HFW Briefing – Wider consequences of the Supreme Court judgment in the FCA test case
On 15 January, the English Supreme Court handed down its final judgment in the COVID-19 Business Interruption test case commenced by the FCA. It is clear that the Supreme Court’s judgment will have wider ramifications for English insurance law (beyond COVID-19 business interruption claims), particularly with regard to causation and quantum.
However, in brief summary, the Supreme Court ruled on the key categories of “non-damage” Business Interruption extension clauses in dispute as follows.
- Disease Clauses respond to business interruption losses resulting from cases of disease which occur within a specified local radius. Each individual case of COVID-19 amounts to an effective proximate cause of the Government’s restrictions, the result being that disease clauses respond to a broader range of losses caused by the pandemic(including losses consequential upon national restrictions). » Read more