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Insurers succeed on sub-limits preliminary issue in business interruption insurance claim brought by PizzaExpress Group

30th May 2023

PizzaExpress Group Limited and others v (1) Liberty Mutual Insurance Europe SE (2) XL Insurance Company SE [2023] EWHC 1269 (Comm)

Sushma Ananda (led by David Scorey KC of Essex Court Chambers) acted successfully for Insurers in the latest of the COVID-19 business interruption insurance (“BII”) battles featuring the well-known Pizza Express restaurant chain.

Jacobs J reached the clear conclusion that the sub-limits relevant to the ‘at the premises’ disease and prevention of access BII extensions in the Aon Trio policy applied “any one Occurrence” where “Occurrence” was defined broadly to mean “any one loss or series of losses arising out of and directly resulting from one source or original cause”. Jacobs J held that Insurers’ construction of the policy to this effect (i) was in accordance with its obvious meaning, (ii) was how any reasonable policyholder would read the policy, and (iii) avoided a number of odd results produced by Pizza Express’s construction.

The financial consequence of this decision is significant: even if coverage is triggered under the relevant BII extensions, Pizza Express’s £200 million claim is reduced to £250,000 or, at most, a small multiple of that sum.

Jacobs J’s judgment on this preliminary issue can be accessed here. Jacobs J did not consider that Pizza Express’s appeal had any real prospects of success, and therefore refused permission to appeal. It is anticipated that permission will be sought from the Court of Appeal.

Two additional preliminary issues hearings have been ordered to take place in this litigation to determine coverage and causation in relation to the ‘at the premises’ disease clause and the prevention of access clause in the Aon Trio policy alongside other COVID-19 BII cases raising similar issues.

Sushma Ananda (and David Scorey KC) are instructed by Ian Plumley, Matt Dalley and Tomas Amaral at DAC Beachcroft LLP.