Midas Trusts actions at the Court of Appeal in March
Royds’ dispute resolution team is instructed on behalf of 214 individuals in connection with an action against their former trustees, a defunct firm of solicitors, and insurers AIG Europe Ltd (“AIG”). The combined claims are worth approximately £11million.
In August 2015 Royds scored a well-publicised resounding victory against AIG, who contented that its limit of liability under the run off policy with the defunct firm was £3million because of the effect of an aggregation clause in the Minimum Terms of Cover (“MTC”) mandated by the Solicitors Regulation Authority. In the Commercial Court, Mr Justice Teare, found that the clause did not permit the aggregation of multiple claims brought by different individuals into one claim for the purpose of the policy where those claims were not inter-connected or dependent on each other. The Court rejected AIG’s claim altogether with the result that each individual claim had a coverage limit of £3million, rather than all the claims combined.
However, this was not the end of the story, as the public importance of the decision (it being the first on the MTC wording affecting all negligence claims against solicitors) led Mr Justice Teare to grant AIG permission to appeal his decision to the Court of Appeal. In turn, with the agreement of the parties, Lord Justice Longmore ordered the expedition of the appeal so that it could be considered urgently by the Court of Appeal. The appeal hearing is due to take place on the 21st and 22nd March 2016.
The Court of Appeal’s decision is important because it will consider whether the Commercial Court’s judgment that under the MTC claims against solicitors must be inter-connected if they are to be aggregated together into one claim under all solicitors’ professional indemnity insurance policies and its decision will be binding on that issue. At any time there are dozens of claims against law firms involving multiple claims for same or similar instances of negligence that are being defended by insurers on the basis of aggregation and therefore inevitably the Court of Appeal’s decision will have a significant impact.
It is expected the Court of Appeal will reserve its judgment following the March hearings but that the judgment will follow within a few weeks.