Covid-19 BI claims update: policyholder-friendly judgment in At The Premises litigation
London International Exhibition Centre Plc -v- Royal & Sun Alliance Insurance Plc and others [2023] EWHC 1481 (Comm)
In the latest instalment in the wave of Covid-19 business interruption litigation making its way through the courts since the pandemic, a group of policyholders have been successful in their claim that the Supreme Court’s approach to causation in relation to ‘radius’ wordings should equally apply to the ‘at the premises’ wordings.
This result has a much broader application than simply for the parties to this litigation, and paves the way for large numbers of policyholders on similar wordings to argue that their claims are covered.
The background
While the FCA test case litigation represented a victory for policyholders in many respects, it also left a number of loose ends – one of which this recent ruling ties up in their favour.
With regard to ‘radius’ wordings, that is, business interruption policies that respond to cases of a notifiable disease occurring within a specified radius of the premises, the Supreme Court concluded that that each case of Covid-19 was a concurrent cause of the restrictions. As such, in order to show that loss from interruption of the insured business was proximately caused by one or more occurrences of Covid-19, it was sufficient to prove that the interruption was the result of government action taken in response to cases of disease which included at least one case of Covid-19 within the geographical area covered by the clause.
‘At the premises’ wordings, namely clauses providing for cover for losses caused by restrictions resulting from cases of notifiable diseases at the premises themselves – as opposed to within a specified radius of the premises – were not within the ambit of the FCA test case.
As a result, there was uncertainty as to whether the Supreme Court’s causation analysis was equally applicable to such clauses. This judgment now clarifies that it is.
The policyholders’ position
The claimant policyholders, who included the London International Exhibition Centre the restaurant chain, Pizza Express, as well as a number of smaller businesses including a hairdresser, two gyms, and various hospitality venues, had all suffered significant BI losses as a result of the pandemic, and all had ‘at the premises’ cover as part of their business interruption insurance. Applying the same approach to proximate causation as adopted by the Supreme Court in the FCA test case, they argued that their policies should respond to cover their losses.
The insurers’ position
The insurers disagreed. One of the main themes was that ‘at the premises’ clauses and ‘radius’ clauses provided a “fundamentally and qualitatively different” nature of cover: they were “chalk and cheese”. The fact that they are engaged by incidents of disease at a precise location means that a direct causal connection is required, which in turns requires proof of ‘but for’ causation between the occurrence of disease at the premises, the action by the authorities, the consequent business interruption and loss.
The judgment
Mr Justice Jacobs held that the policyholders were correct in their submission that “at the premises” is simply about the geographical or territorial scope of the coverage, and where the parties have chosen to draw the line in that respect - it has no impact on the appropriate approach to causation. In their analysis, the Supreme Court did not draw a distinction between ‘radius’ clauses where the radius was 25 miles, 1 mile, or the vicinity, and there was no reason why the radius could not be further shrunk from the vicinity to the premises itself without making any difference to the causation analysis. He added that this seemed to him to be an appropriate result, since any other conclusion would give rise to anomalies which it would be difficult rationally to explain to a reasonable SME policyholder who read the policy.
Cover for cases pre-5 March 2020
He did however find for insurers in relation to another issue before the court, namely whether cases of Covid-19 that occurred before it was made a notifiable disease on 5 March 2020 were capable of falling for cover. On the basis that a disease must be notifiable at the time of the occurrence or outbreak he found that they did not qualify. He stated that an approach that asks whether the disease was notifiable at the time of the relevant occurrence was straightforward to apply and perfectly sensible. That this meant that some occurrences would, depending upon when they occur, fall outside coverage was simply the ordinary consequence of the application of the words of the policy.
What next?
This is not the end of the story for Covid-19 claims – the next instalments will come towards the end of the year when another group of policyholders with claims against insurers for business interruption losses under policies with ‘denial of access’ wordings will have their cases heard - closely followed by the appeals in the Stonegate, Various Eateries and Greggs cases – it is very much a case of watch this space!
Joanna Grant is a partner at Fenchurch Law
Worth a Try? – judgment handed down on Rugby Football Union appeal
FM Conway Limited v The Rugby Football Union, Royal & Sun Alliance Insurance PLC, Clark Smith Partnership Limited
The Court of Appeal has handed down its judgment following FM Conway’s appeal of the High Court’s decision that it did not enjoy the same level of cover as its employer. Our previous article commenting on the first instance judgment can be found here.
Summary
The decision regards the potentially complicated factual and legal issues about the nature and extent of insurance cover obtained by one party on behalf of another. It was common ground at the first instance hearing that FM Conway was an insured under the project policy secured for the refurbishment of Twickenham stadium, but the extent of that cover was disputed by insurers.
FM Conway’s appeal was rejected by the Court of Appeal, with the leading judgment from Lord Justice Coulson providing a firm endorsement of Mr Justice Eyre’s decision that FM Conway was not insured under the project policy for damage to existing structures caused by its own defective work, but cover was instead restricted to specified perils in accordance with the (unamended) JCT Option C.
It is clear from the judgment that Lord Justice Coulson was in full agreement with Mr Justice Eyre, referring to his decision as “careful”, “unassailable” and “entirely in accordance with the authorities”.
Issues
The background facts are contained in our previous article but, in short, the underlying claim includes a subrogated claim by RSA in relation to the cost of remediating damaged cables, for which it had indemnified RFU as principal insured. FM Conway raised a co-insurance defence to that claim, asserting that it enjoyed the full benefit of the project policy obtained on its behalf by RFU.
FM Conway appealed the first instance decision on five grounds, albeit ground 1 was clearly FM Conway’s primary argument: whether the High Court applied the correct test for ascertaining the necessary authority and intention of the insuring party, the RFU. It was submitted on behalf of RFU and RSA, and then accepted by Lord Justice Coulson, that if ground 1 failed then so too must grounds 2, 3 and 4 as they were largely variations of the first ground and/ or were contingent on that ground succeeding.
It was held by the Court that Mr Justice Eyre did apply the correct test, given that he “paid particular attention to the underlying contract between the RFU and FM Conway. In that, he was following what Lord Toulson said was the correct approach in Gard Marine”. Lord Justice Coulson went on to say that “in any case where there is an underlying contract … it would be counter-intuitive if that was not at least the starting point for any consideration of authority and intention” to insure.
Lord Justice Coulson went on, as Mr Justice Eyre had in the first instance decision, to make clear that whilst the pre-contractual discussions between representatives for Conway and the RFU, respectively, regarding insurance arrangements could be taken into account (which were the main thrust of Conway’s argument that it had wider cover), they could not displace the clear interpretation of the building contract.
It was affirmed by the Court that “extraneous evidence” of a contrary authority or intention to insure could be relied on (similarly to Mr Justice Eyre’s finding that “compelling evidence” could be relied on), but the relevant investigations “will start (and possibly finish) with the underlying contractual arrangements agreed between the parties”.
The Court also made frequent reference, contrary to FM Conway’s reliance on the witness evidence which it said demonstrated an authority and intention of the RFU to secure wider cover, that both parties were represented by legal and insurance professionals such that had there been an intention to secure wider cover beyond that in Option C of the JCT Contract then it would have been reflected in the building contract ultimately agreed. Lord Justice Coulson said that to adopt FM Conway’s attempt to rely on early/ pre-contract discussions was “untenable” as it would enable a party to “ignore any subsequent stages of the actual negotiations”.
Guidance on co-insurance generally
Following his summary of the law in this area generally, Lord Justice Coulson provided (at paragraph 53 of the judgment) the following guidance in relation to co-insurance:
“53.1 The mere fact that A and B are insured under the same policy does not, by itself, mean that A and B are covered for the same loss or cannot make claims against one another;
53.2 In circumstances where it is alleged that A has procured insurance for B, it will usually be necessary to consider issues such as authority, intention (and the related issue of scope of cover). Such issues are conventionally considered by reference to the law relating to principal and agent …
53.3 An underlying contract between A and B is not a necessary pre-requisite for a proper investigation into authority, intention and scope …
53.4 On the other hand, where there is an underlying contract then, in most cases, it will be much the best place to find evidence of authority, intention and scope …
53.5 That is not to say that the underlying contract will always provide the complete answer. Circumstances may dictate that the court looks in other places for evidence of authority, intention and scope of cover”
Comment
Whilst the result is not surprising (especially as Lord Justice Coulson said that the first instance decision was in accordance with the existing authorities), it represents a clear articulation of the principles in this often complex area.
For policyholders in FM Conway’s shoes, it is key that if there is an intention for contractors to enjoy the same level of cover under the project policy as the employer/ principal insured, that the contractual documents make that clear and, where necessary, any standard forms are appropriately amended. That way, there is no need to look for other compelling or extraneous evidence to demonstrate that wider authority and intention which, as is made clear in the facts of this case, might be difficult to do.
Rob Goodship is an Associate Partner at Fenchurch Law
“Condoning dishonesty”: Discovery Land Co LLC & Ors v Axis Specialty Europe SE
Those dealing with Solicitors’ professional indemnity claims will know that the SRA Minimum Terms are intended to provide very wide cover, and will indemnify claims involving dishonesty unless the dishonest act/omission in question was committed or condoned by all the partners in the firm or by all the members of an LLP.
What is meant in this context by “condoning” was considered in the recent case of Discovery Land Co LLC & Ors v Axis Specialty Europe SE [2023] EWHC 779 (Comm), a decision by Robin Knowles J.
The Claimants were the victims of two multi-million pound frauds carried out by Mr J, a solicitor, who was a Member of Jirehouse Partners LLP and a director of two related legal practices, Jirehouse and Jirehouse Trustees Ltd (collectively, “Jirehouse”). A second person, Mr P, was likewise a member/director of the relevant entities.
Mr P hadn’t been involved with the two frauds - indeed, he resigned shortly after discovering them - but Jirehouse’s professional indemnity insurer (Axis) sought to decline indemnity by arguing that he had nevertheless condoned them.
Axis’s policy provided that
"EXCLUSIONS
The insurer shall have no liability under the policy for:
…
2.8 FRAUD OR DISHONESTY
Any claims directly or indirectly arising out of or in any way involving dishonest or fraudulent acts, errors or omissions committed or condoned by the insured, provided that:
(a) the policy shall nonetheless cover the civil liability of any innocent insured; and
(b) no dishonest or fraudulent act, error or omission shall be imputed to a body corporate unless it was committed or condoned by, in the case of a company, all directors of that company or, in the case of a Limited Liability Partnership, all members of that Limited Liability Partnership."
The court accepted that in this context to “condone” was an ordinary word meaning to convey acceptance or approval, and in some situations it does not require an overt act.
Axis’s case was that the frauds formed part of a longstanding pattern of dishonest behaviour on the part of Mr J, involving the temporary - but still unquestionably prohibited - practice of using client monies to address temporary cashflow problems, and various other dishonest acts, and that Mr P had been aware of or had turned a blind eye to that pattern.
Seemingly supportive of that argument were cases such as Zurich Professional Ltd v Karim [2006] EWHC 3355 (QB) and Goldsmith Williams v Travelers Insurance Co Ltd [2010] EWHC 26 (QB), where it had been held it was sufficient for two partners to have condoned the dishonesty of a third partner (the actual fraudster) when they were aware a persistent course of dishonesty by that partner, even if they weren’t aware of the actual act of fraud which had given rise to the claim.
However, that type of argument failed in this case. Robin Knowles J held that Mr P needed to have condoned the acts through which the two frauds by Mr J had been committed, and that simply condoning the occasions on which Mr J had illicitly “borrowed” client monies or his various other dishonest improprieties wasn’t sufficient.
Robin Knowles J’s assessment of Mr P was as follows:
“In my judgment the true story of this case is that [Mr P’s] standards fell well below those required in his profession. Indeed there are episodes that show he was untrustworthy and prepared to behave dishonestly. But these episodes were not such as to justify a conclusion that he in any way appreciated that [Mr J] could be embarked on multi-million pound fraud, extracting client monies in connection with the commercial entities with which he was involved. [Mr P] did not condone, either generally or specifically in relation to the two claims, what AXIS described in closing as a Ponzi scheme by [Mr J] …”
Robin Knowles J felt able to distinguish the two previous authorities mentioned above on this basis:
“…in Karim the Court accepted that the two condoning partners knew that flows of money out of the firm to themselves could not come legitimately from the income of the firm. In Goldsmith Williams, the Court found that, before the relevant transactions, the condoning partner engaged in mortgage fraud in her own right and knew that her partner did. There are not true parallels between those facts and the facts of the present case.”
Perhaps a more valid point of distinction was that, as the Judge noted in passing, the wording of the policy in this case was subtly different to the Minimum Terms considered in the two earlier cases. Those cases had required an assessment of whether the “dishonesty [of] or [the] fraudulent act or omission [by]” the fraudulent partner had been condoned by the other partner(s). In the present case, the wording of Axis’s policy had been replaced with a reference to the “dishonest or fraudulent acts, errors or omissions” committed by the fraudulent partner. Accordingly, condoning a general pattern of dishonesty was plainly not enough: the other partner must have condoned some specific dishonest acts or omission with which the claim in question was directly or indirectly involved.
The full judgment can be found here:
https://www.bailii.org/ew/cases/EWHC/Comm/2023/779.html
Jonathan Corman is a Partner at Fenchurch Law
Still on the starting block? Implications of blockchain for the Insurance Industry
Blockchain is a digital ledger technology that allows for secure and transparent record-keeping of transactions without the need for a centralised intermediary. It is a distributed database that is used to maintain a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data, and is open to inspection by all participants to the ledger. Once a block is added to the chain, it cannot be altered or deleted, making the blockchain tamper-resistant and immutable.
Blockchain technology is best known for its use in cryptocurrencies, such as Bitcoin, where it is used to securely record and verify transactions. However, the nascent technology has potential to enhance the business model of insurers, brokers and policyholders.
Potential benefits of blockchain
- Transparency
One of the primary benefits of blockchain for the insurance industry is increased transparency. Policies can be complex and confusing for consumer policyholders and blockchain can be used to expediate and simplify claims handling. For example, the UK start-up InsurETH is developing a flight insurance policy that utilises blockchain and smart contracts. When a verified flight data source signals that a flight has been delayed or cancelled, the smart contract pays out automatically. This type of policy can improve trust between the insurer and customer, as the policies exist on a shared ledger that is accessible to both and there is little or no scope for dispute as to when an indemnity should be provided.
- Fraud Prevention
Another issue within insurance, especially consumer insurance, is fraudulent claims. The ABI detected over 95,000 dishonest insurance claims in 2020 alone with an estimated combined value of £1.1 billion. Blockchain could significantly assist with preventing fraud by providing a secure and transparent way to record and verify claims made. While the process would require extensive cooperation between parties, it is perfectly plausible (and indeed likely in the future) that blockchain could substantially reduce fraud by cross-referencing police reports in theft claims, verifying documents such as medical reports in healthcare claims, and authenticating individual identities across all claims.
- Efficiency
Underpinning the above two points is blockchain’s clear potential to reduce operational costs. The technology’s automated nature can cut out middle men and streamline the insurance process. Another UK start-up, Tradle, has developed a blockchain solution that expediates ‘Know your customer’ checks – a time-consuming process for companies and a source of annoyance for clients. Tradle’s technology verifies the information once, and then the customer can pass a secure ‘key’ to whoever else may have a regulatory requirement to verify identity and source of funds. This simple utilisation of blockchain saves time and money in what is usually a tedious process.
Possible issues
- Participants (standardisation)
Blockchain’s potential impact may be impeded, however, by various issues preventing a revolutionary deployment of the technology. As pointed out above, there needs be a wide level of consensus for blockchain to work properly. There is currently no standardisation in the Market in relation to how and when the technology should be implemented, and participants are understandably cautious about making investment into blockchain when there is no guarantee that it will initiate efficient solutions (due to the current ‘state of play’). Consensus among competitors will take time to evolve. It is telling that the two companies mentioned above as ones who use blockchain are start-ups – the traditional Market is somewhat glacial.
- Scalability
And even if the London Market effected a wholesale adoption of blockchain tomorrow, there could be issues of scalability. Blockchain relies on an ever-increasing storage of data, meaning that the longer the blockchain becomes the more demanding the need for bandwidth, storage and computer power. The data firm iDiscovery Solutions found that 90% of the world’s data was created in the last two years, and there will be 10 times the amount of data created this year compared to last. Some firms may be faced with the reality that they do not have the computational hardware and capacity to provide for the technology, especially when the blockchains will be fed by data that is ever-increasing in terms of quantity and complexity.
- London Market use?
Finally, questions arise about exactly which insurance contracts stand the most to gain from blockchain. Consumers would certainly benefit from smart contracts with their home/health/travel insurance policies. But within sophisticated non-consumer insurance, where the figures are large but the number of parties involved is limited, it is questionable whether current transaction models need blockchain. Where there is trust between a policyholder and broker, and a personal relationship between the broker and the underwriter (as is often the case at Lloyd’s), it is unclear what blockchain would really add to the process. It is worth mentioning that in late 2016 Aegon, Allianz, Munich Re and Swiss Re formed a joint venture known as B3i to explore the potential use of Distributed Ledger Technologies within the industry. B3i filed for insolvency in July 2022 after failing to raise new capital in recent funding rounds. It seems, at least in relation to the London Market, blockchain will have a slower, organic impact as opposed to revolutionising the industry.
Dru Corfield is an Associate at Fenchurch Law
Covid BI claim jurisdiction overturned on appeal
In Al Mana Lifestyle Trading LLC & others v United Fidelity Insurance Co PSC & others [2023] EWCA Civ 61, the Court of Appeal (by a 2:1 majority) held the English courts did not have jurisdiction to hear business interruption claims pursued under multi-risk insurance policies issued in the Middle East, reversing the first instance decision.
The claimants operate in the food, beverage and retail sectors and sought recovery of around $40 million losses arising from the pandemic, against defendant insurers located in the UAE, Qatar and Kuwait. A dispute arose concerning interpretation of the following clause contained in the policies:
“APPLICABLE LAW AND JURISDICTION
In accordance with the jurisdiction, local laws and practices of the country in which the policy is issued. Otherwise England and Wales UK Jurisdiction shall be applied,
Under liability jurisdiction will be extended to worldwide excluding USA and Canada.”
The Commercial Court construed this as a non-exclusive jurisdiction provision, allowing proceedings to be brought either in the country where the policy was issued or England & Wales. The policies had been issued as part of a suite of insurances intended to provide comprehensive cover for group operations in numerous jurisdictions, reinsured in the international market, and the court was influenced by the commercial advantage of facilitating resolution of disputes through a single neutral venue. In reaching this decision, Cockerill J noted that English courts are: “particularly well-versed in the issues relating to claims for indemnity for Covid-related business interruption losses [and] highly experienced in dealing with issues of foreign law, where they arise.”
The Court of Appeal agreed that the question to be determined was how the words of the contract would be understood by a reasonable policyholder. Of central importance was the adverbial conjunction “otherwise” - which could be taken to mean, for example, “or”, “or else”, “alternatively”, “if not” - and its impact on surrounding provisions in the context of this clause. A degree of choice was implicit but did the clause provide for a true “either/or” alternative; or a conditional “primary/secondary” position?
By a majority (Males LJ and Nugee LJ), their Lordships allowed the appeal and decided that the clause gave exclusive jurisdiction to the courts in the country in which each policy was issued. Only if the jurisdiction of the local court is not available would the courts of England & Wales have jurisdiction in relation to claims under the policy. Males LJ saw no reason why parties should not agree to confer jurisdiction on one court, with another as a fall-back in case the primary choice was not available. The word “otherwise” was therefore construed as equivalent to “if not available”, as opposed to “if not fancied by whichever party is the claimant”.
In a dissenting judgment, Andrews LJ took a different view: “Whereas the defendants' interpretation might commend itself to a commercial lawyer, I doubt it would even occur to the reasonable policyholder, appraised of all the relevant circumstances, that it could be understood as meaning that it was mandatory to bring proceedings in the local forum, and that they could not go to the English court unless they could establish that the local court had declined, or would decline jurisdiction. They would understand it to mean that if, for whatever reason, they did not bring proceedings in the local forum, they would have to do so in England and Wales."
It is striking to note the opposing conclusions reached by senior judiciary in this case, applying the same test of contractual interpretation. The inherent complexity of construing ambiguous language was acknowledged by Nugee LJ (at paragraph 63): "It must be admitted … it is not always easy to articulate with precision why one reading of a disputed provision seems more natural and ordinary than another, as the way in which language strikes a reader is an accumulation of experience of how language is ordinarily used. And, as the present case illustrates, the same words may strike different readers differently".
Policy wordings should be carefully considered prior to inception of the indemnity period to ensure the parties’ intention is clearly expressed. Jurisdiction and other important provisions dealing with alternative scenarios in a single clause require proper explanation as to triggering events and orders of application. Particular caution should be exercised in the use of words with multiple meanings, to minimise the prospect of disputes.
Amy Lacey is a Partner at Fenchurch Law
Building a safer future: the courts’ approach to fire safety cases
The Grenfell tragedy in 2017 has prompted safety investigations in myriad buildings across the UK, with owners and occupiers questioning whether other settings are similarly defective. Many disputes have arisen, with a handful of cases now determined following trials in the Technology & Construction Court. Overall the courts have adopted a robust approach to responsibility for cladding defects, rejecting typical defence arguments around scope of duty, causation and assessment of loss.
Recent Judgments
Martlet Homes Ltd v Mulalley & Co. Ltd
In July 2022, the claimant was awarded £8 million in damages to remediate high rise residential blocks in Gosport where a “StoTherm Classic” cladding system, including combustible expanded polystyrene insulation, had been applied to external walls during refurbishment in 2005 - 2008. This was held to contravene fire safety standards (the specification breach case), and the system had been defectively installed with inadequate fire breaks (the installation breach case). Costs incurred in removal and replacement of the cladding with a non-combustible alternative could be recovered, together with expenses of a waking watch fire patrol interim measure.
St James’s Oncology SPC Ltd v Lendlease Construction (Europe) Ltd & another
In October 2022, a company set up by Leeds Teaching Hospitals NHS Trust to deliver a new oncology centre was successful in its £5 million claim against Lendlease, based on fire safety and electrical engineering defects to an internal plant room. The defendants’ argument that derogation from applicable standards had been approved by all parties in a revised fire strategy document was rejected, given the overriding contract obligations: “Lendlease was at all times responsible for the design of the Works and for achieving compliance with the requirements of the D&B Contract, irrespective of any review, approval or comments made by Project Co and/or the Trust. This seems … to render the question of approval otiose”.
LDC (Portfolio One) Ltd v George Downing Construction Ltd & European Sheeting Ltd
In December 2022, the owner of student accommodation blocks in Manchester secured judgment in excess of £21 million for remedial works and lost rental income, against a specialist sub-contractor responsible for inadequate fire stopping/barriers, and composite cladding defects which led to substantial water ingress. The claimant and first defendant agreed to settle the claims between them for c. £17 million shortly before trial; the second defendant was insolvent and unrepresented at the hearing, which proceeded in any event as the liquidator could not consent to judgment being entered.
Performance Standards
The defendant contractors were in each case appointed pursuant to JCT Design and Build Contracts, with terms including an unqualified design and specification duty, obligation to comply with statutory requirements, and duty to exercise reasonable skill and care.
The judgments include discussion on performance standards and reaffirm the MT Hojgaard [2017] UKSC 59 principle, that - if there are two clauses imposing different or inconsistent design requirements, the courts are likely to interpret the less demanding clause as a minimum obligation, since treating it as qualifying the other clause gives a meaning which effectively renders the more demanding provision redundant.
The St James’s Oncology and LDC (Portfolio One) cases illustrate how bespoke amendments to standard form contracts may be used to improve prospects for recovery down the contractual chain, through “back to back” requirements for sub-contractors to indemnify the employer against liability arising under the main contract as a result of sub-contract breaches, and acknowledging that associated losses are within the parties' contemplation.
Building Regulations
The analysis of statutory requirements is particularly illuminating, in view of ubiquitous disputes over interpretation of relevant provisions now acknowledged by the government to have been “faulty and ambiguous”.
In Martlet v Mulalley, the judge concluded that Approved Document B (“ADB”), Fire Safety, 2000 edition (with 2002 amendments) does not mean that whatever was not expressly prohibited was permitted and acceptable; and ADB, 2006 edition, marked a significant change in guidance from the earlier regime, with only materials of limited combustibility to be used as external wall insulation in buildings over 18 metres.
Further, the Building Regulations 2000, Schedule 1, B(4)1 requirement for external walls to “adequately” resist the spread of fire, having regard to a building’s height, use and position, turned on whether the contractor had followed guidance in BRE 135 (2003), which recommended that combustible cladding should not be used on high rise residential blocks unless it met the Annex A performance standard in accordance with the test method set by British Standard 8414-1. It was not sufficient to “blindly” rely on a British Board of Agrement (BBA) certificate for the cladding system.
Negligence
The selection and use of a cladding system with combustible EPS insulation in Martlet v Mulalley was in breach of the contractor’s obligation to exercise the degree of skill and care in its design of the work as would an architect or other professional designer.
In reaching this decision, the judge rejected defence arguments to the effect that they cannot have been negligent because everyone else was making the same mistakes. On a proper application of the Bolam principle, there must be “evidence of a responsible body of opinion that has identified and considered the relevant risks or events and which can demonstrate a logical and rational basis for the course of conduct or advice that is under scrutiny”. A defendant is not exonerated simply by proving that others were equally negligent (199 Knightsbridge Development Ltd v WSP UK Ltd [2014]).
Negligent design in relation to cladding works means that professional indemnity policies are likely to be triggered, and exclusions for contractual liabilities won’t usually apply.
Failure to comply with building regulations may be strong evidence of breach of a designer’s duty to exercise reasonable skill and care, in the absence of an express clause requiring adherence to statutory requirements, as discussed in LDC (Portfolio One).
Causation
Another defence commonly raised in cladding disputes is that enhanced fire safety standards implemented after completion of the contract works, and/or the changed regulatory perspective post-Grenfell, are the true cause of remedial action undertaken or proposed. This was rejected in Martlet v Mulalley, with the judge suggesting that an “effective cause” test would be more appropriate to a “but for” standard in this case, to avoid the claimant being left without a remedy.
Had the building owner succeeded only on the installation breach, it could have recovered the cost of repairing defects but not those of replacing the cladding. Both the installation and specification breach cases were upheld on the facts, so the owner was entitled to recover replacement costs.
Remedial Costs
In St James’s Oncology, the defendants’ argument that there was no intention to carry out remedial works was dismissed. The court is not normally concerned with how the claimant will use any damages awarded, providing the loss can be established, although intention may be relevant to the reasonableness of reinstatement and thereby the extent of loss. It was legitimate (and prudent) for the claimant to take account of commercial considerations and await conclusion of the proceedings before commencing planned remediation, given the defendants’ complete denial of liability until shortly before trial.
Remedial works to the Gosport towers were already complete when Martlet v Mulalley reached trial. Costs incurred are the starting point for what is reasonable in such cases, especially if works are carried out based on expert advice. The claimant has a duty to mitigate loss, “but the court will not be too critical of choices made as a matter of urgency or on incomplete information”. It is not sufficient that defects could have been rectified more cheaply; the defendant must prove the remedial scheme was unreasonable.
Further, the costs of temporary measures such as waking watch patrols are likely to be recoverable. The judge in Martlet v Mulalley dismissed the suggestion that this aspect of the claim was too remote, saying that any lack of awareness of the potential need for such interim protections in the context of combustible cladding was more reflective of a “culture of endemic complacency” than any reasoned assessment.
Where works of repair or reinstatement result in the claimant having a better or newer building than it would otherwise have had, a deduction for "betterment" will not usually be made if the claimant has no reasonable choice (Harbutt’s Plasticine v Wayne Tank [1970]). This includes betterment resulting from compliance with legislation introduced since the original works were carried out, imposing additional or enhanced standards.
Looking Ahead
The emerging direction of travel underlines the difficulty for designers (and insurers) in defending these types of claims.
The Building Safety Act 2022 provides further impetus on cladding disputes, introducing new causes of action for defective works and construction products, subject to a maximum 30 years’ retrospective limitation period. The Grenfell Inquiry phase 2 report is due for publication later this year, with Sir Martin Moore Bick’s findings expected to significantly impact upon the liability landscape, and potential manufacturer claims in particular.
Owners will look to progress claims swiftly in light of insolvency risks, with expert technical and quantum evidence crucial in justifying schemes of remedial work. Construction professionals with cladding exposures will be keen to extricate themselves through commercial settlements, whilst pursuing possible recoveries. Moving forward, contractors should endeavour to agree supply chains on back to back terms with their main contract, to limit exposures and improve prospects in the event of breach.
The courts’ focus on ensuring that buildings are made safe and compliant with current statutory requirements is closely aligned with public policy. Further developments in this area, including jurisprudence around Building Liability Orders and s.38 of the Building Act 1984, for example, are eagerly anticipated.
Authors:
Amy Lacey is a Partner at Fenchurch Law
Grace Williams is an Associate at Fenchurch Law
(New Home) Buyer Beware
Recent case law highlights the importance of adequate insurance cover for buyers of new homes, to remediate any latent defects identified post-completion, whilst the Building Safety Act 2022 implements significant changes to the new build warranty landscape.
In Griffiths and another v Gilbert [2022] EWHC 3122 (TCC) (6 December 2022), HHJ Sarah Watson (Principal Judge of the Technology and Construction Court in Birmingham) dismissed allegations that a director of the building contractor responsible for construction of the claimants’ property had fraudulently misrepresented that £2 million worth of NHBC cover would be obtained, covering the full build cost, rather than the standard £1 million limit for defects claims under the NHBC Buildmark policy.
After practical completion, a dispute arose concerning building defects and contamination of surrounding land. The claimants referred matters to the NHBC's dispute resolution service but subsequently withdrew from the process, unhappy with the initial response. Court proceedings alleging personal liability for fraudulent misrepresentation were commenced in 2014 and then stayed, pending the outcome of an arbitration pursued by the claimants against the contractor. In 2018 the arbitrator awarded substantial damages and costs to the claimants, which the contractor was unable to meet, and it went into insolvent liquidation. The claimants successfully recovered £1 million under the NHBC warranty, and court proceedings against the director were revived seeking recovery of outstanding losses.
The Judge held that elements of the tort of deceit were not made out in this case and the fraudulent misrepresentation claim failed. The director had confirmed the property would be built to NHBC standards and a Buildmark warranty would be obtained, but premium figures in the contract costings were estimates not representations. It was inherently unlikely the contractor would fraudulently represent the situation to save a small fee on a £2 million contract, knowing this would come to light when the NHBC certificate was provided. Further, NHBC was advised of the sale price at the outset with no question of “underinsurance”, analogous to standard property policies, where claims might be reduced if a building was insured for less than full reinstatement costs.
The judgment illustrates the limitations of new home warranties and how parties can extend the scope of cover for a price. In 2011, NHBC had offered to increase the cover to £2 million for an additional fee of approximately £4,500 but that proposal was not accepted by the claimants.
The importance of sufficient protection for buyers of new homes is also reflected in legislative changes under section 144 of the Building Safety Act. These provisions impose legal requirements on developers to provide new build warranties with a term of at least 15 years (increased from the usual 10 years period applicable previously), in line with the new prospective limitation period for claims under the Defective Premises Act 1972. Regulations are anticipated in 2023 imposing additional requirements on the kinds of defects covered, minimum policy limits, period during which the developer remains responsible, and financial penalties for non-compliance, following further industry consultation. Mandatory parameters of coverage should increase transparency for all concerned, helping to minimise the prospect of disputes.
Amy Lacey is a Partner at Fenchurch Law
Fenchurch Law bolsters insurance disputes team in London with three new hires
Fenchurch Law, the UK’s leading firm working exclusively for policyholders and brokers on complex insurance disputes, has announced the expansion of its team in London with three new appointments to its coverage disputes team; Michael Robin, Dru Corfield and Grace Williams.
Michael Robin joins as Partner, bringing with him over 45 years' experience in handling complex claims across the international insurance market. Michael joins Fenchurch Law from global legal services firm DWF, where he was Partner in the Professional Liability and Commercial Insurance Disputes team, and is well known in the insurance market as a founding partner of Robin Simon.
Dru Corfield joins as an Associate Solicitor from Elborne Mitchell LLP, where he was a Trainee Solicitor. Dru graduated from McGill University, Montreal, Canada with a degree in History and Political Science, before achieving a distinction in his LPC at BPP, Holborn.
Grace Williams also joins as an Associate Solicitor, from New Zealand law firm Robertsons, where she specialised in insurance litigation. Prior to this, Grace began her career at law firm Russel McVeagh as an Associate, after achieving a Bachelor of Laws with Honours First Class/Bachelor of Science (Genetics) from Otago University, New Zealand.
The new appointments will bolster the firm’s insurance disputes team, which was set up to help level the playing field between policyholders and their insurers, when coverage disputes arise
David Pryce, commented: “The demand for policyholder-focused insurance disputes specialists is growing all the time. We intend to continue investing in our team in order to continue to help policyholders challenge their insurers on a level playing field, when they feel their insurance claims have been incorrectly turned down, and Michael, Grace, and Dru are exciting additions to our market leading team”.
Michael Robin added: “I’m delighted to be joining such an exciting, growing team of insurance dispute experts at Fenchurch Law. I look forward to applying my in-depth knowledge of the global insurance market to helping support policyholders across the UK and internationally.”
Dru Corfield added: “I was attracted to Fenchurch Law because of the size, purpose and direction of the business. Despite being a fairly young firm, it has quickly established a very strong reputation within the insurance market for first-rate protection of policyholders’ interests. Fenchurch Law’s core values were also an important draw for me, its entrepreneurial culture is one in which colleagues are empowered to think outside the box to get the best possible results for their clients.”
Grace Williams added: “I wanted to work at a firm which focused solely on insurance law. I am excited to work alongside solicitors that are experts in their field and to assist policyholders with coverage disputes.”
The Financial Ombudsman Service: 10 Things That Every Policyholder Needs to Know
Do you have a policy coverage dispute with your Insurer?
Are you a Consumer or Small Business?
Is your dispute worth £375,000 or less?
If the answer to these questions is Yes, the Financial Ombudsman Service might offer you a pathway to resolve. Please read on…
The Financial Ombudsman Service (FOS) is a free service that aims to settle disputes between Consumers or Small Businesses on one hand, and businesses that provide financial services (including insurance companies) on the other hand.
Here are our Top 10 Things that every Policyholder needs to know:
1. IS THERE A COST?
The FOS is a free service because it is funded by levies and case fees from businesses which are regulated by the Financial Conduct Authority (FCA). The legislation that gives the FOS its powers is The Financial Services and Markets Act 2000 (FSMA), which determined that the FOS should be funded by the businesses it covers, and that these businesses should meet the costs of resolving disputes. The FSMA does not contain any power to charge Consumers for using the FOS.
2. IS IT A LEGAL PROCESS?
The FOS is an informal and non-legal process, as an alternative to the Courts. There are no fixed timetables; no need for detailed legal arguments or any cross-examination; and no need for witness statements or expert evidence. The FOS aim to decide cases on a fair and reasonable, not necessarily a legal basis. Whilst they will be guided by the Law, they are not bound to follow it. Unlike a Court process, there is no risk of adverse cost if you lose.
3. CAN THE FOS HELP ME?
The FOS can assist with complaints from Consumers and Small Business Policyholders.
A Consumer is an individual who enters into a consumer, or personal, insurance contract.
A Small Business is:
- a ‘micro-enterprise’ with an annual turnover or balance sheet that does not exceed €2 million and fewer than ten employees
- a small or medium-sized enterprise (SME) with an annual turnover of no more than £6.5 million and fewer than 50 employees
- a charity with an annual income of less than £6.5 million
- a trust that has a net asset value of less than £5 million
4. WHEN CAN I COMPLAIN?
The FOS can only review a complaint once the Policyholder has exhausted their Insurer’s complaints procedure, and the Insurer has provided a “final response letter” in accordance with the FCA Handbook, rule DISP 1.6.2, which requires that the final response:
- rejects the complaint and gives reasons for doing so;
- encloses a copy of the Financial Ombudsman Service's standard explanatory leaflet;
- provides the website address of the Financial Ombudsman Service;
- informs the complainant that if s/he remains dissatisfied with the respondent's response, s/he may now refer their complaint to the Financial Ombudsman Service
5. IS THERE A FINANCIAL LIMIT?
The FOS has an award limit, which is the maximum amount the FOS can require an Insurer to pay when they uphold complaints. This limit is adjusted each year in line with inflation, as measured by the Consumer Prices Index (CPI).
From 1 April 2022, the award limits were updated and are currently:
- £375,000 for complaints referred to the FOS on or after 1 April 2022 about acts or omissions by firms on or after 1 April 2019
- £170,000 for complaints referred to the FOS on or after 1 April 2022 about acts or omissions by firms before 1 April 2019
The FOS aim to put Policyholders back in the position they would have been had the Insurer not made a mistake.
If the FOS upholds a complaint, it can ask an Insurer to pay compensation, ie a monetary award against the Insurer, and will often require the Insurer to pay interest on the award. The FOS also has the power to award costs against the Insurer, but this is rare and usually you cannot recover your own costs.
There may be cases where the FOS consider that compensation should be higher than their award limit. In those situations, the FOS can recommend that the Insurer pays more, but the FOS cannot force them to pay anything over the limit, and the Insurer can decide whether they pay any extra or not (although in practice we would expect them to do so, especially if it is a relatively notional amount).
6. THE PROCESS: STAGE ONE - INVESTIGATOR
The FOS is a two-stage process: (1) Investigator; and (2) Ombudsman.
At the first stage, an Investigator will review the complaint submission by the Policyholder, and the Insurer’s file. The Investigator will then share their initial assessment of the complaint with both sides and recommend how it could be resolved.
The Investigator’s assessment is not binding on either party.
If both sides agree with the Investigator’s assessment, the complaint is settled accordingly.
Either side can however reject the Investigator’s assessment, and request that the complaint is referred to an Ombudsman.
7. THE PROCESS: STAGE TWO – OMBUDSMAN
At the second stage, an Ombudsman will then look at all details of the complaint afresh, and make a final decision.
As part of this process the Ombudsman may decide to issue a provisional decision which will set out the decision s/he is minded to make on the complaint’s case. The Ombudsman will then give both parties a reasonable time in which to make any final representations. After this time the Ombudsman will consider any further submissions s/he receives before issuing a final decision on the case.
If the Policyholder accepts the Ombudsman’s final decision, it is binding on the Insurer, who has to accept the decision and follow the Ombudsman’s ruling. The Insurer does not have the same power and cannot compel the Policyholder to accept.
If the Policyholder does not wish to accept the Ombudsman’s final decision, they do not have to, but it does mean that the FOS involvement is concluded.
8. IS THERE A RIGHT OF APPEAL?
There is no right of appeal to another Ombudsman.
The FOS a public body and can be judicially reviewed. A judicial review usually focuses on the process an Ombudsman has used to make their decision, not on the facts and evidence of the dispute itself.
9. HOW LONG DOES IT TAKE?
The FOS aims to give answers to complaints within 90 days of receiving the complete complaint file, in line with the EU directive on Alternative Dispute Resolution (ADR).
The FOS currently has a large volume of cases and so it is taking them longer than usual at the moment. For any new complaints they are typically advising that it will be 4 months before they can allocate a Case Handler. As a broad guideline, first stage assessments are probably in the region of 6 months after submission of the complaint, and second stage decisions are probably an additional 3 months; but each case is very much dependent on its own facts, and we are aware of cases which are well over 12 months old and still ongoing.
10. CAN I FIND OTHER DECISIONS?
The FOS publishes Case Studies and Ombudsman’s decisions on their website. These are not precedents, nor a definitive statement of the law, the FOS approach, or their procedure. The FOS may refer to previous cases or decisions, although each case is still decided on its own particular facts and merits.
FENCHURCH ADVOCACY SERVICES
Fenchurch Advocacy Services offers Policyholders a cost-effective solution to refer complaints to the FOS on their behalf. This is a non-legal service, undertaken by an ACII qualified Chartered Insurance Practitioner, under the supervision of experienced solicitors from Fenchurch Law’s market leading insurance disputes team, and includes:
- Undertaking a review of the Policyholder’s case;
- Advising on prospects of success;
- Challenging the Insurer’s position (if there are good prospects of success) and obtaining a “final response letter”;
- Referring the case to the FOS, as appropriate.
FENCHURCH ADVOCACY SERVICES
Fenchurch Advocacy Services offers Policyholders a cost-effective solution to refer complaints to the FOS on their behalf. This is a non-legal service, undertaken by an ACII qualified Chartered Insurance Practitioner, under the supervision of experienced solicitors from Fenchurch Law’s market leading insurance disputes team, and includes:
- Undertaking a review of the Policyholder’s case;
- Advising on prospects of success;
- Challenging the Insurer’s position (if there are good prospects of success) and obtaining a “final response letter”;
- Referring the case to the FOS, as appropriate.
If you would like more information, please contact our Insurance Consultant Phil Taylor at phil.taylor@fenchurchlaw.co.uk
Court hands down judgment in much anticipated Covid-19 BI cases: the takeaways for policyholders
Fenchurch Law represents Stonegate Pub Company Limited in its claim for Covid-19 business interruption losses against its three insurers: Ms Amlin; Liberty Mutual; and Zurich.
760 of Stonegate’s premises were insured under a Marsh Resilience wording, which was a wording considered by the Divisional Court and Supreme Court as part of the FCA Test Case. The Test Case confirmed that the policy responded to business interruption losses. However, a number of secondary issues remained in dispute despite the Courts having confirmed coverage.
The key issues for consideration were as follows:
- Trigger;
- Aggregation;
- Causation;
- Additional Increased Costs of Working (“AICW”); and
- Government Support.
In its judgment, notably, the Court rejected the Insurers’ primary argument that all cases aggregate to the emergence of the virus or pandemic, and agreed with Stonegate’s position that losses are recoverable after the end of the policy period. The Court found in favour of Insurers on other issues, and in particular with regard to furlough.
Below we consider the Court’s judgment in relation to each of the issues, as well as the related judgments in the cases of Greggs v Zurich [2022] EWHC 2545 (Comm) and Various Eateries v Allianz [2022] EWHC 2549 (Comm), and what they mean for policyholders.
Trigger
The Court was asked to consider the trigger (a colloquial shorthand for the matter or matters which gave rise to a right to claim under a policy) under the Disease, Enforced Closure and Prevention of Access perils present in the Marsh Resilience wording. The Court made the following findings:
- The Disease peril is triggered whenever there were cases of Covid-19 which were either discovered at an insured location, or within the relevant vicinity, and each example is separate Covered Event;
- The Enforced Closure peril triggered whenever all or part of an insured location was closed under a relevant compulsion or instruction. The policy is “triggered” in respect of each such closure, and the number of locations closed is the number of triggers. A location opening and then closing again at a different time would be considered a separate trigger;
- The review, reiteration, continuation or renewal of regulations which were materially of the same effect does not constitute a separate closure or separate ‘trigger’;
- The Prevention of Access peril trigger was the number of such actions or advices which prevented or hindered the use of or access to the insured location;
- Steps or advice which merely repeated or renewed an existing prevention or hindrance of access forms part of one set of ‘actions or advice’, and therefore is only one ‘trigger’ or Covered Event;
Policyholders with different aggregation wording, or with no aggregation wording, could find the Court’s analysis on trigger particularly useful.
Aggregation
With regard to aggregation, ever the tricky area for policyholders and insurers alike, the Court considered the extent to which Stonegate’s claimed losses arose from, were attributable to, or were in connection with one more single occurrence for the purposes of aggregation as one or more Single Business Interruption Loss.
In determining the number and nature of occurrences, the Court had regard to ‘the degree of unity in relation to cause, locality, time, and, if initiated by human action, the circumstances and purposes of the persons responsible’. The Court also considered the concept of remoteness between the aggregating event and the loss, which acts as a counterbalance to the more aggressive aggregation clauses and issues that arise from causation.
Insurers maintained a number of alternative cases in relation to aggregation in an attempt to limit Stonegate’s losses to a single sub limit of liability to which all losses could be aggregated.
The Judge disagreed with a number of the Insurers’ proposed occurrences for the purposes of the aggregating wording, including tracing Covid-19 back to its evolutionary roots, the original zoonotic transmission of Covid-19 in Wuhan, and the virus’ entry into the UK. The Court rejected these arguments on the basis that these proposals were either geographically, temporally or causally too remote (or a combination of).
Instead, the Court held that there had been at least two occurrences that satisfied the relevant aggregating test and fell within Stonegate’s policy period (which ended on 30 April 2020), and acknowledged a possible third occurrence, being:
i) The decision taken at the COBR 16 March meeting to advise people to stop non-essential contact with other and to not visit crowed areas such as pubs, restaurant and clubs (a finding that went against the previously established precedent that a decision did not constitute an occurrence);
ii) The instruction given on 20 March that all pubs, bars and restaurants were to close; and
iii) The announcement of the national lockdown on 23 March 2020.
The Court considered that at this point in time the decisions taken by the devolved administrations were taken jointly, and therefore there was only one occurrence across the UK. However, the Court accepted that if it was wrong on this point, there would be an occurrence in the form of the decisions of each home nation.
It is notable, however, that there was no finding in relation to losses in the pre-aggregated period (16 March 2020), therefore, the occurrences thereafter did not aggregate any of the losses incurred before the COBR meeting on 16 March 2020.
The judgment does not consider other occurrences from 30 April 2020, as this is the date on which Stonegate’s policy expired. However, in Greggs v Zurich, the Court provided some further clarity for policyholders, and held that there was a separate occurrence for each announcement or measure relevant to Greggs’ business, with the exception of those that simply continued, made trivial changes to, or reduced existing restrictions.
In Greggs, the Court considered decisions taken from May 2020 by the home nations as being separate and therefore not single occurrences in the meaning the policy wording. The result is that business with locations in each administration will benefit from cover for a separate occurrence (and therefore a separate sub limit if applicable).
Policyholders with longer policy periods should be aware of other examples of an “occurrence” within the meaning of the Marsh Resilience aggregating wording, which may include:
i) In England, the bringing into force of the three-tiered system on 14 October 2020;
ii) The announcement and implementation of the second national lockdown,
iii) The announcement and implementation from 20 December 2020 of the Tier regulations;
iv) Restrictions imposed on limited areas of the country, for example, the local lockdown in Leicester on 04 July 2020.
Causation
Stonegate, as with most hospitality and leisure businesses, continued to feel the effects of Covid-19 long after the expiration of its policy period. The Court found that losses suffered after the expiry of the policy period were attributable to Covered Events, and rejected the Insurers’ argument that any losses suffered after the expiry of the policy period could not have been caused by a Covered Event.
Stonegate’s losses, from 1 May 2020 until 4 July 2020 (in England), 6 July 2020 (in Scotland) and 13 July 2020 (in Wales) were all proximately caused by Covered Events that occurred between 17 February and 30 April 2020.
Losses beyond those dates were considered to be in response to the subsequent developments of Covid-19, and predominantly caused by more recent cases.
The Court did accept that there were several individual categories of causal linkage that could continue after the dates outlined above, such as continued losses caused by deaths or long covid, and loss of momentum in relaunching premises prior to the expiry of the policy period.
Within those categories was the cancellation of events which had been organised to occur after the dates outlined above, by reason of uncertainty as to whether they would be able to go ahead. This category is undoubtably important to the hospitality industry, and the same logic may equally apply across other industries.
The Court gave further consideration to the issues of causation in Various Eateries v Allianz. The Court held that in Various Eateries’ circumstances (where this particular policy expired on 28 September 2020), cases of Covid-19 occurring in the Vicinity during the Period of Insurance were potential proximate causes of government action for a time after 28 September 2020 and in particular, that they were at least equal proximate causes of the tier system announced by the government on 14 October 2020 (but not the movement of some areas within the tier system to tier 2 on 29 October 2020).
The causation findings are very fact sensitive and will be dependent on the length of the policy, the length of the indemnity period and the significance to that policyholder’s business of the different announcements, measures and regulations.
AICW
The Court confirmed that AICW applied per Single Business Interruption Loss (i.e. per occurrence) and in addition to the notifiable disease sub-limit, but it did not apply to economic increased costs of working. The wording of the policy, correctly construed, meant that the AICW limit only applied to additional costs which were uneconomic (i.e. that which exceeds the amount of reduction in turnover avoided) but not to increased cost of working where the limit applicable to the ICW has been exhausted.
Government Support
The Court considered that payments received under the Coronavirus Job Retention Scheme (“CJRS”) should be taken into account for Insurers’ benefit when calculating sums recoverable by policyholders. The significance of this finding is subject to the wording of policy specific savings provisions. However, it is likely to be applicable to most policyholders (not just the Stonegate, Various Eateries and Greggs parties).
Payments made under the Business Rates Relied (“BRR”) would not be accounted for to insurer’s benefit if the business shows that normally business rates would have been paid out of turnover. Unlike the Court’s finding in relation to CJRS, the BRR is fact specific per policyholder.
Where next
A spokesperson for the Stonegate Group said:
“The outcome of this case is far from conclusive. We are pleased that the Judge found in our favour on a number of key issues and note that he sided with our insurers on others. In this sense, the outcome is similar to the judgment of the Divisional Court in the Test Case brought by the FCA last year.
However, we believe that the Court’s interpretation on a number of issues which are generally applicable to policyholders is out of step with the approach taken by the Supreme Court in the Test Case and with the approach of Courts in other jurisdictions (such as on furlough). We intend to appeal those elements of the decision.
Whilst our recovery from the pandemic has been strong, we cannot ignore the significant disruption caused during the last two years and, along with most businesses in the UK, we are now grappling with inflationary challenges and a cost of living crisis for the UK consumer. In the circumstances, we, and other businesses, are entitled to look to our insurers to provide the cover promised under our policy”
Copies of the judgments can be accessed here:
Stonegate - https://www.bailii.org/ew/cases/EWHC/Comm/2022/2548.html
Various Eateries - https://www.bailii.org/ew/cases/EWHC/Comm/2022/2549.html
Greggs - https://www.bailii.org/ew/cases/EWHC/Comm/2022/2545.html
Authors:
Anthony McGeough is an Associate at Fenchurch Law
Joanna Grant is a Partner at Fenchurch Law