Simon Bean, Partner and Head of Dispute Resolution at Wollens.
Earlier today (15th September 2020), the judgement of the High Court was handed down in the test case brought by the FCA. The purpose of the case was to clarify whether the business interruption insurance cover included in many insurance policies has been engaged by the Covid-19 pandemic and the government’s response to it. Representative samples of policy wordings from eight insurers were considered by the Court, and the cases for the FCA (on behalf of policy holders) and the insurers were heard in late July.
Unsurprisingly, the judgement is substantial, running to some 162 pages. From the point of view of policy holders, however, the judgment is largely favourable, resolving certain key issues in favour of policy holders. For example, the court found that most (but not all) of the “disease wordings” providing cover for interruption arising from a notifiable disease within a certain distance (and there were various forms of this wording considered) would provide cover. The court also found that the pandemic and the response to it (by the government and the public) should be viewed as a single cause of loss, finding against various arguments that loss was not caused by the pandemic, but by the reaction to it.
Although this news is very positive for policy holders, each claim will still need to be considered on its own facts and merits and against this judgment (and any appeal). Indeed, although it is open to policy holders to press on with their claims at this stage, it is likely that the judgment will be appealed. In line with the speed that the court has taken to date with this case, it is also likely that any appeal will be heard as soon as possible, and possibly by the Supreme Court (“leapfrogging” the Court of Appeal).
More here from the BBC https://www.bbc.co.uk/news/business-54158830
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