The following will be of interest to many pubs and other businesses in Ireland considering the effect of Covid-19 on their business interruption policies.
On 15 September 2020, the High Court in the UK (Lord Justice Flaux and Mr Justice Butcher) handed down its judgment in the Financial Conduct Authority’s (FCA)’s business interruption insurance test case. Click here to access the judgment.
The court found in favour of the arguments advanced for policyholders by the FCA on the majority of key issues. 21 sample clause wordings from 8 insurers were considered.
The FCA noted that Coronavirus is causing substantial loss and distress to businesses and many are under financial strain to stay afloat. The FCA’s stated aim throughout the court action was to get clarity for as wide a range of parties as possible, as quickly as possible and the judgment has removed a number of roadblocks to successful claims. The speed of this process is commendable.
While it should be noted that this is a UK judgment, there are clear similarities in the wording of Irish and British policies and legal principles of interpretation. The judgment will be compulsory reading for anyone engaged in busines interruption disputes here.
The judgment is complex, runs to over 150 pages and deals with many issues. It says that most, but not all, of the disease clauses (relating to infections or notifiable infectious diseases) in the sample provide cover. It also says that certain denial of access clauses (non-damage denial of access and public authority closures or restrictions) in the sample provide cover. The judgment addresses interpretation of the sample clause wordings on a case by case basis and will provide interesting comparisons with similar clauses used in Ireland.
The test case clarified that the Covid-19 pandemic and the Government and public response were a single cause of the covered loss, which is a key requirement for claims to be paid even if the policy provides cover.
Our firm has been engaged in a number of such disputed claims in Ireland.