The Financial Conduct Authority has issued some key court documents relating to its dispute with the insurance industry.
The FCA is asking judges for clarification and resolution on a variety of different wordings used across the industry in business interruption insurance policies.
It published a set of High Court declarations yesterday evening.
The case is time-sensitive as it involves around 370,000 policyholders who, owing to complicated wording, are unsure whether they are entitled to make a claim for business interruption as a result of Covid-19.
In a ruling in September, following an eight-day High Court trial in July, judges Lord Justice Flaux and Mr Justice Butcher gave their answer in a 162-page ruling.
The ruling does not expressly come down on one side or the other. Instead, it goes though the wordings brought up at the trial and provides specific guidance. Even so, the FCA says the judges have backed the arguments brought by lawyers representing policyholders in “the majority of key issues”.
Therefore, for clarification, following more written submissions and another hearing, the judges and lawyers have prepared a list of declarations outlining the practical results of the ruling so that insurance professionals don’t need to decipher the longer judgment.
It is those declarations that have been published.
Where are we now?
The case has been expedited, which means that the court system is trying to hear it as quickly as possible.
In a hearing earlier this month, the judges who heard the High Court case granted the main litigants so-called “leapfrog” certificates to allow them to challenge the ruling at the Supreme Court, cutting out the Court of Appeal, and therefore making the process faster.
The litigants have now used those certificates and have asked the Supreme Court to hear their case, the FCA said in a statement.
So-called “leapfrog” appeals are rare and usually happen when a decision that is likely to be appealed and re-appealed is needed quickly. A recent example is Gina Miller’s Brexit-related case against the UK government. The Supreme Court can refuse to hear the case at this stage and instead redirect to the Court of Appeal.
The parties in the appeal are likely to be the FCA, Arch Insurance, Argenta Syndicate Management, MS Amlin Underwriting, Hiscox Insurance, QBE UK, RSA and Hiscox Action Group.
“It should be noted that the decision as to whether and where an appeal might take place will be a matter for the Supreme Court,” the FCA said in a statement.
“But the parties’ agreement to seek to expedite any such process is consistent with their mutual objective to achieve the maximum clarity possible for the maximum number of policyholders and their insurers in an expeditious and proportionate way.”
Yesterday, the FCS also published the final transcript of a hearing on 2 October and the order granting leapfrog certificates.
