Victory in landmark insurance case
Royds recently won a resounding victory for their clients in a landmark professional indemnity insurance (PII) case heard at London’s Commercial Court.
The judgment in the trial of AIG Europe Ltd v OC320301 LLP & Ors  EWHC 2398 (Comm), is one of the most important of its kind for many years and has attracted considerable interest within the legal profession and insurance industry. It is the first decision on the ability of insurers to aggregate claims made against solicitors’ PII policies.
Solicitors from Royds LLP represented the professional trustees in two trusts and over 200 individuals who had invested their money in holiday property schemes in Turkey and Morocco.
In 2009, they had been left out of pocket as a result of the alleged negligence of the now defunct International Law Partnership LLP.
The firm’s run-off insurers, AIG Europe Ltd, had brought the claim against their insured, seeking a declaration that the limit of indemnity for all claims under their policy should be capped at no more than £3million.
AIG relied on the wording contained in the Solicitors’ Minimum Terms of Cover (MTC), which were approved by the Law Society in 2005 and are still current. The MTC set the minimum standard of cover that all insurers in the solicitors PII market must provide as a matter of law.
The insurers had made the case that their liability should be limited on the basis that the hundreds of claims brought by the individuals could be aggregated into a single claim. In his judgment Mr Justice Teare rejected that argument and found in favour of Royds LLP’s clients by agreeing with their case that there should be no aggregation at all.
The High Court Judge’s judgment sets down in law for first time the proper construction of the MTC wording. The decision is likely to be of considerable assistance to multiple claimants who bring claims against solicitors for similar instances of negligence.
For advice on insurance disputes, please contact Stewart Wilkinson.