Dishonest solicitors & aggregation clauses: Christopher Stanton explains how recent rulings have exposed insurers to further liabilities
- Recent court rulings in Baines and Discovery Land have limited insurers’ ability to aggregate claims from dishonest acts by solicitors, increasing their exposure to unlimited liabilities.
- These decisions have affected solicitors’ professional indemnity insurers under the SRA’s Minimum Terms and Conditions, challenging their ability to cap liabilities.
- Insurers must reassess risk evaluations and policy wordings, as assumptions about aggregation clauses may no longer apply.
Following the Court of Appeal’s judgment in Axis Specialty Europe SE v Discovery Land Company LLC and other companies [2024] EWCA Civ 7, [2024] All ER (D) 57 (Jan), insurers are asking whether aggregation clauses serve any real purpose and are concerned about exposure to unlimited liabilities which they previously assumed would aggregate as one claim. This is especially worrying for solicitors’ professional indemnity insurers, who are constrained by the Solicitors Regulation Authority’s (SRA’s) minimum terms and conditions (MTC). In this article, we will explore the origins of the MTC wording, whether insurers’ concerns are justified, and what
