06/10/2020

FCA test case appeal is on the horizon

As widely anticipated, the FCA business interruption insurance test case is likely to go all the way to appeal at the Supreme Court.

Following the consequential hearing held on Friday 2 October, the FCA, Hiscox Action Group, Arch, Argenta, MS Amlin, Hiscox, QBE and RSA are all now entitled to apply to the Supreme Court for permission to appeal. Ecclesiastical and Zurich declined to appeal, as the judgment published on 15th September concluded that losses associated with Covid-19 were not covered under their sample policy wordings considered by the Court.

The FCA has announced that it intends to continue discussions with insurers to try to reach agreement and enable pay-outs on eligible claims as soon as possible without the need for appeal. But insurers appear entrenched in their views and it seems inevitable that it will go all the way to the Supreme Court. The process has been fast-tracked and the Supreme Court is expected to consider the appeal by the end of the year.

This is obviously disappointing for many businesses during the current economic climate, who, even after the lifting of the national lockdown, are still unable to trade as before and are in desperate need of pay-outs, or at least some confirmation that they will receive a pay-out. Many businesses will face more uncertain months to come as those with affected claims will find that their insurers will reserve their position until the final determination of the test case.

All policyholders whose claims have been rejected have the option of pursuing their claims to the Financial Ombudsman Service, if eligible, or the Court. The impact the appeal may have on any particular claim will depend on the policy wording in each case.

We are assisting hundreds of businesses facing denials from insurers, by reviewing their policies for free. You can send us yours via this short form. If we think you have a claim, we’ll pursue your insurer. If you win, you pay us a pre-agreed fee. If you lose, you don’t pay anything.