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Supreme Court gives landmark judgment in COVID-19 business interruption test case appeal: 7KBW team acts for MS Amlin

15th Jan 2021

The Financial Conduct Authority v Arch Insurance (UK) Limited and others [2021] UKSC 1

Gavin Kealey QCAndrew Wales QCSushma Ananda and Henry Moore represented MS Amlin Underwriting Ltd (“MSA”) in the Supreme Court in the expedited test case brought by the FCA to determine whether selected business interruption wordings respond to COVID-19 losses.

The judgment of Lords Leggatt, Hamblen, Reed, Briggs and Hodge was given this morning: it can be viewed here.

This was the first ever test case.  Proceedings started only in June 2020, followed by an urgent, remote trial in July 2020 before a Divisional Court consisting of Flaux LJ and Butcher J.

The same 7KBW team also successfully represented Ecclesiastical Insurance Office plc (“EIO”) at first instance, with the FCA deciding not to appeal against the Divisional Court’s ruling that EIO did not cover COVID-19 losses under its lead wordings.

The Supreme Court held an expedited, remote appeal hearing on 16-19 November 2020 – just two weeks after ‘leapfrog’ permission to appeal directly from the Divisional Court was granted on 2 November 2020.

The Supreme Court commended the advocates for their “very able assistance”, remarking that “the quality of the written and oral submissions has been of the highest order and all involved are to be complimented” (at [44]).

The Supreme Court dismissed the insurers’ appeals and allowed the FCA’s appeals albeit on qualified terms.

The judgment is of considerable importance to insureds and insurers alike impacted by COVID-19 business interruption losses.  It is also a landmark decision because it makes significant new law on concurrent causation.

The judgment can be viewed here.

Gavin Kealey QC, Andrew Wales QC, Sushma Ananda and Henry Moore were instructed by DAC Beachcroft LLP.