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The wording of even widely used insurance policies is often not as neat and elegant as it should be and that is why judges are so frequently called upon to resolve issues of interpretation. One example concerned a medical company’s multi-million-pound claim on its insurers in respect of more than 700 unnecessary, inappropriate and negligent operations carried out by a breast surgeon.
The surgeon practised privately at a hospital owned by the company and, after his catalogue of errors was discovered, the company and others were sued by a large number of his former patients. The group action was eventually settled for £37 million, of which the company was liable for £26,950,000.
The company launched proceedings after its insurers argued that the sum they were obliged to pay under a combined liability insurance policy was limited to £10 million. The insurers relied upon the fact that that sum was the limit of indemnity specified in the policy in respect of any one claim.
The company argued that each patient’s claim should be viewed separately, but the High Court preferred the insurer’s arguments that the effect of the policy’s wording was to aggregate all the linked claims so as to treat them as one. In dismissing the company’s challenge to that ruling, the Court of Appeal found that, on a true interpretation of the relevant provisions of the policy, there was no real doubt or uncertainty as to how they were intended to operate.