The FCA Business Interruption Test Case

On the 1st May 2020 the Financial Conduct Authority (FCA) announced its intention to obtain a court declaration aimed at resolving the contractual uncertainty around the validity of many business interruption (BI) claims in relation to the Covid-19 pandemic.

The FCA is seeking a judgment from the High Court that will be legally binding on the insurers that are parties to the test case in respect of the interpretation of a representative sample of non-damage business insurance policy wordings. Taking into consideration the representative nature of the policies and wordings selected, the FCA anticipates that the test case will provide guidance for the interpretation of many other BI policies that are not in the representative sample.

Full details of the test case, and further information for policyholders can be found on the FCA’s website:

www.fca.org.uk/firms/business-interruption-insurance

In addition you can register for the latest business interruption updates from the FCA using the link below:

www.fca.org.uk/sign-business-interruption-bi-insurance-email-updates

If you have submitted a claim or complaint under a BI policy, we will notify you by 15th July 2020 of whether your claim or complaint is potentially affected by the test case and the implications of that.

In respect of a complaint the Financial Ombudsman Service has issued its own guidance on business interruption insurance and Covid-19, which is available on its website.

https://www.financial-ombudsman.org.uk/coronavirus

Timetable for the FCA test case

A summary of the important dates for the test case are set out below:

09 June 2020

The FCA initiated proceedings in the High Court

16 June 2020

The Court fixed the timetable for the case and other procedural matters at the first case management conference

23 June 2020

Insurers filed their Defences

26 June 2020

Second case management conference

03 July 2020

FCA files its Reply

20-23 July and 27-30 July 2020

Test case to be tried over 8 days at a court hearing before Lord Justice Flaux and Mr Justice Butcher

Keeping you informed

For customers impacted by the test case, we will contact you directly to provide updates on the test case and if there have been any changes to previous communications that we have sent.