British COVID-19 Legal Case Headed to UK’s Supreme Court

In the Spring of this year, when COVID-19 first began impacting the world’s economy and businesses all over the planet, the word everyone seemed to be using to try to describe what was happening was “unprecedented”. An “unprecedented interruption” as I called it in a blog post you can find here: http://morrisandreynolds.com/an-unprecedented-interruption/.

Seven months later, the damage that the virus has done and is doing to so many, whether directly impacting businesses and their workers or forcing them to close for a period of time as a result of public health safety measures, is still hard to contemplate. Rarely has commerce been so widely and severely impacted in the history of mankind.

In a case that is likely being watched around the world, London’s High Court has approved a request to allow a business interruption lawsuit, one that could reportedly impact hundreds of thousands of businesses in the United Kingdom, circumvent the typical appeals court process and allow it to go directly to their Supreme Court.

You can read about this development in an article that appeared in Monday, October 5th’s Insurance Journal here:

UK COVID business interruption appeal approved to ‘leapfrog’ to Supreme Court

By Erin Ayers, Advisen

London’s High Court on Friday approved requests to “leapfrog” the appeal of a recent ruling applying to potentially hundreds of thousands of COVID-19-related business interruption claims in the UK directly to the Supreme Court.

Earlier this year, the UK’s Financial Conduct Authority asked eight insurers to participate in a “test case” to determine whether policies providing cover for non-damage business interruption losses should have paid out.

The High Court ruled on Sept. 15 that many of the claims should not have been denied by six of the eight insurers, based on the language of policies that offered coverage for events where insureds cannot access their properties, including viral contamination in some cases.

The FCA asked Arch, Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE, Royal & Sun Alliance, and Zurich to participate in the test case. The High Court found in favor of policyholders in the case of most insurers, but the policies of Zurich and Ecclesiastical held up.

FCA expressed disappointment that the case will continue, commenting, “We had hoped to reach an agreement with the insurers by today on the interpretation of some important elements of the judgment affecting which small businesses get paid and how much. This would have allowed for faster pay-out for policyholders with eligible claims. However, we recognize that this case has always involved complex issues.”

The final ruling is estimated to affect up to 370,000 policyholders and considered 21 policy wordings used by an estimated 60 insurers.

We will continue to monitor this and other cases around the world including here in the United States and update you as news arrives. Until then, please contact the professional agents and underwriters here at Morris & Reynolds with any questions you have about this topic or any other as we are happy to assist. 305.238.1000.

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