On Friday, 8 February 2021, Mr Justice Denis McDonald delivered his judgment in the landmark case involving four pub owners (the “Insured”) in an action against FBD Insurance Plc (the “Insurer”).
Mr Justice McDonald found that the Insured were entitled to be compensated for the disruption of their business as a result of the Covid-19 pandemic.
The Case
The Insured were made up of Dublin Bars, Aberken, trading as Sinnotts Bar; Hyper Trust Ltd, trading as the Leopardstown Inn; and Inn on Hibernian Way Ltd, trading as Lemon & Duke; and Leinster Overview Concepts Ltd, the owner of Sean’s Bar in Athlone, Co Westmeath.
A dispute arose between the Insured and their Insurer following the refusal of FBD to provide cover to its policy holders who were affected by the first lockdown in March 2020, resulting in the temporary closure of businesses. FBD took the position that the policies did not cover the disruption caused to businesses as a result of Covid-19.
The Judgment
Mr Justice McDonald did not agree with the Insurer’s interpretation. His detailed judgment stated that cover is not lost where the closure is prompted by nationwide outbreaks of disease, provided there is an outbreak within the 25-mile radius and that outbreak is one of the causes of the closure. However, on the issue of quantifying the losses in question, Mr Justice McDonald noted that this would be dealt with at a later date.
The decision, which was due to be delivered in January 2021, was deferred to allow the parties to make submissions to the court arising out of a judgment from the UK’s Supreme Court where similar issues were raised, and which we covered in our article of 18th January, 2021.
The eagerly awaited decision will have a significant bearing on similar claims made by some 1,000 Irish pubs and restaurants.
The matter has been adjourned to a later date this month to allow both sides consider the judgment in detail and to provide the parties with an opportunity to make further submissions on foot of the judgment.
Albeit the court has now found in favour of the Insured, rejecting the insurer’s interpretation of the policy, the next big milestone as part of this landmark case will be quantifying loss.
About the author: Ciaran Leavy, Partner and Head of Commercial Litigation
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