The Court of Appeal has upheld a complicated ruling that, for insurance reasons, broadly found that losses from the Covid pandemic weren’t caused by a single event in Wuhan but by government decisions in the UK.
The case is between restaurant group Various Eateries Trading (formerly known as Strada) and its insurer, Allianz.
The restaurant group had been seeking £16m in business interruption insurance payments to compensate for the closure of 10 restaurants during the various lockdowns that took place during the pandemic.
Allianz, however, has been seeking to reduce the payout to £2.5m, arguing there was a single occurrence that triggered the insurance policy and therefore there should only be one claim.
That single occurrence, it argues, was the outbreak of the pandemic in Wuhan in 2019.
The case went to trial with a number of other test cases in 2022. Mr Justice Butcher ruled that, for the purposes of the insurance policy, the UK government’s enforced closure of restaurants in March 2020 should be taken as a trigger, along with extra restrictions imposed in September that year.
The restaurant group argued that these two events should be applied separately to each restaurant. The judge disagreed.
Both sides appealed the ruling and, in a judgment handed down today, a three-judge panel at the Court of Appeal ruled that the lower court judge was correct on both counts.
The principles underpinning business interruption insurance were cemented by a fast-tracked lawsuit brought by business regulator the Financial Conduct Authority (Financial Conduct Authority v Arch Insurance Ltd and others [2021] UKSC 1; [2021] EGLR 12).
In the litigation, the High Court and the Supreme Court broadly backed most of the points brought by lawyers representing policyholders.
Even so, cases are still going though the court system with insurers and policyholders seeking further clarity relating to specific issues.
The Various Eateries case was heard alongside claims from pub operator Stonegate and baker Greggs. Stonegate and Greggs both settled their cases, so didn’t bring appeals.
Various Eateries Trading Ltd (formerly known as Strada Trading Ltd) v Allianz Insurance plc
Court of Appeal (Flaux, Newey, Males), 16 January 2024
