Business interruption insurance – test case update – judgment expected in December or January

This is a very brief overview of very recent developments and is most definitely not an analysis of the arguments raised earlier this month before the Supreme Court, other than by way of a reminder that:

  1. the competing arguments of the parties – the FCA and the interested insurers – focus on the question of whether or not the range of representative business interruption (BI) wordings provide indemnity for operating losses sustained by policyholders during the first ‘lockdown’ of 2020, and
  2. the decision at first instance examined this by grouping the relevant clauses into three broad types – disease clauses, prevention of access clauses and hybrid clauses – interpreting each in its context, dealing with causation, prevalence of Covid-19, counterfactuals and with the effect on claims adjustment of so-called ‘trends’ clauses.
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Business interruption insurance test case fast-tracked to Supreme Court

To recap, the High Court gave permission in October for parties’ ‘leap frog’ appeals to the Supreme Court (SC) following its decision in September. Now, on 2 November, the SC has agreed to hear the appeals. That was widely expected but what is much more unusual is that the SC hearing will take place only a fortnight later, beginning on Monday 16 November.

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FCA BI insurance test case ‘leapfrogs’ onwards

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.

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