Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Commercial Litigation UK newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360, London (November 2, 2020, 5:46 PM GMT) -- The U.K.'s highest court granted permission on Monday for a "leapfrog" appeal in an insurance case that could determine the financial future of an estimated 370,000 businesses, with the hearing to start in two weeks.
The Supreme Court in London said it has approved an application to appeal a High Court judgment in the test case over business interruption insurance, bypassing the Court of Appeal in an unusual move. The case will be heard via video link starting Nov. 16 and will last for four days.
The test case was brought by the Financial Conduct Authority to determine whether a representative sample of eight insurers with 21 policy wordings would have to pay out on claims to thousands of businesses forced to close during the country's first COVID-19 lockdown in March.
Judges ruled mostly in favor of policyholders at the High Court on Sept. 15.
The FCA, six insurers and a policyholder action group were granted permission by the High Court on Oct. 2. to appeal the judgment.
Five justices will hear the case in the Supreme Court: Robert Reed, Patrick Hodge, David Kitchin, Nicholas Hamblen and George Leggatt.
The legal challenge will center on so-called disease clauses and prevention of access clauses in the wording of business interruption policies that are being considered in the case. Justices will also look at "hybrid" wording that includes elements of both clauses.
The court will also examine whether the High Court was right in its analysis of the precedent set down in the controversial case of Orient-Express Hotels Ltd. v. Assicurazioni Generali SpA
. That case has had huge ramifications for causation arguments in insurance litigation in recent years.In that case, New Orleans-based Orient Express was seeking to claim against its business interruption policy after storm damage arising from Hurricane Katrina meant its hotel was closed for two months in 2005.
Both the High Court and the Court of Appeal found that the hotel would have suffered business losses even if it had not been damaged, because New Orleans was effectively forced to shut down after the hurricane.
Instead of the $2.15 million it was seeking from insurers, the hotel was therefore allowed to claim only a limited amount on its policy — as if it had been an undamaged hotel in a damaged city.
Judges Christopher Butcher and Julian Flaux said in September's ruling that Orient Express had no relevance to the test case. But they would have ruled that it was "wrongly decided" even if they had been forced to consider it, the judgment said.
The FCA was represented at the High Court 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.
Hiscox policyholders were represented by Ben Lynch QC of Fountain Court Chambers, instructed by Mishcon de Reya LLP.
Arch Insurance UK was represented by John Lockey QC and Jeremy Brier of Essex Court Chambers, instructed by Clyde and Co LLP.
Zurich Insurance PLC was 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 and Co LLP.
QBE UK Ltd. was represented by Mark Howard QC of Brick Court Chambers and Rachel Ansell QC of 4 Pump Court, instructed by Clyde and Co LLP.
Argenta Syndicate Management Ltd. was 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. were represented by Gavin Kealey QC and Andrew Wales QC of 7 King's Bench Walk, instructed by DAC Beachcroft LLP.
Hiscox was represented by Jonathan Gaisman QC of 7 King's Bench Walk, instructed by Allen & Overy LLP.
RSA was 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.
For a reprint of this article, please contact reprints@law360.com.
