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Law360, London (February 8, 2021, 12:43 PM GMT) -- A senior Irish government minister has said there could be a role for the country's financial regulator to step in to help small businesses get claims paid by insurers, after a court ruled in favor of policyholders last week.
Deputy Prime Minister Leo Varadkar said Friday that thousands of small to midsized businesses could be in line for a "substantial financial payment," after the High Court of Ireland sided with policyholders in a test case over lockdown closures due to COVID-19.
After losing the court battle on Friday, insurer FBD Group PLC is now on the hook for business interruption payouts to nearly 1,000 pubs that were forced to close during the country's three national lockdowns. The company has set aside €30 million ($36 million) to pay claims, adding on Friday that it has no plans to appeal.
"This could have significant implications for thousands of businesses that have similar policies with this company and others, who may now be in line for a substantial financial payment," Varadkar said in a video posted to Twitter.
Varadkar did note, however, that the "devil is in the detail" in the judgment and said that a lot depended on a further court hearing on damages.
The action was brought by three Dublin pubs — Sinnotts, The Leopardstown Inn, and Lemon and Duke — as well as Sean's Bar in Athlone, in central Ireland. All had business interruption policies with FBD, which offered coverage if the pubs were forced to close as a result of an infectious disease outbreak at the premises or within 25 miles.
The four pubs and FBD are due back in court on Feb. 17, when a further hearing on damages will likely be scheduled.
Varadkar said the government would "keep a close eye" on the situation.
"There may now be a role for the Central Bank, the financial regulator in this instance…having a role and making sure that people get the payouts they're entitled to," he added.
The Central Bank of Ireland said Friday it welcomed the court ruling.
"We will be closely examining the potential impact of this judgment for customers in the context of our sustained and ongoing engagement with relevant firms," it said in a statement.
--Editing by Joe Millis.
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