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Law360, London (June 5, 2020, 5:14 PM BST) -- Mishcon de Reya LLP said Friday it has secured litigation funding for a group action against insurer QBE after it rejected claims for business interruption made by dental practices forced to close because of the government-ordered COVID-19 lockdown.
The City law firm said the insurer's dental practice policies were "ripe for challenge," adding that it has appointed Jeffrey Gruder QC of Essex Court Chambers as counsel.
Mishcon declined to say how many businesses are represented in the action, which is the third such group it has established to challenge insurers over their unwillingness to pay out on claims for interrupted business.
Mishcon is also acting on behalf of the Hiscox Action Group and the Hospitality Insurance Group Action. The hospitality group is challenging Aviva as well as QBE.
"The issue for dentists is similar in many ways to that experienced by the other businesses whom we also advise," Sonia Campbell, partner and head of the insurance disputes practice at Mishcon, said. "Dental practice owners responsibly insured themselves against the risk of financial losses, including from notifiable diseases, and yet, just like those in other trades, soon learned that their claims have been rejected."
The challenge will focus on wording set out in QBE's "office insurance" policy on business interruption.
It is one of 17 sample policy wordings that will be included in a High Court test case to be brought by the Financial Conduct Authority in July on behalf of business policyholders.
A spokeswoman for QBE said the company did not comment on litigation-related matters.
The U.K.-wide lockdown has hit dentists, who have been ordered to halt all nonemergency treatment.
The government has said that companies in the retail, hospitality and leisure sectors do not need to pay business rates — a form of property tax — for the rest of the year. But that has not been extended to the private dentistry sector.
The British Dental Association found in a survey of its 22,000 members that only 70% believe they can remain financially viable for the next three months.
The association announced last month that it has appointed law firm Brown Rudnick LLP to examine the policies of its members who have had business interruption claims rejected. A spokesperson for the association did not respond to a request for comment on whether it is considering litigation as a result.
A spokeswoman for Mishcon confirmed its group action is separate from any being considered by the British Dental Association.
--Editing by Alyssa Miller.
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