Hugh James acts for successful clients in £7.5M ‘Salon Gold’ Arbitration

Hugh James acted for successful clients in this landmark test case relating to ‘Salon Gold’ insurance policy.

The collective Arbitration proceedings concerned over 300 claims worth more than £7.5M for business interruption losses due Government imposed nationwide lockdowns during the Covid-19 pandemic.

Hugh James was instructed by twenty-four hair and beauty salons each of which had their claims for business interruption losses rejected by Canopius Managing Agents Limited t/a Salon Gold.

The Arbitrator, Sir Richard Aikens, has handed down a final binding award finding emphatically in favour of all thirteen Salon Gold test cases. The award paves the way for hair and beauty salon owners across England & Wales who suffered devastating losses when forced to close during the COVID-19 pandemic due to the national lockdowns to finally be compensated.

Erich Kurtz, Senior Associate in the Financial Mis-Selling team successfully represented numerous hair salons throughout England & Wales in the case against.

The award comes following a 4-day arbitration hearing in September 2023 held in London. Hugh James joined forces with RLK Solicitors, working closely together to advance legal arguments on behalf of the policyholders.

It is now hoped policy claims can be quickly assessed to help ease the financial burden the businesses have endured since March 2020.

Rhodri Stafford, owner of Rodyssey Hair Design commented:

“The compensation that I receive will be a huge help. I still owe Covid-19 related debts which I have had to balance with continuing to run my salon, pay for rent and overheads. I am absolutely thrilled with this success as I know my business will be secure and I can finally move on from the pandemic and pursue my passion.”

Erich remarked: “It was a huge privilege to act on behalf of Rodhri and indeed all of the Policyholders involved in this arbitration. Each of them has shown incredible resilience, especially given the ongoing financial struggles many have faced.

“I am delighted that they have been rewarded with this Arbitration Award and now we can engage with Salon Gold in the loss adjustment process to recover their compensation”.

Whilst the overall cohort of Salon Gold policyholders was far larger, thirteen test cases were selected to litigate before the Arbitrator. These test cases utilised a mix of locations, from cities to towns, villages to those in the countryside, to determine what constituted an ‘emergency likely to endanger life’ and whether that was ‘in the vicinity’ of the premises.

Erich adds:

“Sir Richard’s Award provides much needed legal certainty to Policyholders and the insurance market alike where the policy wording contains a Public Emergency Extension. It will act as persuasive authority to those with similar policy wording to assist policyholders and insurers to reach out to each other and resolve disputes.
“The Award categorically finds in favour of policyholders. Covid-19 as a national pandemic was an “emergency, likely to endanger life” and there was no obligation on a policyholder to demonstrate that the disease occurred or manifested in the vicinity of the premises.”