UK Supreme Court Decision in the ‘FCA’ Case Delivered

The UK Supreme Court has delivered it’s judgement in the Appeal by the Insurers and the FCA in respect of the ‘FCA’ case.


The original High Court hearing was a ‘test case’ to determine the extent of cover (or not) for business interruption arising as a result of occurrences/outbreaks of Covid 19. Such interruptions typically followed orders made by Government or Local Authorities.

It should be noted that the sample wordings scrutinised by the Court only included those where ‘disease’ was included as an extension to the business interruption cover, and then where there was a geographical radius [e.g. 25 miles] for an occurrence of the ‘disease’.

The High Court decision had been broadly favourable for (some) Policyholders. The Insurers (and the FCA themselves) sought a ‘leap frog appeal’ (jumping past the Court of Appeal) in order to have the issues addressed urgently by the UK Supreme Court.

The Supreme Court judgement is, if anything, more favourable to policyholders than the original High Court determination.

The Court clarified:

  • How the so-called ‘disease’ clauses should be interpreted.
  • How the issue of Causation should be addressed.
  • The interpretation of ‘Hybrid’ clauses and how causation applied thereto.
  • The Trends Clause – C19 and its consequences will not be ‘trends’ or ‘circumstances’ to be applied to these claims.
  • Pre-Trigger Losses – disregarding any fall in revenue prior to the policy being triggered.
  • That the Orient Express Hotels case was wrongly decided and that it has been overruled.

This represents the ultimate decision of the United Kingdom’s legal system. Whilst this decision is not in any way binding in this jurisdiction, it is said to have a persuasive effect on the Irish Courts.

We can now see that, although the majority of policies did not create cover for the COVID19 crisis, some certainly did. We will be approaching the respective insurers and adjusters in the coming days and weeks seeking to have them give effect to this decision.

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