LONDON (Reuters) - An action group representing almost 400 British businesses shut by the coronavirus pandemic has made a bid to team up with Britain’s markets watchdog to bolster a High Court case to decide which insurers should pay out.
The Hiscox Action Group on Wednesday formally applied to “give victims a voice” in the Financial Conduct Authority’s (FCA) test case, that will pitch the regulator against eight insurers and see a London judge pore over selected insurance policy wordings.
The FCA turned to the courts after small businesses, from restaurants to leisure groups, said they faced ruin after attempts to claim millions of pounds collectively in compensation for lost business were rejected by insurers.
The case is designed to quickly clarify whether the pandemic and a government lockdown should trigger business interruption policies that provide cover when insured premises cannot be used because of restrictions imposed by a public authority and in the event of a notifiable disease or infection.
“It is our members that are going out of business and they are entitled to be heard,” said Mark Killick, a member of the Hiscox Action Group steering committee.
A judge is expected to decide whether to allow the group to join the FCA’s case on Friday.
The Hiscox Action Group, represented by law firm Mishcon de Reya, has also launched a 47 million pound ($58 million), expedited arbitration claim against Hiscox on behalf of 369 policyholders.
Hiscox said it was keen to work with all parties to expedite a resolution, accepted each customer’s contractual right to arbitrate and was “working through” how arbitrations could be taken forward effectively.
The FCA said it would continue to engage “extensively” with the Hiscox Action Group, but noted that policyholders did not need to join its court action to benefit from the case.
Reporting by Kirstin Ridley and Carolyn Cohn; Editing by Kirsten Donovan