Abstract

Article

Aggregation Clause – Construction – General

 

In the construction of an aggregation clause there should be balance and no predisposition towards either a narrow or broad approach Lloyds TSB General Insurance Holdings v. Lloyds Bank Group Insurance Co Ltd [2003] UKHL 48; [2003] Lloyd's Rep IR 623; AIG Europe Ltd v Woodman [2017] UKSC 18; [2017] 1 WLR 1168; SpireHealthcare Ltd v Royal & Sun Alliance Insurance plc [2020] EWHC 3299 (Comm).

Consequent on or Attributable to one Source or Original Cause

An aggregation under the formula, consequent on or attributable to one source or original cause, calls for the widest possible search for a unifying causal factor for why something has happened: Countrywide Assured Group plc & Others v Marshall [2002] EWHC 2082 (Comm); [2003] Lloyd's Rep I and R 195, in the history of the losses, AXA Reinsurance (UK) Ltd v Field [1996] 1 WLR 1026; [1996] 2 Lloyd's Rep 233; Municipal Mutual Insurance Limited v. Sea Insurance Company Limited [1998] Lloyds Rep I & R 421, and proximate cause is unnecessary so that losses of any common origin arincluded, ACE and Beazley Underwriting Limited v The Travelers Companies Incorporated [2011] EWHC 1520 (Comm); but "original cause " is not so generalised as to be ineffective in the search for an effective one: The Cultural Foundation v. Beazeley Furlonge Limited [2018] EWHC 1083 (Comm); [2019] 1 Lloyds Rep 12. There must be a causal link between it, with some limit to the degree of remoteness: American Centennial Insurance Co. v. INSCO Ltd [1996] L.R.I.R 407, but without any distinction between "original cause" and "originating cause", Countrywide Assured Group plc v Marshall [2002] EWHC 2082 (Comm) (supra). A person's basic method of acting may be an originating cause if a mis-appreciation or deliberate decision, which differs from  similar or the same mis-appreciations made by a number of different individuals, leads to the lability-creating acts or omissions. Cox v Bankside Members Agency Ltd [1995] 2 Lloyds Rep 437 at 4552. The use of the alternative concept, "one source", does not  detract from this: rather, it mphasises it. ACE and Beazley Underwriting Limited v The Travelers Companies Incorporated (supra). So if a single person acts under separate mis-appreciations or decisions, each creating liability, there may, as circumstances permit, be separate originating causes in the separate mis-appreciations or decisions, though only one individual was involved and the overriding broad motive was dishonest. The unifying original factor must have a causal nature in the libility-creating conduct, and the motivation, as distinct from the harm-causing acts, would not have been a cause of the harm. SpireHealthcare Ltd v Royal & Sun Alliance Insurance plc [2020] EWHC 3299 (Comm).

Standard Policies

For the construction of standard policies, it is appropriate to follow earlier authorities unless there is a clear contextual distinction or other strong reason. Hooley Hill Rubber & Chemical Company Limited v Royal Insurance Company [1920] 1 K.B. 257; SpireHealthcare Ltd v Royal & Sun Alliance Insurance plc [2020] EWHC 3299 (Comm).