The ‘consequentials’ hearing in the business interruption test case took place on Friday 2 October. The FCA’s website will be updated in due course with the transcript of the proceedings and the final order required to give effect to the judgment given in mid-September. Pending that, the executive summary (as it were) is that the court agreed to grant leapfrog certificates to all parties and interveners to appeal directly to the Supreme Court.
The leapfrog grants were confirmed on the FCA’s website on Friday evening and mean that, from this point forward, the test case will be subject to the procedural requirements and timetables of the Supreme Court, assuming it in its turn grants permission to appeal after having reviewed the formal grounds submitted to it in furtherance of the leapfrog certificates.
As might be inferred from the word ‘leapfrog’, the direct appeal to the Supreme Court bypasses the Court of Appeal. Nevertheless, the judges (Flaux LJ and Butcher J) agreed to grant permission to appeal to the Court of Appeal as a fall-back (or belt and braces) in the event that the Supreme Court was to refuse to hear the case.
At this stage that seems rather unlikely, given the significance of the test case and the need for a final judicial resolution of the issues involved as soon as possible. Flaux LJ noted that “If their Lordships grant permission, which I would apprehend they will…” and went on to comment on the test for leapfrogging. That is set out in the Administration of Justice Act 1969 and just one of three specified possibilities must be satisfied. Those are that:
- the proceedings entail a decision relating to a matter of national importance or consideration of such a matter,
- the result of the proceedings is so significant (whether considered on its own or together with other proceedings or likely proceedings) that, in the opinion of the judge, a hearing by the Supreme Court is justified, or
- the judge is satisfied that the benefits of earlier consideration by the Supreme Court outweigh the benefits of consideration by the Court of Appeal.
In acceding to the leapfrog requests, Flaux LJ observed that all of these were satisfied by the test case. It is far from difficult to disagree with that conclusion given the size, scope and potential impact of the outcome of the case.
So the takeaway points are that the test case is heading for the Supreme Court and looks likely to get there fairly soon.
Whether it secures a hearing there before the year end is unclear at present, but all parties’ shared goals of achieving legal clarity (on whether there is ‘in principle’ coverage under the selected non-damage BI policy wordings) with minimal delay would seem to weigh strongly in favour of that. The practical and logistical challenge will be whether the Court is able to find the necessary few days’ room in its listings for this term.
A final twist is that there still may be some chance of the FCA and insurers reaching a settlement without further judicial ruling. The regulator repeated on Friday evening that it is “pressing on with the application to appeal to the Supreme Court while continuing discussions with insurers and action groups to find a solution that avoids the need for appeal and enables pay-outs on eligible claims as quickly as possible.”