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The Rolls Building, Royal Courts of Justice, London<\/p>\n<\/p><\/div>\n
An eagerly anticipated test case on coronavirus-related litigation starts in London this week<\/p>\n
\n\tTest case litigation for business-related Covid-19 insurance claims that could pave the way to billions of pounds in business interruption payouts to impacted policyholders\u00a0starts in the High Court today.<\/p>\n
\n\tThe case is being brought by the Financial Conduct Authority, the UK financial services regulator, and seeks clarity on the interpretation of business interruption (BI) insurance policies for both policyholders and insurers by judicially testing 17 representative wordings.\u00a0<\/p>\n
\n\tThe case, fast-tracked to be heard in the Financial List<\/a> of the Commercial Court, pits the FCA against eight insurers in allowing or disallowing Covid-19-related BI claims, and thus deciding if cover would be provided<\/a>.\u00a0<\/p>\n
\n\tChristopher Woolard, interim chief executive at the FCA, said: \u201cThe court action we are taking is aimed at providing clarity and certainty for everyone involved in these BI disputes, policyholder and insurer alike. We feel it is also the quickest route to this clarity and by covering multiple policies and insurers; it will also be of most use across the market.\u201d<\/p>\n
\n\tThe FCA said it was bringing the case under the Financial Markets Test Case Scheme to explore \u201ckey contractual uncertainties and causation issues<\/a> to provide clarity for policyholders and insurers,\u201d which it said was \u201cin the public interest to advance [the FCA\u2019s] consumer protection and market integrity objectives\u201d.<\/p>\n
\n\tThe case is being heard by Lord Justice Flaux and Mr Justice Butcher, both highly experienced commercial judges, and insurance specialists when at the Bar. It is listed for eight days, and will be live-streamed here<\/a>.\u00a0<\/p>\n
\n\tThe FCA are represented by Paul Lewis of City law firm Herbert Smith Freehills, with Devereux Chambers\u2019 insurance silk Colin Edelman QC leading, and Leigh-Ann Mulcahy QC and Richard Coleman QC of Fountain Court in support.\u00a0<\/p>\n
\n\tAgainst the FCA are eight insurers, selected as representative claimants at a previous case management hearing, including industry names such as Arch Insurance, Hiscox, Amlin, Royal & Sun Alliance, Zurich, and others. While the result will be binding on them, its impact will certainly be highly persuasive and possibly conclusive\u00a0on up to 50 more<\/a>, as well as on Lloyds of London.\u00a0<\/p>\n
\n\tThe eight law firms representing the test defendants include Davies Arnold Cooper Beachcroft, which represents two insurers, Amlin and Ecclesiastical; Hiscox is represented by Allen & Overy, led by Joanna Page; Simmons & Simmons represents Argenta; Clyde & Co represents Arch Insurance, QBE, and RSA, led by Neil Beresford, Richard Vaughan Price, and Mark Wing. RSA are being represented by DWF.\u00a0<\/p>\n
\n\tCounsel in the case range from 7 King\u2019s Bench Walk, which has significant representation across the defence, including superstar silks Gavin Kealey QC and Jonathan Gaisman QC, plus leading and junior counsel from Brick Court Chambers, 4 New Square, Essex Court, and others. The Association of British Insurers has taken a close interest, as has the Forum of Insurance Lawyers.\u00a0<\/p>\n
\n\tAn action group of affected policyholders, the Hiscox Action Group\u2014represented by Mishcon de Reya, and led by Richard Leedham\u2014were also allowed to intervene in the case.<\/p>\n
\n\tHiscox said it was “seeking expedited resolution of any contract dispute” of that related claim. In response, Leedham said the case aimed to “explain exactly why these policies should pay out and show the damage this refusal is doing to hundreds if not thousands of British businesses.”\u00a0<\/p>\n
\n\tThe case continues.\u00a0<\/p>\n
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