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Supreme Court Judgment: Success for HIGA policyholders

Posted on 15 January 2021

Today the Supreme Court has handed down its judgment in the FCA test case. Mishcon de Reya represented two action groups, the Hiscox Action Group (Richard Leedham/Ralph Fearnhead) at all stages of the test case, and HIGA (Sonia Campbell). Both groups have been funded by leading litigation funder, Harbour. Access the Court's press summary here and judgment here.

Sonia Campbell, Partner at Mishcon de Reya who represents the Hospitality Insurance Group Action (HIGA) said:

"We are absolutely delighted that the Supreme Court's decision means that there is cover under the QBE1, QBE2 and QBE3 policies for all of our HIGA clients, as well as for the vast majority of policyholders with non-property damage Business Interruption (BI) cover – those businesses now have cover confirmed in principle for their business interruption losses caused by the national response of the Government to COVID-19. QBE should now pay all of the QBE policyholders that we represented at first instance without further delay.

The Supreme Court has recognised that, just at the critical time when this cover was most needed most by thousands of struggling UK businesses, insurers were wrong to adopt the position that coverage was applicable only if there were narrow local restrictions, and that they could deny claims because the cover had not been intended to be provided and/or because the interruption and therefore losses would have happened in any event. These arguments have been comprehensively dismissed by the Supreme Court.

We hope that this judgment will come as a massive boost to all those businesses still reeling from the third lockdown. Covered businesses can now demand that their claims are paid.

In a detailed analysis of insurance law on proximate cause and causation, the Supreme Court has clearly and efficiently torpedoed the academic and convoluted arguments of insurers and laid down clear guidance as to how these claims should be paid. In commenting that it is no surprise that the Court has come to this view, in an even more comprehensive way than the Commercial Court did, the Supreme Court has also paved the way for policyholders to make additional claims for delayed payment of claims.

It is a resounding but long overdue success for businesses, but we recognise that it may still be too late for many.  The claim adjustment process that must now happen should happen immediately, and insurers must not be allowed to drag their heels and cause further distress." 

Read our detailed legal commentary on the judgment here.

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