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1/n The FCA test case litigation on business interruption insurance for COVID-19 losses has started. https://www.supremecourt.uk/live/court-01.html
Some of the key issues are:
1. How to interpret cover as described in the contract, as some policies have apparently conflicting clauses...
Some of the key issues are:
1. How to interpret cover as described in the contract, as some policies have apparently conflicting clauses...
2/n
2. The litigation is generally concerned with three types of clauses:
a. Business interruption following a notifiable disease within a defined area (eg 25 miles);
b. Business interruption following public authority restrictions on access to premises
c. Hybrid clauses
2. The litigation is generally concerned with three types of clauses:
a. Business interruption following a notifiable disease within a defined area (eg 25 miles);
b. Business interruption following public authority restrictions on access to premises
c. Hybrid clauses
2...
These clauses (as a mixed matter of construction) require the court to determine the limits of the peril insured against;
These clauses (as a mixed matter of construction) require the court to determine the limits of the peril insured against;
3/n
3. Assuming that an insured peril has occurred, the court needs to determine how to measure the indemnity.
4. This raises issues as to the nature of the insurer’s duty to indemnify (on which English law & other commonwealth jurisdns have something of a troubled past).
3. Assuming that an insured peril has occurred, the court needs to determine how to measure the indemnity.
4. This raises issues as to the nature of the insurer’s duty to indemnify (on which English law & other commonwealth jurisdns have something of a troubled past).
4/n
5. The ‘hold hamless’ nature of insurance law has caused issues elsewhere, but asserts that the insurer is immediately liable for breach of contract on occurrence of the loss. If correct, this may influence the applicable rules on causation, remoteness, mitigation etc
5. The ‘hold hamless’ nature of insurance law has caused issues elsewhere, but asserts that the insurer is immediately liable for breach of contract on occurrence of the loss. If correct, this may influence the applicable rules on causation, remoteness, mitigation etc
5/n
6. The nature of the duty to indemnify may be relevant, for example, to the application (or not) of the BUT FOR test.
6. The nature of the duty to indemnify may be relevant, for example, to the application (or not) of the BUT FOR test.
6/n
As a simple example: assume cover for a loss for business interruption for disease within 25 miles. Is the loss that which flows ONLY from the disease occurring within 25 miles (ignore wider pandemic) or all losses for a disease providing it comes within 25 miles?
As a simple example: assume cover for a loss for business interruption for disease within 25 miles. Is the loss that which flows ONLY from the disease occurring within 25 miles (ignore wider pandemic) or all losses for a disease providing it comes within 25 miles?
Nice line by Gavin Kealey: ‘conflating causative but not covered with covered but not causative’
... of @7KingsBenchWalk
We are live at the start of Day 2 with @GreatStrides65 of @4NewSquare.
And now, Jonathan Gaisman, of @7KingsBenchWalk. Dealing with public authority losses and nature of peril and indemnity.
The ‘Morning session’ from the hearing yesterday is now available as ‘stream on demand’ https://www.supremecourt.uk/cases/uksc-2020-0184.html
Reference to one of my regular haunts: Lord Hoffman on ‘common sense’ as an appeal made to disguise the lack of reasoning.
Gaisman: ONLY where (in a multi-element composite peril) A causes B causes C causes D is the insurer in breach of contract and liable to indemnify. Not all elements nec of same weight. ‘What is essence of clause?’
Gaisman: Where eg rats->local authority action -> closure-> business interruption, suggestion is essence ≠ rats, for purposes of identifying counterfactual. Focus must be on LA action.
