The Financial Conduct Authority has filed a precautionary application to appeal to the Supreme Court, after securing a ‘significant victory’ for businesses seeking payouts from their insurers for the cost of the pandemic.
The FCA brought an urgent test case to the High Court earlier this year to establish whether policyholders hit by coronavirus – many of which were small to medium sized enterprises – were covered by business interruption insurance (BII).
The High Court’s judgment, which was handed down this month, brought ‘welcome news’ for a significant number of policyholders, according to Herbert Smith Freehills, which is representing the FCA.
While different conclusions were reached in respect of each wording, the court found in favour of the FCA on ‘the majority of the key issues’, in particular in respect of coverage triggers under most disease and ‘hybrid’ clauses, Herbert Smith Freehills said.
However, the FCA – along with seven insurer parties – has now filed 'leapfrog' applications to appeal to the Supreme Court in case an agreement is not reached by close of business tomorrow.
The regulator said it continues to ‘work closely and at speed' with the eight insurers and two intervenors that participated in the test case to reach an agreement in principle on a range of issues whereby an appeal process would not be required, and payments would be made on eligible claims as soon as possible.
'Positive discussions continue with all parties,' it said.
*The Law Society is keeping the coronavirus situation under review and monitoring the advice it receives from the Foreign & Commonwealth Office and Public Health England.