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.