Latest legal developments and business interruption policies

It is 7 a.m. and the radio alarm has spluttered into action. “Coronavirus” is the first word to be heard although much of the ensuing news features the same dreaded word.

When is this ever going to end? Will it disappear like Brexit did for a while? Well maybe ….but not imminently.

The coronavirus pandemic is likely to have a long and miserable existence for all affected.

My interest is in the so-called “ test” cases. With multiple different wordings and multiple insureds, it was always going to be difficult to strike some form of consensus. But cometh the moment cometh the man. …Or, at least, in this case, now is the time for the mighty FCA to step forward.

Yes, the FCA is seeking to orchestrate some test cases relating to business interruption policies and approached more than fifty insurers and reviewed over five hundred policies from which they identified a representative sample of wordings used as to one or more by sixteen insurers containing the majority of key issues. Eight insurers from the sixteen were picked from the representative sample to assist in the court proceedings.

No less than three QCs and the law firm Herbert Smith has been assembled to advance policyholder’s arguments on behalf of the FCA. Insurers will, no doubt, be supported by equally impressive lawyers.

Further documents have been produced to support the exercise. Comments from all concerned are invited by 3 pm on Friday, 5 June 2020 with a view to a trial hearing In mid-July 2020.

Will this exercise bring closure? Will it lead to some settlements?  In answer to both questions, the position is not clear but it has to be worth a try. All concerned surely deserve praise for steps taken in difficult circumstances.


Important: This blog is not intended to be relied on. It is merely a rough outline of the matter as it stands. It is not a substitute for legal advice which interested parties should seek promptly if in any doubt as to what action they should take.