The Supreme Court judgment in the FCA Business Interruption Test Case was published today. The full judgment together with a copy of the FCA’s press release is available here.
In concert with our Network provider Marsh and specialist Law Firm Fenchurch Law, we are reviewing the content of the judgment in detail. However, the key message is that the Supreme Court substantially allowed the appeal of the FCA on behalf of policyholders and dismissed the appeal brought by insurers. Notably finding the following:
- Notifiable Disease Clauses – while the Supreme Court took a different approach to the High Court, it confirmed that all the disease clauses before the Court were triggered;
- Prevention of Access / Hybrid Clauses – cover under these clauses still faces challenges but may be triggered more readily. No requirement for a legislative step ordering closure and potential cover for loss of access to part of premises;
- Trends Clauses – the Supreme Court was clear that trends clauses can only take into account factors wholly unrelated to COVID-19 and rejected the “wide area damage” arguments of insurers;
- Orient Express – the Supreme Court determined that the Orient Express case was wrongly decided and that it should be overruled. This decision therefore has positive consequences for insureds beyond the scope of COVID-19 claims.
Next steps
We expect to be able to issue a further communication next week, to provide more detail about the key findings in the judgment and we will let you have further details when we are able. Please speak with your Account Executive if you have any questions or concerns regaring the implications following this judgement.
