Hugh James secures landmark High Court victory for Welsh Michelin Star Restaurant in historic Covid-19 business interruption test case, as listed in the Lawyers ‘Top 20 Cases of 2023’.
The High Court today has handed down judgment in six ‘at the premises’ test cases that have vital implications for businesses across England & Wales who suffered devastating losses when forced to close during the COVID-19 pandemic due to national lockdowns imposed by the UK Government.
The Supreme Court in January 2021 handed down a positive ruling to Claimants with business interruption policies which contained a clause in relation to losses caused by COVID-19 occurring within a specified radius. However, no decision was made on insurance clauses covering the occurrence or manifestation of diseases ‘at the premise’ until today when the High Court emphatically found in favour of policyholders.
The High Court judgment is of crucial importance to small and medium sized businesses, not least those in the hospitality and leisure sectors, who were amongst the worst hit, compounded by most insurers refusing to pay policyholders with insurance ‘at the premises’ cover.
Erich Kurtz, Senior Associate in the Financial Mis-Selling team successfully represented ‘Why Not Bar’ who trade as Michelin star restaurant SY23, y Sgwar and the Courtyard in Aberystwyth against Zenith Insurance PLC & QIC Europe Limited.
Mark and Rhian Phillips, owners of Why Not Bar commented:
“The High Court’s ruling is a pivotal moment for our business and no doubt countless other business who continue to fight for survival amidst the fall out of the pandemic.
“We have faced significant financial struggles before, during and after the pandemic made all the worse with the personal losses of my father, mother-in-law and aunt which many businesses will have endured.
“This judgment offers real hope that we are one massive step closer to finally securing insurance payouts that are desperately needed and have been unjustly refused. As a member of the hospitality industry struggling to balance the loss of my loved ones with keeping my business alive, this ruling provides an enormous sense of validation that the sacrifices we have made have not been in vein.”
“It was a huge privilege to act on behalf of Mark & Rhian who have shown remarkable resilience, unwavering belief in their case and have been justly rewarded with today’s judgment. I am delighted for them and wish them ever success in the future.”
Despite the unforeseen nature of Covid-19, three years after the onset of the pandemic, many businesses remain in complex disputes with insurers refusing to settle claims under the policy.
“The High Court’s judgment will now bind insurers, providing vital legal certainty, and be used to assist other policyholders with ‘at the premise’ insurance policies reach out to their insurers and secure compensation.
“The decision emphatically resolves one of the most contentious issues between businesses and their insurers in this field – whether cover exists in principle when the UK Government imposed national lockdown where businesses can show COVID-19 occurred or manifested ‘at their premises.’
The High Court held that the Supreme Court analysis on concurrent causes in FCA v Arch  UKSC 1 applied on causation in ‘at the premises’ clauses, and that none of the insurers’ arguments in response were persuasive and that at Para 249 – “this seems to me to be an appropriate result, since any other conclusion would give rise to anomalies which it would be difficult rationally to explain to a reasonable SME policyholder who read the policy”.
Further, it was found that there was no separate and additional requirement for the relevant occurrence or manifestation of COVID-19 to be reported to the UK Government before national lockdown was imposed (Para 250) – “the requirement for reporting and knowledge is rejected as being inconsistent with the Supreme Court decision and unsupported by any wording in the clauses considered.”