The Hiscox Action Group and the FCA have today secured a historic victory at the Supreme Court in the Business Interruption insurance text case.
In a unanimous decision by all five Law Lords, the Court rejected every one of the insurers appeals whilst partially or totalling upholding all the Hiscox Action Group arguments including those shared with the FCA.
This ruling is massive boost to the 30,000 Hiscox insureds who have been wrongly denied cover and the wider 370,000 SME’s who the FCA said were impacted by the insurance industry’s refusal to pay out on Covid cover.
Richard Leedham, the Mishcon de Reya partner representing the Hiscox Action Group, says, “This is a landmark victory for a small group of businesses who took on a huge insurance player and have been fully vindicated. What is important now is that Hiscox accepts the Supreme Court’s verdict and starts paying out to its policy holders, many of whom are in danger of going under”.
The FCA Supreme Court has ruled in favour of the Hiscox Action Group following a series of appeals in the FCA’s Business Interruption Test Case.
The victory represents the final step in holding some the UK’s biggest insurance companies accountable to their policy holders, against the backdrop of the ongoing pandemic, new lockdowns, and a remote court process.
The decision by the country’s highest court means that Hiscox should now start paying its 30,000 policyholders the insurance they are entitled to plus costs and any special damages due under the Enterprise Act.
Welcoming this historic ruling, Richard Leedham, the Mishcon De Reya partner leading the action, said: “Today’s outcome is one of the most significant for business in modern times. The result should leave Hiscox and the rest of the insurance industry in no doubt that they should immediately start doing the right thing and settle these claims.”
In April, Hiscox said in a statement to the market that “Hiscox core policy wordings do not provide cover for business interruption”. This statement encouraged much of the insurance industry to deny cover to up to 370,000 SME’s and caused huge suffering to businesses across the UK.
In today’s judgment, Lord Briggs delivers a damning indictment on the insurers’ words saying they were effectively claiming the insurance they sold was “illusory”. This position, he says, was “clearly contrary to the spirit and the intent of the relevant provisions”.
Richard Leedham adds, “This is a landmark judgment for both the Hiscox Action Group and the FCA that led the case. It was of such importance that the whole case was fast tracked through the courts in just nine months. The question now is has the insurance industry finally got the message?”.
The Hiscox Action Group is made up of over 400 members with a claim of just under £50 million. It will continue its arbitration action if Hiscox refuses to pay out. The HAG has been advised throughout by top city law firm, Mishcon de Reya, and supported by Harbour, one of the world’s leading litigation funders.
Mark Killick, a HAG Steering Committee member, says “The Hiscox Action Group led this campaign from the start and this judgment should finally mean that our members as well as businesses across the country will get the insurance they paid for. Quite what possessed an industry that claimed ‘my word is my bond’ to destroy its own reputation is beyond me.”
Supreme Court rules in favour of hospitality Covid business interruption losses
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Hospitality & Catering News: Hiscox refusal to pay out on Covid insurance cover overruled in landmark court case for hospitality – 15 January 2021 – Hiscox refusal to pay out on Covid insurance cover overruled in landmark court case for hospitality
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