Court of Appeal decision in multi million pound fraud case could impact estate agencies

The following article is published with the permission of its author, Neil Rose, the editor of legalfutures.

The decision by the Court of Appeal in this case has relevance to the estate agency industry where cases of multiple fraud by an individual within a firm may occur.


The Court of Appeal has upheld a decision not to aggregate as one the claims that a Yorkshire law firm’s indemnity insurer is facing because of a multi-million pound fraud run by one partner.

The court rejected the argument that all of the claims, which occurred over 12 years, should be aggregated because they arose from acts that were related by the dishonesty of Linda Box.

Instead, it backed the decision of His Honour Judge Saffman in Leeds, sitting as a High Court judge, that the claims “do not have a sufficient interconnection or unifying factor” to engage the aggregation clause, which was in line with the Solicitors Regulation Authority’s minimum terms and conditions.

HDI Global Speciality (formerly Hannover) has already paid out £2m to former clients of Wakefield firm Dixon Coles McGill and was trying to prevent paying any more.

Ms Box, who was senior partner of the three-partner firm, pleaded guilty in 2017 to nine counts of fraud, two of forgery and one of theft, and was sentenced to seven years in prison.

Over the course of 12 years, she stole at least £4m – and maybe as much as £10m – mainly from estates, to fund a lavish lifestyle.

The Solicitors Regulation Authority shut down the 200-year-old firm in April 2016 in the wake of Ms Box’s two partners uncovering the fraud. There is no suggestion that they knew what was happening. She was struck off the same year.

There are two claims being brought against the other partners, the firm and its insurer, which are being case managed together but have not been joined.

The claimants in one are Guide Dogs for the Blind Association, Yorkshire Cancer Research, the British Heart Foundation and the National Trust – as beneficiaries of an estate that Ms Box plundered – and in the other the Bishop of Leeds and the Leeds Diocesan Board of Finance on behalf of the church, which was a client of the firm.

On appeal, HDI argued that Ms Box’s thefts met the aggregation test of being a series of acts and omissions which were related because they all they formed part of an extended course of dishonest conduct over many years.

However, Lord Justice Nugee, giving the court’s unanimous decision, said HDI had failed to distinguish the comments on aggregation clauses by Lord Hoffman in the 2003 TSB case in House of Lords, which required there to be more than simply a continuous course of dishonest conduct.

Nugee LJ summarised Lord Hoffman’s approach: “If there is a series of acts A, B and C, it is not enough that act A causes claim A, act B causes claim B and act C causes claim C.

“What is required is that claim A is caused by the series of acts A, B and C; claim B is also caused by the same series of acts; and claim C too…

“That requirement would only be satisfied if each of the Bishop’s claim and the Scholefield claimants’ claim arose from the combination of both thefts.

“But this would obviously not be so: the Bishop’s claim would arise from the theft from the Bishop of Wakefield Fund and have nothing to do with the quite separate theft from the Scholefield estate, and conversely with the Scholefield claimants’ claim.

“Neither claim would therefore arise from a related series of acts.”

Nugee LJ dismissed in short order a second ground of appeal, that there was in any event only one ‘claim’ as defined in the policy.

Last month, in an appeal on a separate issue arising from HHJ Saffman’s ruling, a differently constituted Court of Appeal held that the two innocent partners could rely on a limitation defence after being sued for the losses caused.


This article, written by Neil Rose, was first published on the legalfutures website.



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One Comment

  1. Woodentop

    Aggregate as one has been endemic in the UK legal system for decades and often used as a convenience, just like concurrent sentences? One thing the Americans got right is consecutive penalties, throw the keys away for these serial offenders.


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