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Insurers’ decision to appeal Covid insurance test case “disgraceful”

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Campbell: Insurers dragging their feet

A law firm at the forefront of the business interruption insurance test case [2] has described insurers’ decision to appeal the High Court ruling as “disgraceful”.

Mishcon de Reya said it was “further evidence of insurers’ attempts to delay paying out on policies, taken in the full knowledge that many more UK businesses are now likely to go under”.

The firm is acting for both the Hospitality Insurance Group Action and the Hiscox Action Group, the two organisations allowed to intervene in the High Court case.

On Friday, the High Court granted ‘leapfrog’ certificates for an appeal to the Supreme Court to the Financial Conduct Authority (FCA), Arch Insurance, Argenta Syndicate Management, MS Amlin Underwriting, Hiscox Insurance Company, QBE, Royal & Sun Alliance and the Hiscox Action Group.

Ecclesiastical Insurance Office withdrew its application before the hearing, while the court rejected an application from QIC Europe to become a party to the test case in order to bring an appeal.

Sonia Campbell, the Mishcon de Reya partner leading hospitality industry action, said: “Rather than agreeing to abide by the court’s judgment and now pay claims, it is disgraceful that insurers continue to drag their feet and watch more and more of their own policyholders go to the wall.

“The action of the Insurers shows exactly why there is a need for policyholders to join forces and take action together.”

She said the appeal could mean “many more months of uncertainty” for policyholders about whether their insurance would cover the impact of Covid-19.

The group is backed by Harbour Litigation Funding.

The FCA said it would press on with the application to appeal “while continuing discussions with insurers and action groups to find a solution that avoids the need for appeal and enables pay-outs on eligible claims as quickly as possible”.