In the recent case of Ahmed & Ors v White & Co (UK) Limited & Allianz Global Corporate & Specialty SE [2025] EWHC 2399, the High Court considered two key insurance concepts, notification and aggregation, in the context of claims under a professional indemnity policy. In this article, Sara Palinska and Hebe Swain from the Policyholder Disputes team review the decision.

The decision in Ahmed is interesting for its review of the scope of “hornet’s nest” notifications, and for its consideration of the relatively unusual question of whether valid notification can be made by joint defence counsel acting as agent of an insured. It is also a pertinent reminder for professionals to consider how policy limits and aggregation provisions might operate if errors with advice could lead to multiple similar claims.

Background

The claimants were 176 clients of a firm of accountants, White & Co (UK) Limited (“WCUL”), who asserted claims against WCUL for negligent advice relating to tax and investments. WCUL was a small accountancy practice that entered into administration on 27 March 2019 and liquidation on 17 February 2020. WCUL held a professional indemnity policy with Allianz Global Corporate & Specialty SE (“Allianz”) for the 2016-2017 policy year and with other insurers for subsequent policy periods.

In view of WCUL’s liquidation, the claimants brought their claims against WCUL’s insurers directly pursuant to the Third Parties (Rights Against Insurers) Act 2010 (the “Act”). The claims were compromised by the majority of insurers before trial. However, the claims against WCUL’s 2016-2017 insurer, Allianz, remained. In line with the provisions under the Act, the claimants had to prove both that (1) WCUL was liable to them for negligent advice (the “Liability Claim”), and (2) that the insurers would have been liable to indemnify WCUL under the policy (the “Coverage Claim”). The court ordered a split trial, and the Coverage Claim was heard first.

The three main issues in the Coverage Claim were:

• Whether the claims had been properly notified to insurers,
• Whether the claims aggregated under the “Related Claims” provision (which provided that multiple claims arising from the same (ie, not “similar”) facts, circumstances or wrongful acts would be treated as a single claim and subject to a single limit of liability), and
• Whether the claims fell within the “Tax Mitigation Endorsement” (which was an endorsement to the policy that set out an aggregate limit for tax mitigation schemes) and were therefore subject to a sub-limit of indemnity.

Notification

The claimants put forward various assertions as to how their claims had been notified, relying on the following documents and communications:

• The “Akbar Letters” – In addition to the claims brought by the 176 claimants, a separate set of claims was brought against WCUL for breach of duty by claimants known as the Akbar claimants. In March 2017, a letter was sent to WCUL on behalf of eight of the Akbar claimants alleging poor advice in relation to investments made into 14 named companies. This letter and subsequent correspondence relating to these claims (together “the Akbar Letters”) were passed to insurers.
• The “Block Notification” – In 2017, there was a series of exchanges with insurers concerning HMRC enquiries into premature claims for Enterprise Investment Scheme (EIS) relief. The focus of the investigation was on investments made by clients of McKenzie Knight and Partners (“MKP”), a company acquired by WCUL.
• The “Kennedys Documents” – Kennedys took over the defence of the Akbar claimants’ claim in June 2017. As part of its role as defence counsel, it received various documents that could be regarded as setting out circumstances that could lead to further claims against WCUL from a broader pool of claimants. Kennedys passed these documents on to insurers.

The court reviewed key case law relating to the issue of notification and identified the following important principles. The court noted that deeming provisions in relation to notification must be construed and applied in accordance with their commercial purpose, ie to provide an extension to cover future claims flowing from the same notified circumstance.

The language of the provision will be important, and clauses that refer to circumstances that “may” give rise to claims, for example, should be read as setting a deliberately undemanding test. When the extent of potential claims is unknown, an insured can give a “can of worms” or “hornet’s nest” notification, which informs insurers of a problem the exact scale and consequences of which are unknown.

Where a “hornet’s nest” notification is given, the insured must, as a matter of fact, be aware of an issue or circumstance that underpins the notification; it cannot speculate that it may receive claims relating to negligent advice. However, the insured does not need to be aware of or appreciate all the causes and consequences of the circumstances. Finally, for later claims to attach to earlier notifications of circumstances, there must be a causal (rather than coincidental) link between the two.

Ultimately, having considered the facts, the court found that none of the communications described above constituted a valid notification to Allianz of the 176 claimants’ claims. More specifically:

• The Akbar Letters – While the court found that the Akbar Letters could be a valid notification of claim(s), the notification was specific to the initial Akbar claimants and did not extend to notify claims or circumstances for the broader group of claimants. The language used did not indicate other potential claimants or problem investments beyond those explicitly identified in the Akbar Letters. While WCUL may have inferred from this correspondence that other claims potentially existed, the letters themselves did not impute such knowledge.
• The Block Notification – The court found that any reasonable insurer in Allianz’s position would view the Block Notification as indicating there were claims against MKP. However, this did not extend to claims against WCUL.
• The Kennedys Documents – The documents were provided to Kennedys in its capacity as defence solicitors acting jointly for WCUL and Allianz and were passed on by Kennedys to Allianz. While the content could, if validly notified to Allianz, have amounted to a notification of circumstances, Kennedys was not acting as WCUL’s agent for the purpose of notifying insurers when it passed the documents to Allianz. There was nothing in Kennedys’ retainer to indicate that it would adopt this role. Rather, it was acting on a joint basis as defence counsel for both parties. There was no authority for the proposition that an agent engaged under a joint retainer is the agent for each individual principal in their dealings with each other.

Aggregation

Once the court had determined that valid notification had not been made, the issue of aggregation became moot. The court nevertheless provided comments on this issue, having heard arguments at trial. There were two means by which the 176 individual claims could be deemed to aggregate: the Related Claims provision in the policy and the Tax Mitigation Endorsement.

Further, it was not sufficient for the claims to be merely “connected to” those facts or acts, but rather there must be some causal link. In considering whether the claims aggregated as Related Claims, the court conducted a review of claims brought by 15 sample claimants to seek to identify a unifying factor. It found that certain of the claims aggregated, namely those based on investments in EIS, Seed EIS and Super EIS investments; however, claims based on other types of investments did not.

The court provided some interesting commentary in considering the extent to which claims that would be deemed to arise from the same “circumstances” for the purpose of notification should also be deemed to be Related Claims for the purpose of aggregation. The court rejected the suggestion that these two concepts were linked, particularly given the policy’s narrow, qualified aggregation language. It said the issues were distinct and should be considered and analysed on their own terms.

The policy also contained the Tax Mitigation Endorsement, which set out an aggregate limit for all claims relating to tax mitigation schemes. The court received expert evidence regarding tax law and the extent to which each of the sample claimants’ investments would fall within the scope of this endorsement (which included descriptions of types of schemes that would be covered). On the facts, the court held that (if there had been a valid notification) claims relating to certain types of investments would have fallen within the endorsement and would be subject to the lower sub-limit.

Comment

While it does not create any new law, the decision is an important reminder of how the court will analyse notification issues in practice.

The decision makes clear that the exact language of both the notification and the policy wording will be key in determining the scope of what has been notified to insurers and whether any deeming provisions within a policy are triggered. Notifications of specific claims will not generally be considered to notify broader circumstances. Accordingly, it is critical that if policyholders suspect further claims may arise, their notifications are drafted to set out the possibility of these future claims and details of the circumstances underpinning this view.

In addition, the decision confirms that whether multiple claims attach to the same notification of circumstance is a distinct question from whether they aggregate for the purpose of applying limits and deductibles. The express terms of the policy will govern the latter question, and the answer may differ in each case.

Finally, the decision makes clear the importance of notifications being made by a policyholder or their agent (such as their broker), rather than relying on statements made by a third party. In particular, the decision makes clear that updates to insurers provided by defence counsel acting on a joint retainer are unlikely to be deemed to meet an insured’s notification requirements.

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