THE BUSINESS INTERRUPTION TEST CASE – THE SUPREME COURT’S DECISION
The Supreme Court’s Judgment of 15th January 2021 potentially opens the door for the many businesses that have an appropriate policy of insurance in place to meet their claims for Covid-19 related business interruption losses. The Supreme Court has substantially allowed the FCA’s Appeal on behalf of the policyholders which is set out in further detail below.
In September 2020, a landmark High Court ruling for business interruption policyholders who have been forced to close as a result of the current global pandemic was handed down. The test case was brought on behalf of the policyholders by the insurance regulator, the Financial Conduct Authority (“FCA”). The case was dealt with by the Supreme Court under an expedited leapfrog process due to the urgency and importance of these issues which continues to impact upon thousands of businesses in the UK.
Sheldon Mills, Executive Director, Consumers and Competition at the FCA, commented:
‘Coronavirus is causing substantial loss and distress to businesses and many are under immense financial strain to stay afloat. This test case involved complex legal issues. Our aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible, and today’s judgment decisively removes many of the roadblocks to claims by policyholders.
In a press release, which provides further detail on the recent judgment, the FCA now intends on working with insurers to ensure that they now process claims quickly in respect of those claims that the Judgment says should be paid, and in making interim or on-account payments wherever possible.
A link to the full Judgment can be found here: https://www.supremecourt.uk/cases/docs/uksc-2020-0177-judgment.pdf
A link to the Executive Summary can be found here: https://www.supremecourt.uk/cases/docs/uksc-2020-0177-press-summary.pdf
The FCA has a specific web-page for policyholders which can be located here: https://www.fca.org.uk/firms/business-interruption-insurance
The FCA press release in respect of the claims can be found here: https://www.fca.org.uk/news/pressreleases/
BTMK’s specialist Litigation & Dispute Resolution Team will work through your specific case, your
policy of insurance and the Supreme Court Judgment in order to advise you whether any previously
rejected claim can be challenged or if a claim can be made where one has not previously been