The recent decision in Ahmed v White & Co [2025] EWHC 2399 (Comm) provides guidance on the application of notification and aggregation clauses within professional indemnity (PI) policies. The case has significant ramifications for tax advisers, insurance brokers, insureds and PI insurers: it sets out what constitutes valid notification of circumstances and when multiple claims may be aggregated as a single claim under policy wording. This article analyses the decision and explores its practical implications.

Background

In Ahmed v White & Co, a group of individual investors pursued claims with a value in the region of £50 million against their accountants, White & Co and its associated firm MKP having suffered substantial losses related to investments in various purported tax-efficient investment schemes, including EIS, Seed EIS, Super EIS, Film Rights Business (FRB) ventures, and corporate bonds. The claimants alleged that White & Co provided negligent advice and was in breach of its fiduciary duty to act in the clients’ best interests.

Allianz, as the PI insurer for White & Co and MKP, was brought into proceedings pursuant to the Third Parties (Rights Against Insurers) Act 2010 following White & Co’s insolvency. The Court’s judgment turned on whether Allianz’s policy responded to the claims and, crucially, whether White & Co’s notifications were valid and effective and whether the claims should be aggregated.

Notification: Heightened Risks for Tax Advisers

PI policies typically require prompt and detailed notification of any “circumstance” that may give rise to a claim, and the Allianz policy was no different. In this case, White & Co made three notifications to Allianz which it attempted to argue amounted to a “Hornet’s Nest” notification of circumstances from which later, contested claims arose. These were: 

• The “Akbar Notification” - letters notifying a set of specific claims by named individuals,
• The “Block Notification” - solicitor correspondence informing White & Co about HMRC EIS enquiries arising from the firm’s advice, and
• The “Kennedys Documents” - correspondence between jointly retained defence solicitors acting for White & Co and Allianz.

The Court determined that only the “Block Notification” was valid, and even then, only for claims involving MKP because it didn’t clearly identify White & Co as a potential defendant. The Akbar Notification was too narrow because the language employed didn’t imply potential other claimants and the Kennedys Documents did not qualify because solicitors acting under a joint retainer were not deemed appropriate agents for notification purposes. The Court was clear: informal or indirect communications, even when insurers are otherwise aware, do not satisfy the precise contractual requirements of notification.

For policyholders the risks are clear. Failure to adhere to strict notification conditions and to provide a comprehensive and properly addressed notification risks leaving the policyholder without cover for subsequent claims. Policyholders must ensure that every notification is explicit, directed to the correct entity, and sufficiently broad to capture all potential future claims related to the notified circumstances.

Aggregation: Impact on Claimants’ recoverable losses

The aggregation issue focused on whether multiple claims from different investors, arising from similar or related advice, should be treated as a single claim under the policy’s aggregation clause. The clause in question allowed for aggregation where claims arose out of, were based upon or were attributable to, the same facts, alleged facts or circumstances, or the same or related wrongful acts. The Policy contained a “Tax Mitigation Endorsement” capping the insurers’ liability for all claims relating to “Tax Mitigation Schemes” at £2 million.

The Court found that claims relating to EIS, Seed EIS, and Super EIS investments should be aggregated, because they arose from common advice regarding s165 of the Income Tax Act 2007. While each client’s situation and the advice received may have differed in detail, the underlying deficiency was sufficiently connected to justify aggregation thus the total indemnity available to all claimants was capped at £2 million.

Professional Indemnity Insurers: Policy Clarity and Process

Whilst notification is a fact-sensitive issue, the case is a reminder that unless facts are adequately communicated to insurers in accordance with the specific notification provisions, then notification may not be valid. It is important, therefore for policyholders to notify promptly and to ensure that notifications are neither too broad nor too narrow. A broad notification may provide flexibility if multiple claims arise from the same underlying circumstance but could lead to disputes regarding the causal relationship between the notified circumstance and subsequent claims. Conversely, a narrow notification may risk excluding subsequent claims that fall outside its scope. Consulting with brokers or legal advisers can help policyholders strike the right balance.

The judgment also reiterates established case law principles that aggregation is a matter of contractual interpretation and factual analysis. Well drafted aggregation clauses can serve to limit substantially insurers’ total exposure in PI claims.

Please contact Morag Ofili, Tax Partner, if you have any tax related issues or questions and for any insurance related queries please contact Nicola Maher, Partner, Insurance Disputes.