholder. But hard cases do not make new wording. The contract was the contract.

The principle distilled

Three principles emerge from Spire Healthcare that bear directly on PI buyers in 2026.

"Originating cause" is broader than "matter" or "transaction". A common pattern of conduct, common methodology or common systemic failure can satisfy the originating-cause test even where it would fail the Woodman "matters or transactions" test. PI buyers whose policies use originating-cause wording should expect wider aggregation than buyers whose policies use Woodman wording.

Length of time does not break the chain. Paterson operated over 14 years. The Court of Appeal accepted that the pattern was still a single cause. PI buyers cannot assume that a cluster spread over many years will fragment into multiple aggregations purely because of the time period.

The aggregation question is decided by the wording, not by gut feel. The Court was clear: it was construing the words "consisted of or originated from one source or original cause" and would not import a stricter test simply because the policyholder's exposure was large.

Worked example with numbers

Take a regulated firm with a £2 million primary PI policy and a £25,000 excess. Imagine 30 advice claims spread over a four-year period, all arising from the same misunderstanding of an FCA handbook rule.

Under "matters or transactions" / Woodman wording: the firm argues each advice event is a separate matter. The matters are not "related in a real way" — different clients, different products, different time periods. Woodman would probably fragment these into 30 separate claims (or smaller clusters by client or product). The firm pays 30 × £25,000 excess = £750,000 in excesses but in principle has £2 million of cover per claim.

Under "originating cause" / Spire wording: the systemic misunderstanding of the FCA rule is the originating cause. All 30 claims aggregate. One £25,000 excess. One £2 million limit. If the aggregated loss is £4 million, the firm pays £25,000 + £2 million = £2.025 million.

Net effect: Spire-style "originating cause" wording aggregates systemic errors that would not aggregate under Woodman. For policyholders with systemic exposures (advice firms, IFAs running model portfolios, conveyancing factories running template processes), this is a meaningful difference and a reason to pay attention to your aggregation wording.

Sector implications

Medical / healthcare. Spire is a healthcare case and is most directly applicable to private healthcare providers. The case is regularly cited in healthcare liability litigation post-2022.

Solicitors. The aggregation wording in SRA Minimum Terms is "matters or transactions" not "originating cause". So Spire is not directly on point. But the case is highly persuasive in disputes under commercial PI policies that import an originating-cause trigger.

IFAs and wealth managers. Particularly relevant. DB transfer mass claims, where 50–500 clients have all received advice based on the same flawed methodology, look very like the Spire fact pattern: one pattern of conduct, many victims, common cause. Insurers argue Spire-style aggregation; policyholders push back on whether the conduct is single or fragmented. See Spoke 7.

Surveyors. Pattern-of-conduct claims (e.g. systematic overvaluation for one lender) can attract Spire-style aggregation under commercial PI wordings.

Cyber. Spire is increasingly cited in cyber aggregation disputes, where the "cause" might be a single vulnerability exploited many times. See Spoke 11.

What this means for your firm

Read your aggregation wording carefully. If your PI policy uses "originating cause" or "any one source or original cause" wording, you have wider aggregation than under Woodman wording. That is potentially good for excesses, definitely bad for limits, and an absolute reason to test the limit against your worst-case cluster.

Map your systemic exposures. Aggregation under Spire turns on the existence of a pattern, methodology or systemic failure. Map yours. Common templates, common procedures, common technology stack, common counterparties, common advice methodology — these are the aggregating features under Spire.

Buy adequate aggregate cover. Spire is the strongest argument against assuming that a per-occurrence limit gives you per-occurrence cover for mass-claim events. If your wording is "originating cause", buy aggregate cover that is sized for your worst-case pattern, not for any one claim.

Disclose your aggregation exposures at proposal. The duty of fair presentation under Insurance Act 2015 section 3 bites on cluster-level features just as much as on individual-claim features. Disclose your systemic exposures so the insurer cannot say it was not told.

How Spire interacts with Woodman

Woodman and Spire are not in tension; they construe different wordings and reach answers consistent with each. The combined effect on PI buyers is that:

Under Woodman "matters or transactions" wording, aggregation requires a connecting feature between the matters themselves. Common cause alone is not enough.
Under Spire "originating cause" wording, aggregation requires a single source or cause behind the claims. The claims can be in entirely separate matters or transactions, provided they all trace back to the cause.

The two tests can give opposite answers on the same facts. A systematic conveyancing error across 200 unrelated transactions for 200 unrelated buyers would not aggregate under Woodman (the transactions are independent) but would aggregate under Spire (the systematic error is the originating cause). This is why the choice of trigger in your wording matters as much as anything in the policy.

FAQs

Q1. Is Spire Healthcare a PI case? The policies in dispute were public and products liability, not PI strictly. But the aggregation wording at issue is identical to wording found in many PI policies, and the construction the Court of Appeal adopted is now standard for PI originating-cause disputes.

Q2. Was the case appealed to the Supreme Court? No. Permission to appeal was refused. The Court of Appeal's decision is final.

Q3. Does Spire mean a pattern of conduct always aggregates? No. It means a pattern of conduct can aggregate under "originating cause" wording. Whether it does on your facts depends on whether the pattern is genuinely a single source for all the claims and on whether the wording is "originating cause" or something different.

Q4. Could the same facts have produced a different answer under SRA Minimum Terms? Probably yes. Under SRA-style "series of related matters or transactions" wording, individual operations on individual patients are individual matters, and a common surgeon would not, on Woodman principles, by itself relate the matters. The result could have been fragmentation across 750+ claims. (The Spire policies were not SRA-style PI policies and this is a hypothetical comparison only.)

Q5. Does Spire apply to claims spread over many years? Yes. The Court of Appeal expressly held that a 14-year pattern was a single cause. Long timeframes do not break aggregation under originating-cause wording.

Q6. Does Spire help me as a policyholder ever? Occasionally. Excess multiplication is reduced — one cause, one excess, regardless of the number of claims. For small-value high-volume claims this can be helpful.

Q7. How does Spire interact with the Insurance Act 2015? Aggregation analysis sits separately from the fair presentation duty. But Spire-style aggregation strengthens the insurer's case that cluster-level features (the pattern, the methodology) are material circumstances under section 3 and that the policyholder must disclose them. See our material circumstance test deep dive.

Q8. Can I argue that the cause is not "originating" but only an intermediate cause? Yes — that is the policyholder's natural argument. The Court of Appeal in Spire recognised the distinction between originating cause and proximate cause but held the wording reaches the originating, broader cause. Whether your facts allow a narrower causal account depends on what evidence you can adduce.

Q9. Is the case being applied in cyber claims? Increasingly yes. The argument that a single zero-day vulnerability or single ransomware deployment is the originating cause of every downstream loss is a Spire-style argument. We discuss in Spoke 11.

Q10. What is the most important practical takeaway? Look at your wording. If you have "originating cause" or "any one source or original cause" language, your limits work harder against systemic exposures than they do under Woodman language. Size your limits and your excess layers accordingly.

Spire Healthcare v RSA - aggregation deep-dive