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Spire and RSA contest aggregation once more


In Spire Healthcare Restricted v Royal & Solar Alliance Insurance coverage Restricted [2022] EWCA Civ 17, the Courtroom of Enchantment overturned the Excessive Courtroom’s choice and held that two teams of claims primarily based on the negligent apply of the identical surgeon needs to be aggregated. No matter which group the claims fell into, the unifying issue between them was the surgeon’s dishonest improper conduct.

Background

The Claimant (Spire) claimed in opposition to the Defendant insurer (RSA) below a coverage (the Coverage) offering cowl for liabilities arising from the acts and omissions of workers and people offering medical or surgical service at its hospitals.

The underlying claims arose from the much-publicised actions of Guide breast surgeon, Ian Paterson, who was sentenced in 2017 for finishing up pointless surgical procedure on sufferers between 2004 and 2011. Numerous claims have been introduced in opposition to Spire by former sufferers of Mr Paterson in respect of surgical procedures carried out at two of its hospitals.

There have been two teams of claimant sufferers. One group of sufferers had required surgical procedure however Mr Paterson had carried out sub-total mastectomies, a negligent process the place some breast tissue was left behind (Group 1). The opposite group of sufferers have been the victims of fully pointless surgical procedure (Group 2).

The related aggregation provision within the Coverage supplied as follows:

“The entire quantity payable by the Firm in respect of all damages prices and bills arising out of all claims throughout any Interval of Insurance coverage consequent on or attributable to at least one supply or unique trigger no matter the variety of Individuals Entitled to Indemnity having a declare below this Coverage consequent on or attributable to that one supply or unique trigger shall not exceed the Restrict of Indemnity acknowledged within the Schedule” (emphasis added).

Spire argued the trigger for the Group 1 claims was Mr Paterson performing a negligent process the place a mastectomy was clinically indicated, and the reason for Group 2 claims was Mr Paterson finishing up surgical procedure the place none was vital. Spire due to this fact argued there have been two separate causes so two separate limits of indemnity needs to be utilized. This is able to enable Spire to assert £20 million in cowl (the utmost cowl accessible) versus a single restrict of £10 million (which was accessible “anybody declare”) if the trigger was the identical.

RSA argued there was “one supply or unique trigger” of the claims; specifically Mr Paterson and his conduct, and due to this fact Spire might solely declare a single restrict of £10 million.

First occasion choice

The Excessive Courtroom agreed with the Spire and accepted the aggregation language was broad, necessitating the widest attainable seek for a unifying issue within the historical past of the losses. Nonetheless it held that there have to be a causative hyperlink between what’s contended to be the originating trigger and the loss and there have to be a restrict to the diploma of remoteness. The Excessive Courtroom rejected the argument that Mr Paterson’s negligence might be the preliminary trigger. It held there have been clear causative variations between Group 1 and Group 2 instances. Within the Group 1 instances, the negligent process was the results of careless surgical procedure. Conversely, Group 2 claimants have been subjected to pointless surgical procedure for Mr Paterson’s monetary acquire. The dishonesty of Mr Paterson was totally different between the instances, as have been his mis-appreciations.

It additionally held the administration points inside Spire that brought on the 2 totally different strands of misconduct have been additionally totally different in nature. Group 1 instances concerned a failure to use controls to stop the event or continuation of the negligent process. The administration failure in relation to Group 2 instances consisted of the failure to problem the necessity for the pointless surgical procedure.

Courtroom of Enchantment choice

In giving the main judgment, Girl Justice Andrews upheld RSA’s enchantment. With regard to the wording “consequent on or attributable to at least one supply or unique trigger“, she reiterated {that a} extensive search needs to be performed for a unifying issue. In looking for a unifying issue, one should not go thus far again within the causal chain that one enters the realm of coincidental/distant causes that present no significant clarification for what has occurred.

Andrews LJ famous the observations of Mr Justice Phillips in Cox v Bankside [1995] 2 Lloyd’s Rep 437 (which thought-about the negligence of Lloyd’s underwriters) that the negligence of 1 particular person will be an originating trigger for the aim of an aggregation clause of this kind, although his negligence could take totally different or a number of types. She criticised the Excessive Courtroom’s choice that a person’s motive for performing in a specific means is able to being an originating trigger if there have been totally different mis-appreciations leading to one particular person involved committing the negligent acts or omissions. The claims weren’t primarily based on mis-appreciations; they have been primarily based on deliberate and dishonest conduct with a cavalier disregard for welfare. There could also be instances wherein, on the information, the behaviour of 1 particular person can be too distant or too obscure an idea to supply a significant clarification for the claims, however this was not considered one of them given the deliberate and dishonest conduct.

She additionally agreed with RSA’s argument that as a result of Spire’s legal responsibility to sufferers for an indemnity was the identical throughout each Teams, a distinction shouldn’t be drawn between the 2 Teams. The query of whether or not the affected person did or didn’t require surgical procedure shouldn’t have any bearing on Spire’s legal responsibility for the claims.

These elements led to a conclusion that all or any of (i) Mr Paterson, (ii) his dishonesty, (iii) his apply of working on sufferers with out their knowledgeable consent, and (iv) his disregard for his sufferers’ welfare might be recognized both singly or collectively as a unifying issue within the historical past of the claims for which Spire was liable in negligence, no matter whether or not the sufferers involved fell into Group 1 or Group 2 (or each).

As such, it was held there was one supply and originating trigger for every of the Teams of Claims recognized by Spire and so the Claims have been aggregated. Subsequently Spire might get well just one £10 million restrict.

Remark

Spire has tried to entry a £20 million combination restrict below its coverage with RSA greater than as soon as. It had beforehand argued that the aggregation clause didn’t apply to unify the claims for the needs of the restrict of indemnity. That argument failed earlier than the Excessive Courtroom and later the Courtroom of Enchantment: each courts held the language was unquestionably aggregation language that unified claims for the needs of the restrict of indemnity. Spire then argued that there have been two totally different units of claims: an argument which in the end failed.

The choice supplies a useful illustration of the strategy to aggregation provisions the place the conduct of a person takes a variety of types.  If policyholders want to guarantee such claims are aggregated by trigger, sort or class quite than unique trigger, that may should be communicated and mirrored within the selection of aggregation language within the coverage in query.

 

Alexander Oddy

Nikita Davé

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