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The search for an “originating cause”: Guidance from the Court of Appeal on the interpretation of standard aggregation language in insurance policies

In a case concerning the performance by a surgeon of unnecessary medical procedures on his patients, the Court of Appeal has overturned the first instance decision in Spire v RSA in finding (for insurers) that there was a single factor behind all the claims.

The case turned on the meaning of the standard policy language which seeks to aggregate claims or occurrences “consequent on or attributable to one source of original cause”. It is well-established that this policy language is a formula designed to achieve the widest possible aggregating effect.

The Court of Appeal held that:

  1. The phrase “original cause” does not mean “proximate” cause and requires only a “looser causal connection”, which is the search of a unifying factor; and
  2. The judge at first instance had erred in seeking a “single effective cause” and identifying the differences between the various claims, rather than focussing on the unifying factor(s).

The Court of Appeal declined to set a general principle regarding claims arising from the conduct of a single individual. This leaves it open to future courts to apply the particular facts as to whether to aggregate cases arising from an individual’s conduct.

Whilst any aggregation analysis remains a very fact-dependent exercise, this decision re-emphasises the breadth of the “originating cause” language and the importance of focussing on the unifying factors behind the claims, not just the differences.

Decision: Spire Healthcare Limited v Royal & Sun Alliance Insurance Limited [2022] EWCA Civ 17

"... the Judge failed to conduct the wide search for a unifying factor in the history of the claims that the authorities required him to carry out. Indeed, he appears to have noted the factors that were common to all the claims but then disregarded them, in the course of searching for what he termed a "single effective cause," which is not the correct test."