The Court of Appeal considers for the purpose of the solicitors’ Minimum Terms of Cover what it means to ‘condone’ a fraud and whether two dishonest acts by a solicitor fall to be aggregated (Discovery Land v Axis)

Article summary

Insurance & Reinsurance analysis: A dishonest solicitor, Mr Jones, misappropriated substantial sums from his client (DLC). He also used DLC’s property, without its authority, as security for a loan to a company under his control. The solicitor’s firm (Jirehouse) was insolvent, and so DLC sued its insurers (Axis) under the Third Parties (Rights against Insurers) Act 2010 (the 2010 Act). Axis defended the claim on two grounds. First, it relied upon a policy exclusion for fraudulent acts that were ‘condoned’ by the firm’s other partners, members or directors (in fact there was only one, Mr Prentice). Second, it argued that the two claims in question were ‘similar acts or omissions in a series of related matters or transactions’. At trial before Robin Knowles J (the Judge) Axis lost on both issues. The...