Omair Ahmed & Ors v White & Company (UK) Limited & Anor

A notification clause must be construed objectively, by reference to the words communicated and their factual context. The insured’s own knowledge may establish awareness of a wider potential problem, but that knowledge must be conveyed to the insurer before it can enlarge the notification. A notification of a claim does not necessarily notify wider circumstances. A joint-retained solicitor is not, without agreement, the insured’s exclusive agent for notifying other claims to the insurer. A policy’s tax-mitigation endorsement may apply to a combination of investments and loans. Artificiality is an evaluative concept, assessed by comparing the transaction with a normal transaction of an ostensibly similar type. A tax benefit alone does not establish artificiality, but an EIS investment made with tax avoidance as one of its main purposes may be artificial where the statutory scheme requires genuine commercial reasons. Related-claims wording may aggregate claims arising from a related wrongful act even though the individual advice was not identical.

The claimants, investors advised by White & Co or its associated practice, sought indemnity from Allianz under White & Co’s professional indemnity policy. The underlying liability claims concerned EIS, Seed EIS, Super EIS, film-rights, Ober and other investments. The coverage trial addressed the scope of the pleaded claims, whether several communications notified claims or circumstances, the effect of the Tax Mitigation Endorsement, and aggregation under the Related Claims provision.

The court also considered whether communications received or sent by Kennedys, acting under a joint retainer for White & Co and Allianz, could constitute notification by the insured. The central questions were whether the alleged notifications complied with the policy and minimum terms, what they covered, and whether the claims fell within the policy’s tax-mitigation and aggregation provisions.

1. Scope of claims. The pleaded Schedule identified the relevant investments sufficiently for Seed EIS and Ober investments to fall within the claim, despite inaccurate or incomplete labelling. No material prejudice was shown. [120]–[135]
2. Akbar Letters. The letters notified the Initial Akbar Claimants’ claims concerning specified companies. They did not notify wider circumstances to Allianz. A reasonable person in White & Co’s position, considering its own knowledge of its practice together with the letters, would nevertheless have appreciated that similar claims might be made by other investors concerning the named and similar investments. The emails to Allianz, however, notified the Initial Akbar Claimants’ Claim and supplied further particulars; they did not notify wider circumstances. [141]–[172]
3. Block Notification. White & Co knew that clients might complain that EIS, Seed EIS and Super EIS investments did not deliver the tax benefits advised. But the communications, objectively construed, were clarified as relating to MKP rather than White & Co. They therefore did not notify Allianz of circumstances giving rise to claims against White & Co. [182]–[209]
4. Kennedys Documents. White & Co actually received the October Letters. Kennedys sent the First November Emails under the joint retainer, not as White & Co’s exclusive agent for notification. The notification condition was a condition precedent. Receipt of the 19 October Letter by Allianz therefore did not satisfy the requirement that notification be given by the insured. The 22 October Letter similarly could not constitute notification through Kennedys. If the agency point had been decided differently, the documents would have amounted to a valid hornet’s-nest notification of wider circumstances. [210]–[285]
5. Tax Mitigation Endorsement. The endorsement could apply to one or more loans or investments, or a combination. Artificiality required an evaluative comparison with a normal transaction of an ostensibly similar type. The relevant purpose could be that of the investor, adviser or scheme designer. The court rejected treating tax avoidance, investor conduct, or investment failure as automatic proxies for artificiality. All Sample Claimants’ EIS, Seed EIS, Super EIS and FRB investments fell within the endorsement; alternatively, the identified inherently artificial investments did so. [286]–[360]
6. Related Claims. Notification and aggregation were conceptually distinct. Claims based on EIS, Seed EIS and Super EIS investments arose from a related wrongful act and were aggregated into one limit. The other investment categories were only very similar and were not aggregated. [361]–[379]
7. Orders. Permission was granted to re-re-amend the Particulars of Claim in the agreed form, with consequential permission for limited further amendments to the Defence and Reply. [380]