As you may already be aware from media coverage, yesterday saw The High Court handing down its judgment in the Financial Conduct Authority’s (FCA)’s business interruption insurance test case, full details of which can be found here.
The judgment is complex, runs to over 150 pages and deals with many issues. The FCA’s legal team at Herbert Smith Freehills have published a summary on their website, which may be referred to here for further information.
The Court found in favour of the arguments put forward for policyholders by the FCA on most of the key issues. Although the judgment will bring welcome news for many policyholders, it is important to note that the judgment did not say that the eight defendant insurers are liable across all of the 21 different types of policy wording in the representative sample considered by the Court.
As a result, each policy needs to be considered against the detailed judgment to work out what it means for that policy and any insurer claim decisions, and it is possible that the judgment will be appealed. Any appeal does not preclude policyholders seeking to settle their claims with their insurer before the outcome of any appeal is known.
The FCA and Defendant insurers are now reviewing the details of the judgment and what it might mean in respect of any appeal. Any applications to appeal will be heard at a consequential hearing before the High Court.
The FCA and Defendant insurers have agreed that they will seek to have any appeal heard as quickly as possible, given the importance of the matter for so many policyholders. This includes exploring the possibility of any appeal being a ‘leapfrog’ appeal to the Supreme Court (rather than needing to be heard by the Court of Appeal first).
The FCA will continue to keep policyholders appraised of matters as they progress, through its dedicated webpage.
What this means for you if you are affected:
Policyholders with affected claims can expect to initially hear from their insurer within 7 days of the judgement being handed down. At Adler Insurance we fully appreciate that impacted policyholders will want to know how the ruling affects their claim, but at present this is still a very much developing situation.
We will continue to monitor developments closely and will support our clients throughout the entire process.
Should you have any questions at all about the test case or your business interruption insurance, please get in touch with us and we will be happy to assist.