A date has been set for a Supreme Court case involving the Financial Conduct Authority and a host of insurance companies, to determine whether businesses hit by the pandemic are covered by business interruption insurance (BII).
The ‘leapfrog’ appeal will be heard on Monday 16 November and is estimated to last for four days. The FCA said the appeal is the fastest way to get legal clarity in the event that it is not possible to reach an agreement with insurers before the court date.
The FCA brought an urgent test case to the High Court earlier this year to establish whether policyholders hit by coronavirus – many of which are small to medium sized enterprises, including law firms – should receive payouts under BII.
The case was heard in July by the divisional court under the financial markets test case scheme and judgment was given in September. The judgment was a ‘significant victory’ for the FCA, according to the regulator's solicitors Herbert Smith Freehills.
However, both the FCA and the insurers are appealing, disputing the construction of certain provisions in the relevant insurance policies. Five Supreme Court justices will determine certain matters of construction relating to disease clauses, prevention of access clauses and hybrid clauses.
The hearing will take place via video link.