A Christmas Tale: The Latest on Aggregation - Lord Bishop of Leeds v Dixon Coles & Gill [2020] EWHC 2809 (Ch)


In a judgment handed down on 28 October, the High Court (His Honour Judge Saffman) applied the test in AIG Europe Ltd v OC320301 LLP [2016] EWCA Civ 3 for “interconnectivity or unifying factors” in relation to the aggregation of claims under the SRA Minimum Terms, and clarified that the mere fact that a number of different dishonest acts have been committed by the same individual is unlikely to be a sufficient unifying factor.


Dixon Coles & Gill was a long-established three-partner firm of solicitors. Its senior partner was a Mrs Box. On Christmas Eve 2015, the two other partners discovered that Mrs Box had stolen over £4m from various clients in a series of thefts over a number of years. She ended up being jailed for seven years.

DCG was quickly faced with claims from a number of those clients. These proceedings were brought by two sets of such clients (collectively, “the Claimants”).

DCG’s professional indemnity insurer was HDI Global Specialty SE (“HDI”). Its policy had an indemnity limit of £2m any one claim.

Pursuant to the SRA Minimum Terms & Conditions (“the MTCs”), HDI was obliged to indemnify the innocent partners of DCG. However, it argued that all of the misappropriations should be classed as a single “claim” under the MTC. That would have meant that that a single indemnity limit, of £2m, would have applied to all the claims which DCG were facing, leaving an uninsured exposure of a further £2m.

The Claimants brought a claim directly against HDI under the Third Parties (Rights against Insurers) Act 1930 for a declaration that each of their claims against DCG should be treated as a separate claim (with a separate £2m limit of indemnity) and that the test for aggregation under the MTCs was not satisfied.

The aggregation provision

The MTCs aggregate all claims arising from:

i. one act or omission;

ii. one series of related acts or omissions

iii. the same act or omission in a series of related matters or transactions; or

iv. similar acts or omissions in a series of related matters or transactions.

This case involved a consideration of limbs (i) and (ii).

HDI’s “one act” argument: limb (i)

The MTCs define a “claim” not just as a demand for, or an assertion of a right to, civil compensation, but also as including any obligation on the part of the insured firm to remedy a breach of the SRA Account Rules

HDI argued that DCG’s obligation to remedy that breach was one indivisible obligation and therefore constituted one “claim” under the MTC. It argued that Mrs Box’s dishonest conduct constituted a single “act”, using the analogy of building a house whereby:

“an individual engages in a single act when he builds a house. That may involve a number of individual steps but at the end of the day there was one act intended.”

The Court rejected that analysis, instead holding, in agreement with the Claimants, that each theft was a separate dishonest act. Using HDI’s own analogy of house-building, the Court stated that the situation of multiple thefts was more akin to a whole housing development:

“There may be a single intention to build a housing estate in the same way that Mrs Box may have had the single intention of stealing as much money as possible but each house, and each theft, must, in my judgment, be a different act although they may be taken with a view to accomplishing one ultimate objective.”

HDI’s “related acts” argument: limb (ii)

HDI’s alternative argument was that the thefts were sufficiently “related” so as to satisfy limb (ii) of the aggregation provision in the MTCs.  It argued that Mrs Box’s modus operandi of teeming & lading (using funds from one client to cover up the theft committed in relation to another client) was a “unifying factor” pursuant to the test laid out by the Supreme Court in AIG Europe Ltd v OC320301 LLP [2016] EWCA Civ 3 (“the AIG case”) - albeit that that decision had considered the meaning of the word “related” in the context of limb (iv) (“related matters or transactions”).

HDI’s alternative argument was also rejected by the Court. Based on the AIG case, it held that, in order for matters or transactions (or in this case thefts) to be “related”, there must be sufficient interconnection or unifying factors between them. However, the fact that the thefts that were all committed by the same person and concealed by the same process was not enough.

The teeming & lading did not constitute the acts which had to be related, but were merely a process of concealing the thefts. It was the thefts themselves which had to be related for the purposes of aggregation, and that required a degree of inter-dependence which was entirely absent here. On the contrary, what caused the financial losses to the two sets of Claimants were separate thefts from each of them.


This case thus provides considerable reassurance for solicitors seeking an indemnity from their insurers (or Claimants ultimately seeking recovery from those insurers), where those insurers might otherwise have attempted to aggregate a raft of thefts committed by one person by one method. More generally, it emphasises the high bar for insurers in demonstrating that discrete acts or omissions are nevertheless sufficiently “related” so that multiple claims, arising from those acts, can be aggregated.