Insurers Can Take COVID-19 Case Straight To Supreme Court

By Martin Croucher
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Law360, London (October 5, 2020, 9:32 AM BST) -- A London court has allowed insurers to "leapfrog" directly to the U.K. Supreme Court to challenge a ruling requiring them to to pay out to businesses forced to close during the nationwide COVID-19 lockdown in a high-profile test case.

The so-called leapfrog order was granted to six of the eight insurers acting as defendants in the case at an all-day High Court hearing. (AP Photo/Eric Gay)

A pair of judges hearing the case for the High Court granted the order Friday in the Financial Conduct Authority's test case on business interruption insurance seeking a ruling on whether an estimated 370,000 companies should be able to claim on their policies for the period of the lockdown. A judgment on Sept. 15 went largely in favor of policyholders.

The so-called leapfrog order was granted to six of the eight insurers acting as defendants in the case at an all-day High Court hearing. The certificates mean that insurers and the FCA can bypass the normal appeals process and apply for a hearing before the highest court in the land.

It is not clear whether insurers have yet applied to the Supreme Court, nor whether the country's top court will grant permission. The Financial Conduct Authority said it was still hoping that out-of-court talks will help it reach a settlement on claims compensation with insurers.

"In light of the hearing, the FCA will review the final declarations and decide on its next steps," the City regulator said on Friday. "These will include pressing on with the application to appeal to the Supreme Court while continuing discussions with insurers and action groups to find a solution that avoids the need for appeal and enables pay-outs on eligible claims as quickly as possible."

The Hospitality Insurance Group Action, which plans to intervene in the Supreme Court appeal, said the insurers were seeking "to to delay and defer decisions on paying out claims."

"Rather than agreeing to abide by the court's judgment and now pay claims, it is disgraceful that insurers continue to drag their feet and watch more and more of their own policyholders go to the wall," Sonia Campbell, the Mishcon de Reya LLP partner representing HIGA, said. "The fact they have decided to seek permission to appeal shows they are determined to drag this out to the bitter end."

The FCA is represented by Colin Edelman QC of Devereux Chambers and Leigh-Ann Mulcahy QC and Richard Coleman QC of Fountain Court Chambers, instructed by Herbert Smith Freehills LLP.

The hospitality group policyholders are represented by Philip Edey QC of Twenty Essex Chambers.

Hiscox policyholders are represented by Ben Lynch QC of Fountain Court Chambers, instructed by Mishcon de Reya LLP.

Arch Insurance UK is represented by John Lockey QC and Jeremy Brier of Essex Court Chambers, instructed by Clyde & Co LLP.

Zurich Insurance PLC is represented by Andrew Rigney QC and Caroline McColgan of Crown Office Chambers and Craig Orr QC and Michelle Menashy of One Essex Court, instructed by Clyde & Co LLP.

QBE UK Ltd. is represented by Mark Howard QC of Brick Court Chambers and Rachel Ansell QC of 4 Pump Court, instructed by Clyde & Co LLP.

Argenta Syndicate Management Ltd. is represented by Simon Salzedo QC and Michael Bolding of Brick Court Chambers, instructed by Simmons & Simmons LLP.

Ecclesiastical Insurance Office PLC and MS Amlin Underwriting Ltd. are represented by Gavin Kealey QC and Andrew Wales QC of 7 King's Bench Walk, instructed by DAC Beachcroft LLP.

Hiscox is represented by Jonathan Gaisman QC of 7 King's Bench Walk, instructed by Allen & Overy LLP.

RSA is represented by David Turner of 4 New Square, instructed by DWF Law LLP.

The case is The Financial Conduct Authority v. Arch Insurance and others, case number FL-2020-000018, in the High Court of Justice of England and Wales.

--Editing by Ed Harris.

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