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Law360, London (June 15, 2020, 5:22 PM BST) -- Mishcon de Reya LLP said Monday it has formally launched a £40 million ($49.5 million) arbitration claim against insurer Hiscox on behalf of business interruption policyholders denied cover after the government ordered a nationwide shutdown in response to the pandemic.
The City law firm said it has written to Hiscox to propose an "ambitious timetable" for the resolution of the dispute.
The legal claim will involve nearly 350 policies that contain an arbitration clause. Mishcon said it hopes more policyholders from the 600-member Hiscox Action Group will join the claim. The group has potential claims totaling £52 million.
"We have today served notice on Hiscox Insurance triggering the arbitration clause in all our policyholders contracts and setting out a clear process for this matter to be dealt with quickly and easily," Mishcon partner Richard Leedham said.
Hiscox confirmed it had received the letter.
"We can confirm that we have received a letter on behalf of a group of policyholders with UK property insurance policies," a spokeswoman said. "We shall carefully consider it and respond accordingly."
Mishcon has proposed a former Court of Appeal judge to oversee the arbitration hearing. A spokesperson for the law firm did not respond to a request for comment on the identity of the judge.
A number of business policies contain arbitration clauses, which enable policyholders involved in claims disputes to take their case to closed-door hearings where a settlement is more likely.
In cases where insurers dispute the findings of an arbitration hearing, the claims then move to the High Court.
Lawyers are concerned that if the case moves to the High Court it could overlap with a test case being prepared at present by the Financial Conduct Authority.
The FCA is taking 17 policy wordings to court for a determination of liability. Several of those policies are from Hiscox, which is one of eight defendants in the case.
Mishcon is also coordinating action for two other groups, the Hospitality Insurance Group Action, on behalf of companies like bars, restaurants and hotels, and an as-yet-unnamed group action on behalf of dentists.
--Editing by Marygrace Murphy.
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