Month: January 2026

Claims Notifications and Policy Terms: A Taxing Duo

Ahmed & ors v White & Company (UK) Ltd & Allianz Global Corporate & Specialty SE [2025] EWHC 2399 (Comm)

BACKGROUND

This case concerned claims (“the Claims”) brought by 176 investors (“the Claimants”) against White & Company (UK) Ltd (“W&C”), a firm of chartered accountants, and its professional indemnity insurer, Allianz Insurance Company (“Allianz”). The Claimants alleged that they had been provided with negligent advice by W&C regarding a series of high-risk tax-mitigation investments. Following W&C’s insolvency, the Claimants sought recovery directly from Allianz under the Third Parties (Rights Against Insurers) Act 2010 (“the TPRAI”).

The central question was whether Allianz was liable to indemnify W&C under its professional indemnity policy for the losses claimed.

THE POLICY

The policy contained the following terms:

The Notification Clause

"The Policyholder shall, as soon as reasonably practicable during the Policy Period, notify the Insurer at the address listed in the Claims Notifications clause below of any circumstance of which any Insured becomes aware during the Policy Period which is reasonably expected to give rise to a Claim. The notice must include at least the following:

(i) a statement that it is intended to serve as a notice of a circumstance of which an Insured has become aware which is reasonably expected to give rise to a Claim;

(ii) the reasons for anticipating that Claim (including full particulars as to the nature and date(s) of the potential Wrongful Act(s));

(iii) the identity of any potential claimant(s);

(iv) the identity of any Insured involved in such circumstance; and

(v) the date on and manner in which an Insured first became aware of such circumstance.

Provided that notice has been given in accordance with the requirements of this clause, any later Claim arising out of such notified circumstance (and any Related Claims) shall be deemed to be made at the date when the circumstance was first notified to the Insurer.”

          (“the Notification Clause”)

Related Claims Clause

“any Claims alleging, arising out of, based upon or attributable to the same facts or alleged facts, or circumstances or the same Wrongful Act, or a continuous repeated or related Wrongful Act…shall be deemed to be a single claim”.

(“the Related Claims Clause”)

Tax Mitigation Endorsement

claims arising from investments which were “pre-planned artificial transactions designed to achieve a specific tax outcome” were subject to a single limit of indemnity of £2 million.

(“the Tax Mitigation Endorsement”)

THE ISSUES:

The Court considered three key issues:

1. Whether W&C had validly notified Allianz of the claims or circumstances that might give rise to claims pursuant to the Notification Clause.
2. Whether the claims should be aggregated under the policy’s “Related Claims” clause; and
3. Whether the Tax Mitigation Endorsement applied.

JUDGMENT

Notification

As part of determining whether the Claims had been validly notified, the Court was asked to consider whether the following three categories of communications constituted a valid notification of all Claims pursuant to the Notification Clause.

1. The “Akbar Letters”

These were letters written by the Claimants’ solicitors to W&C, outlining details of specific investments and the alleged negligent advice provided by W&C in relation to those investments.

The Claimants argued that forwarding these letters to Allianz constituted a broad notification, sometimes referred to as a “hornets’ nest” notification, which should be interpreted as alerting Allianz to the possibility of further claims from other clients who had received similar advice, not just the 14 named entities. Allianz, on the other hand, argued that the notification was limited strictly to the 14 specific entities mentioned in the letters and did not extend to any other potential claimants.

Considering all the evidence presented, the Court found in favour of Allianz that the language did not signal a “hornet’s nest” scenario, indicating an influx of future claims. In coming to this decision, the Court stressed that any notification must be clear and specific. In contrast, the Akbar Letters did not provide sufficient information to put Allianz on notice of a broader class of claims.

1. The “Block Notification”

These communications between W&C and Allianz contained information regarding HMRC inquiries into premature EIS relief, along with a spreadsheet. An EIS (Enterprise Investment Scheme) is a UK government initiative that encourages investment in small, high-risk companies by offering tax reliefs to investors. The relevance in this case was that the investments in question were structured to take advantage of EIS tax reliefs, and HMRC inquiries suggested that the reliefs may have been claimed prematurely or improperly.

The Claimants argued that the Block Notification, which included details of the HMRC inquiries and a spreadsheet of affected clients, should have been interpreted as a notification of circumstances that might give rise to multiple claims against W&C. Allianz, however, interpreted this notification as relating solely to another entity MKP, which W&C had acquired and not W&C itself, and argued that it did not provide sufficient detail or context to constitute a valid notification of claims or circumstances under the policy.

In the Court’s judgement, a reasonable insurer in Allianz’s position would have perceived the Block Notification as limited, and not indicative of wider claims against W&C, as it did not clearly identify W&C as the subject of the potential claims, nor provide enough information to alert Allianz to the risk of multiple claims. The Court noted that while W&C may have had the subjective awareness of the broader matters, that awareness was not communicated to Allianz and therefore was not within the scope of the notification.

1. The “Kennedy Documents”

These were emails between defence counsel, their clients, W&C, Allianz, and the claimants’ lawyer. The documents included correspondence and information that might have disclosed sufficient facts to support a broader notification of circumstances. The Claimants argued that these communications, by virtue of being shared with Allianz, should be treated as a valid notification under the policy. However, Allianz contended that the policy required notifications to be made “by the insured,” and that communications from solicitors or third parties did not satisfy this requirement, unless there was express contractual authority for them to notify on W&C’s behalf.

In his judgment, Judge Pearce noted that such documents might have disclosed sufficient facts to support a broader notification. However, as W&C itself did not communicate them and, absent express contractual authority for W&C’s solicitors to notify on its behalf, Allianz’s receipt did not satisfy the policy’s requirement that any notifications come “by the insured”.

Overall, the Court determined that no communication effectively notified Allianz of broader circumstances or triggered wider policy cover. Only narrow notifications of specific claims, by reference to specific investments, were valid. Hence, policyholders should note the importance of strict compliance with policy notification requirements and the need for clarity and specificity in any notification to insurers.

Aggregation and Endorsement

Judge Pearce then addressed the alternative arguments on aggregation and policy limits if the matters had been validly notified.

Tax Mitigation Endorsement:

This endorsement applied to tax-mitigation schemes such as pre-planned, artificial transactions aimed at achieving specific tax outcomes (including EIS). The Claimants contended that the endorsement should not apply to all the investments in question, or that its application should be limited. Allianz argued that the endorsement was triggered by the nature of the investments, which were designed to achieve specific tax outcomes through artificial means, and that the £2 million limit therefore applied to all claims.

The Court agreed with Allianz, finding that the endorsement applied and that the Claimants’ demand for £50 million was subject to the £2 million limit.

Related Claims Clause

The policy defined related claims as those arising from the same facts, circumstances, wrongful act, or a related wrongful act. The Claimants argued that each investor’s claim should be treated separately, potentially allowing for multiple limits of indemnity to apply. Allianz, conversely, argued that all claims arose from the same or related acts, namely, W&C’s advice on tax mitigation schemes, and should therefore be aggregated as a single claim under the policy.

Supporting Allianz, the Judge found that each of the investor claims relating to EIS stemmed from the same alleged misconduct by W&C, namely, negligent advice on tax‑mitigation schemes and therefore were sufficiently “related” to aggregate as one claim. However, the non-EIS claims were not sufficiently related.

KEY TAKEAWAYS

Overall, this decision is a reminder of the strict approach towards claim notifications and the application of policy terms. Policyholders must ensure notifications are clear, complete and timely, as ambiguous or narrow notifications risk leaving policyholders without cover. Equally, it is critical for policyholders to understand the wording of their insurance policy and be alive to terms that limit cover via aggregation clauses, to ensure policy coverage aligns with risk exposure.

Chloe Franklin is an Associate and Pawinder Manak is a Trainee Solicitor at Fenchurch Law

by Fenchurch Law

When can an insurer join the party? Managed Legal Solutions v Mr Darren Hanison (trading as Fortitude Law) and HDI Global Specialty SE [2025]

This recent High Court judgment sheds light on the circumstances under which an insurer may be joined as a party to underlying liability proceedings. The case explores the nuanced question of when, and in what situations, an insurer is deemed to have “an interest” in a liability dispute, and carries significant implications for claims brought under the Third Parties (Rights Against Insurers) Act 2010 (“the TPRAI”).

Background

Managed Legal Solutions Limited (“MLS”), a litigation funder, commenced proceedings against Darren Hanison trading t/a Fortitude Law (“Mr Haninson”) in 2021 seeking damages (“the Liability Proceedings”).

Although Mr Hanison initially defended the Liability Proceedings in their entirety, including an allegation that he owed MLS an independent tortious duty (“the Tortious Duty”), he was debarred from defending them from 1 November 2024, having failed to comply with an Unless Order.

Separately, HDI Global Specialty SE (“HDI”), which provided Mr Hanison with professional indemnity insurance with a limit of £2m, initiated confidential arbitration proceedings against Mr Hanison in relation to coverage (“the Arbitration”).

As the Arbitration was unresolved at the time of the current application, HDI had an interest in the outcome of the Liability Proceedings. That interest was particularly acute given the risk that Mr Hanison could become bankrupt if he lost the Liability Proceedings, thus triggering an automatic transfer of his rights under the insurance policy to MLS under the TP(RAI) 2010. Accordingly, HDI applied under CPR 19.2 to be added as a second defendant to the Liability Proceedings.

The central argument advanced by HDI was a conflict-of-interest point. While it was in Mr Hanison interest for the Tortious Duty to be established, since that would enable him to pursue an indemnity from HDI – HDI had a clear interest in demonstrating that no such duty existed, as that would absolve them of any obligation to indemnity Mr Hanison. In light of this inherent conflict, HDI argued that its joinder to the Liability Proceedings was necessary to safeguard its interests.

The application

Did CPR 19.2 apply?

MLS opposed the application, contending that the relevant rule was, in fact, CPR 19.6. That provision addresses the substitution or addition of parties after the limitation period has expired, which, according to MLS, was the case here because the limitation period for the alleged Tortious Duty claim had already lapsed.

HDI, however, argued that the relevant claim was only a potential future claim by MLS against it under the TP(RAI) 2010, because that claim was contingent on Mr Hanison becoming bankrupt. On that basis, the limitation period had not expired (and strictly speaking had not even commenced).

The Court agreed with HDI. It concluded that the claim in the Liability Proceedings was not time-barred and that HDI’s joinder did not amount to a “change of parties”. Rather, it would simply permit it to make submissions in relation to the Liability Proceedings. Accordingly, the only question for the Court to decide was whether the requirements of CPR 19.2 were satisfied.

CPR 19.2

CPR 19.2 provides that a Court may permit the addition of a new party where either: (a) it is desirable to do so to enable the Court to resolve all matters in dispute within the proceedings; or (b) there exists an issue involving the new party and an existing party connected to the matters in dispute, such that it is desirable to add the new party to resolve that issue.

The Court accepted that there was “an issue” involving HDI and relied on several authorities, notably Wood v Perfection Travel [1996], which established that it may be appropriate, in certain cases, to add an insurer to liability proceedings and allow them to make submissions.

The Court was also satisfied that the ‘desirability’ threshold was made out. Given that Mr Hanison had been debarred from defending the Liability Proceedings, the Tortious Duty claim was effectively uncontested. The Court therefore found it ‘desirable’ for HDI to be added, unless there were compelling factors to the contrary.

In the Court’s view, no such factors existed. Although MLS argued that the application was delayed, pointing out that the Tortious Duty issue had been ‘in play’ since October 2023 (HDI’s application, by contrast, was made in June 2025), the Court found that the decisive trigger was Mr Hanison being debarred from defending the Liability Proceedings. Until that point, Mr Hanison had maintained his defence. As it was no longer possible for him to do so, it was necessary for HDI to be joined to the Liability Proceedings to protect its interests.

MLS further contended that joining HDI would place it in a more advantageous position than its insured, since Mr Hanison had already been debarred from defending the claim. The Court, however, was not persuaded by that argument. It recognised that HDI had its own distinct interest in the Tortious Duty claim and, if it were not permitted to participate, it would be exposed to the risk of providing an indemnity for an uncontested liability.

Comment

This case raises several noteworthy issues, particularly in relation to the TP(RAI) 2010. While HDI’s application was not itself a TP(RAI) 2010 claim, it was clearly made with the prospect of such a claim in mind.

In this context, it could be argued that permitting an insurer to find itself in a more advantageous position than its insured is out of step with the TP(RAI) 2010 given that, conversely, recent decisions under the TP(RAI) 2010 make it clear that a claimant’s rights are no better than those of an insolvent insured in whose shoes they stand. See, in particular, Makin v QBE and Archer v Riverstone.

That said, it is perhaps unsurprising that HDI was so determined to safeguard its interests. Without the opportunity to participate in the Liability Proceedings, HDI faced the prospect of an uncontested claim against its insured, and a subsequent judgment, which, following Makin v QBE, it would likely be unable to challenge.

This case also brings into focus a vexed issue facing insureds who are required to defend liability claims on one hand, while pursuing claims for indemnity from their insurers on the other. Notably, an insured will usually seek to deny liability in proceedings brought against them, yet, paradoxically, must establish that liability in order to secure an indemnity from their insurer.

MLS has been granted permission to appeal, so its opposition to HDI’s joinder will now be considered by the Court of Appeal. Watch this space.

Alex Rosenfield is a Partner at Fenchurch Law

by Alex Rosenfield

Understanding Common Construction Exclusions: Lessons for brokers and policyholders

At our recent London Symposium, Daniel Robin, Deputy Managing Partner at Fenchurch Law hosted a session on the principles and importance of interpreting policy exclusions, both within construction, and across the insurance industry.

The session focused on four key areas: contractual liability exclusions, cladding and fire safety exclusions, exclusions relating to liquidated damages, and finally whether Section 11 Insurance Act can apply to Exclusions. It is often said that a policy is only as good as its exclusions, and a good proportion of coverage disputes turn on the correct interpretation of its exclusions. An understanding of these exclusions is essential for brokers to help their clients navigate and mitigate these risks to avoid being left uncovered.

1. Contractual liability exclusions managing assumed risks

Contractual liability exclusions are one of the most common exclusions in liability insurance. These clauses prevent insurers from covering risks that arise because the policyholder has assumed ‘obligations by contract’ through indemnities, guarantees, or warranties given to third parties.

Daniel clarified: “Insurers don’t generally want to be on the hook for liabilities that wouldn’t exist under common law or statute, or for promises that go beyond what’s legally required.”

When an insured professional takes on a larger liability than legally required, like guaranteeing an outcome, which is a larger promise than simply the duty to exercise reasonable skill and care, that liability may fall outside insurance cover.

Often claimants will go down the path of least resistance and pursue strict liability contractual breaches, which will leave policyholders having to prove that they would still have been liable under common law, usually for a breach of reasonable skill and care. However, building regulations or planning requirements can be amended retrospectively, sometimes making previous designs non-compliant, which could fall foul of a strict liability contractual provision, but not a breach of a reasonable skill and care.

To protect clients, brokers should scrutinise client contracts for any indemnities, guarantees, or warranties that extend liability beyond common law, and ensure the policy either aligns with those obligations, or that clients understand the potential uninsured exposures, or that the appropriate extensions to cover are purchased.

2. Cladding and fire safety exclusions

Cladding and fire safety exclusions are potentially the most topical and complex exclusions facing construction professionals. “One exclusion that is very common; insurers limit their liability for anything arising out of or connected to combustibility or fire protection.”

Fire safety exclusions are standard in many professional indemnity and construction all-risk policies, and they often appear deceptively simple. However, their breadth can leave significant coverage gaps.

Ultimately, interpretation can hinge on small wording distinctions. In an example, Daniel suggested that the exclusion might not apply where the issue concerned a lack of design detail rather than the choice of combustible material. The key was whether the clause referred to the form of materials used or the design or omission itself.

Daniel cautioned: “It’s a fine line, but the burden will always be on the insurer to prove that an exclusion applies. Still, brokers and insureds must be alert to the fact that even design omissions may fall foul of broadly drafted fire safety exclusions.”

Other types of cladding provisions, that limit the scope of cover but do not outright exclude it, can also raise challenges; where exclusions limit indemnity to the “cost of rectifying defective work,” policyholders may find that consequential losses or replacement costs are uninsured.

Brokers must therefore review policy wordings in line with regulatory developments to make clients aware of any gaps in coverage due to evolving building standards or retrospective safety amendments, and ensure that their policyholders are aware of what cover is in place.

3. Exclusions relating to damages: liquidated and consequential losses

Furthermore, insurance does not automatically follow the contract, particularly when contracts allocate risk through liquidated damages.

Liquidated damages clauses are a common feature of construction contracts, predefining the amount payable in the event of delay or breach, reflecting an agreed estimate of loss. However, insurers typically exclude these liabilities, viewing them as ‘punitive’ or ‘beyond the scope’ of compensatory loss.

“Insurers exclude them because they don’t allow for an assessment of actual loss and can operate more like penalties even though in reality they can limit the policyholders exposure that they would have in any event under other contractual provisions.”

Exclusion clauses still remain even when liquidated damages are a genuine pre-estimate of loss, meaning that policy coverage generally extends only to direct, compensatory loss, not to sums agreed pre contract.

The knowledge that delay or contractual penalty exposures are unlikely to be insured, even if they seem commercially reasonable, is essential to clients, and brokers should therefore always draft limitation of liability clauses that cover liquidated damage risks too.

4. Section 11 Insurance Act and exclusions

Daniel finally discussed an increasingly important area of insurance law: how S.11 Insurance Act 2015 interacts with policy exclusions and warranties.

Section 11 of the Act clarifies that an insurer cannot rely on a breach of warranty or condition precedent if the breach did not actually increase the risk of the loss that occurred. It is not yet tested in Court if this principle could also apply to exclusions, as it may “catch other types of contractual provisions such as conditions precedent or similar rules.” However, the wording of the Act, and the guidance notes suggest that it can apply to exclusions that impose an obligation on the policyholder as a pre-requisite to cover.

Brokers should therefore challenge insurers who decline claims by considering section 11; if the decline is purely technical and unrelated to the loss event, policyholders may still be entitled to claim cover.

Key lessons for brokers

Exclusion clauses are more than technicalities, they define the boundaries of insurance protection. For brokers, several practical lessons emerged: primarily, brokers must scrutinise contractual obligations and identify warranties, indemnities, or guarantees that extend liability beyond ‘duty of care’. It is also important to monitor regulatory shifts, and educate clients on the difference between compensatory damages (insurable) and liquidated or penalty-based damages (typically excluded).

Good communication is essential, not just with your client, but with experts from every industry involved. Effective dialogue between legal, technical, and insurance teams while forming a contract is one of the easiest ways to ensure risk cover is coherent and insurable. The interpretation of an exclusion depends not only on precise wording but also on how contracts are drafted, executed, and aligned with the policyholder’s duties.

Mastering these subtleties and leaning on the expertise of other teams is central to a broker’s role as an adviser. A proactive, detail-oriented approach, combining legal awareness with practical foresight, enables brokers to anticipate exclusions, bridge gaps, and ultimately keep their clients covered.

Daniel Robin is the Deputy Managing Partner at Fenchurch Law.

by Fenchurch Law