BI insurance appeal to be heard by Supreme Court on 16 November 2020
Last night the FCA announced that the Supreme Court had granted permission to appeal the High Court’s judgment in the business interruption (“BI”) insurance test case to all those who had applied for that permission.
The BI appeal in the Supreme Court will now be heard from 16 November and is expected to last for 4 days. The hearing will be by video link before five Lord Justices: Robert Reed, Patrick Hodge, David Kitchin, Nicholas Hamblen and George Leggatt.
The appeal will focus on disease and prevention of access clauses in the wording of BI policies that were considered by the High Court in the FCA’s test case, as well hybrid wording that includes elements of both clauses.
But the Supreme Court may also examine whether the High Court was correct in its analysis of the precedent set in the controversial 2010 Commercial Court decision in Orient-Express Hotels v Assicurazioni Generali which looked at causation issues in insurance claims. The High Court said in the test case judgment that the decision in Orient Express had no relevance to the test case, but if it had had any relevance then the Court would have ruled that it was “wrongly decided“.
The FCA has said that it considers that this ‘leapfrog’ appeal to the Supreme Court “is the fastest way to get legal clarity for all parties in the event that it is not possible to find a solution with insurers which resolves the outstanding issues, before the appeal takes place, to enable pay-outs on eligible claims“.
As Royal & Sun Alliance has confirmed that it will not be appealing the High Court’s judgment in respect of the RSA4 wording, the Hospitality Insurance Group Action has confirmed that it will not now look to intervene in the Supreme Court appeal.
The swift progress of the case to the Supreme Court should now bring much needed closure and certainty in the very near future to both policyholders and insurers that have been affected by the FCA’s test case (either directly as participants or indirectly as subject to similar wordings in BI insurance policies).