High Court Declares Four Pubs Are Entitled To Compensation From FBD For COVID-19-Related Business Disruption

The High Court has declared that the owners of Sinnotts, the Leopardstown Inn and the Lemon & Duke of Dublin, and Sean’s Bar of Athlone are entitled to be compensated by FBD Insurance for COVID-19-related business disruption.

A dispute started last year between the four pubs and FBD over whether the insurer should pay for losses that the pubs experienced due to COVID-19-related closures, and the four pubs entered cases over the dispute into the Commercial Court last May.

As reported by rte.ie, the High Court ruled that FBD’s policy covers the losses that the pubs experienced due to COVID-19-related closures.

The High Court’s decision is a landmark one that affects claims that have been made by over 1,000 other pubs and restaurants in Ireland.

The pubs’ lawyers claimed that the pubs are entitled to have their COVID-19-related losses covered under their insurance policies, however, FBD said that the closures in question were not due to an outbreak of COVID-19 at any of the pubs or within a 25 mile radius of them, but rather were a result of a national situation that was not covered by the insurance policies.

The High Court disagreed with FBD’s interpretation, and Justice Denis McDonald stated that cover was not lost during closures caused by nationwide COVID-19 outbreaks, provided there was an outbreak within a 25 mile radius and that said outbreaks caused the closure.

McDonald said that such outbreaks were a cause of pubs closures in March of last year, and the fact that closures outside of a 25 mile radius were also causes of the decision did not alter that conclusion.

McDonald ruled that the issue of quantifying the losses that the pubs experienced will be dealt with at a later date, and the case will return to the court on February 17.

FBD Response

FBD said that the court’s ruling provided much needed clarity to all concerned, and that it is committed to paying valid claims from pub insurance policyholders and will endeavour to process claims as soon as possible and in line with the judgment handed down.

Rte.ie quotes FBD as saying, “We understand the significant challenges our Public House Insurance policyholders currently face. FBD will arrange interim payments to affected policyholders while awaiting final clarity on quantum.”

FBD said that it will now consider the effects of the judgment with its reinsurers and will revert to the market on the estimated net cost of COVID-19-related business interruption claims in due course, and added, “We expect the cost to be well within the range of considered financial outcomes, with FBD remaining strongly capitalised.”

FBD also said that it believes that the court process was the fairest way to reach a resolution on this matter, and that it tried to ensure that the proceedings were as fast and efficient as possible for the parties involved.

LVA CEO Statement

Reacting to the court’s decision, Licensed Vintners Association (LVA) chief executive Donall O’Keeffe said in a statement published on the LVA’s website, “The LVA welcomes [the] High Court decision in favour of three of our members (Noel Anderson, Chris Kelly Group, Loyola Group) and Sean’s Bar, Athlone, in their case against FDB for COVID-19 business interruption cover.

“These publicans deserve enormous credit as their action will prove critical to pubs with similar policies right around Ireland.

“It was grossly unfair that these family businesses had to go to the High Court against the might of a publicly quoted insurer to have their claims validated.

“We are now calling on insurers to quickly review their business interruption policies in light of [the High Court’s] decision and to promptly pay all valid claims.

“Given the disastrous impact of the pandemic on the pub trade, [the High Court’s] judgement will provide hope to many publicans all across the country.”

VFI CEO Statement

Meanwhile, Vintners Federation of Ireland (VFI) chief executive Padraig Cribben said in a statement published on the VFI’s website, “This High Court decision is the first good news the 1,100 publicans who are FBD customers have received since the crisis began last March. Publicans took out business interruption cover with FBD in good faith and the decision by the insurance company to challenge that cover caused huge distress for our members at a time when they were at their most vulnerable.

“While the full detail of the court’s 214-page decision is still being analysed, we know that publicans with these policies will now be compensated for the losses incurred by the pandemic. A quantum hearing where the amount of compensation will be decided will be held in due course.

“It now follows that other insurance companies should review their business interruption claims and begin a process of working with publicans to ensure adequate compensation is provided for the interruption of their businesses.”

Original article on hospitalityireland.com by Dave Simpson.

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