Josephine Higgs KC acted for various policyholders in Liberty Mutual Insurance Europe SE v Bath Racecourse Company Ltd [2025] EWCA Civ 153, in which the Court of Appeal handed down judgment on 21 February 2025.

The appeal was one of The Lawyer’s Top 10 Appeals of 2025, and the Court of Appeal’s judgment provides important guidance for outstanding business interruption insurance claims arising from the Covid-19 pandemic.

The Court of Appeal rejected the appeals of both the insurers and the policyholders, upholding the judgment of Mr Justice Jacobs at first instance.

The appeal raised several issues of general importance.

The insurers’ appeals related to the issue of limits in the context of composite policies. The Court concluded that there were separate limits available for each policyholder, rather than, as Insurers contended, one aggregate limit for all policyholders insured under the policy. The Court held that this is how the policies were properly to be construed in the context of a composite policy comprising a series of contracts of insurance insuring each policyholder separately.

The policyholders’ appeals related to whether credit had to be given for furlough payments. The Court held that furlough payments did reduce the losses capable of being claimed under the policies. It found that the payments engaged the savings clauses: the furlough payments caused the insureds’ wage costs to ‘cease’ or ‘reduce’ and the payments were ‘in consequence of’ the insured peril. The Court rejected the policyholders’ further argument that furlough payments were collateral or res inter alios acta.

There was a further issue of general importance, namely whether the FCA Test Case concurrent causation approach applied. However, Insurers abandoned their appeal on this issue after the Supreme Court refused permission to appeal in the ‘at the premises’ disease clause case of London International Exhibition Centre.

The full judgment can be found here.

Josephine Higgs KC, acting with Jeffrey Gruder KC of Essex Court Chambers, appeared for Gatwick Investment Limited and Starboard Hotels Limited, instructed by Roger Franklin and Lauren Murphy of Edwin Coe LLP.