Business insurance test case set for Supreme Court showdown

The dispute between UK insurers and the Financial Conduct Authority over business interruption insurance during the Covid pandemic is set to be determined in the Supreme Court. At a hearing on 2 October, High Court judges Lord Justice Flaux and Mr Justice Butcher gave the regulator and a range of insurers permission to ask the Supreme Court to reconsider the case, missing out a hearing at the Court of Appeal. 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 case is time-sensitive as it involves around 370,000 policy holders who, due to complicated wording, are unsure whether they are entitled to make a claim for business interruption due to Covid 19. The case is also complicated. The FCA is asking the court for clarification and resolution on a variety of different wordings used across the industry in business interruption insurance policies. In a 162-page ruling last month, the judges did just that. However, the ruling does not expressly come down on one side or the other. Instead, it goes though the wordings bought up at the trial and provides specific guidance. In a statement on its website, the FCA said the judges had backed the arguments brought by lawyers representing policy holders in “the majority of key issues”. At a hearing on Friday to work out next steps, lawyers argued about the detailed wording of a series of declarations connected to the ruling designed to give specific guidance for specific situations as well as asking for permission to appeal directly to the Supreme Court. Although a date has yet to be set for the hearing, judges at the Supreme Court should be able to hear the case quite soon. “As far as we are aware, they are ready and waiting for us to come,” Colin Edelman QC, representing the FCA said during the hearing. Photo by Jonathan Goldberg/Shutterstock