Commercial Court decision on aggregation
Medical negligence claims were consequent on or attributable to two distinct sources or original causes: the Commercial Court reiterates the principles applicable to “original cause” aggregation wording and applies those principles to the conduct of a disgraced surgeon. Daniel Shapiro QC and David Myhill acted for the successful Claimant, Spire Healthcare Ltd.
Judgment in Spire Healthcare Ltd v Royal & Sun Alliance Insurance plc  EWHC 3299 (Comm) was handed down today by HHJ Pelling QC (sitting as a judge of the High Court) following a remote trial by Skype in November 2020.
HHJ Pelling QC reaffirmed the principles relating to the interpretation of an aggregation clause in an insurance policy which aggregates claims “consequent upon or attributable to one source or original cause” and applied them in the context of a combined liability policy under which RSA promised an indemnity to Spire for Spire’s legal liability for medical negligence. The insurance indemnity arose out of claims brought against Spire and other defendants by patients injured by the disgraced breast surgeon Mr Ian Paterson. Spire contributed a substantial sum to a compensation fund for the patients and sought indemnity from RSA.
The policy was subject to an aggregate limit of £20 million but individual any one claim limits of £10 million. Spire contended that there were two groups of claims, each consequent upon or attributable to one source or original cause, such that there were two any one claim limits of £10 million and an aggregate total of £20 million.
Spire contended that there were two groups of claims, namely:
- Claims consequent on or attributable to Mr Paterson’s negligent conduct, whereby he carried out a cleavage sparing mastectomy (a form of sub-total mastectomy) where a mastectomy was clinically required.
- Claims consequent on or attributable to Mr Paterson’s deliberate conduct, where he dishonestly reported false pathology to Patients as to the existence or risk of cancerous tissue, and then assaulted Patients by performing unnecessary surgery where there was no clinical indication for such surgery. In 2017 he was convicted under sections 18 and 20 of the Offences against the Person Act 1861 and sentenced to 20 years imprisonment for that form of conduct.
RSA contended that all claims aggregated as one claim, either by “Mr Paterson” or “Mr Paterson and his conduct”.
Applying the established legal principles to the facts, the Court agreed with Spire that claims brought against it by patients of the disgraced breast surgeon Mr Ian Paterson involved two distinct forms of conduct, and arose out of two distinct sources or original causes. Spire was therefore entitled to an indemnity of £20 million under the Policy, rather than £10 million as contended for by RSA.
A detailed casenote is available here.