A test case to establish whether companies impacted by coronavirus are covered by business interruption insurance could be leapfrogged to the Supreme Court after the Financial Conduct Authority and insurers failed to reach an agreement.

The FCA had hoped to reach an agreement with the insurers by close of business yesterday on the interpretation of a High Court judgment affecting which businesses get paid and how much. 

However, the regulator has now filed a skeleton argument with the High Court. At a hearing tomorrow, it is expected to ask the court for a certificate to apply to go directly to the Supreme Court, bypassing the Court of Appeal.

The FCA said this is the fastest way to get legal clarity as quickly as possible for all parties, in the event that it is not possible to resolve the outstanding issues in the coming weeks.

‘We will continue discussions with insurers and action groups, to find a solution which resolves the outstanding issues as soon as possible to enable pay-outs on eligible claims,’ it said.

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. 

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.


*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.