Central Bank expects FBD to pay 'reasonable costs' of publican court challenge

A previous ruling would have meant the pubs would likely receive the minimum reasonable amount they required to fight the case but would not necessarily be reimbursed for all the costs they incurred.
Central Bank expects FBD to pay 'reasonable costs' of publican court challenge

The four test cases against FBD were taken by Dublin pubs, Sinnotts Bar, the Leopardstown Inn and Lemon & Duke, as well as Sean’s Bar in Athlone.  Picture: Brian Lawless/PA

The Central Bank expects FBD insurance to pay all “reasonable costs” of publicans who successfully challenged the insurance company over failure to compensate them for Covid-19 business disruption.

The bank's position was set out in a letter read to the Commercial Court on Friday.

The court previously ruled the costs should be awarded in the normal way, but said this was subject to any position taken by the Central Bank. 

The previous ruling would have meant the pubs would likely receive the minimum reasonable amount they required to fight the case but would not necessarily be reimbursed for all the costs they incurred.

The Central Bank’s letter makes clear it did not expect the publicans who took the test cases to be liable for any costs, supporting the position of three of the pubs in last month’s hearing. 

The pub owners indicated to the court on Friday they would engage with FBD on the matter, but there may have to be another hearing on costs.

The four test cases were taken by Dublin pubs, Sinnotts Bar, the Leopardstown Inn and Lemon & Duke, as well as Sean’s Bar in Athlone.

A hearing to decide on the amount of damages to be awarded to the pubs is due to begin on July 6.

Earlier this year, Mr Justice Denis McDonald found a policy sold by FBD covered the losses sustained by the pubs having to close due to the pandemic. 

The policy included a clause that cover was only valid where the pub had to close because there was an outbreak of an infectious within a 25 mile radius of the premises. 

FBD claimed this was not valid in this case because the closures were caused by a global pandemic. 

But Mr Justice McDonald said the cover was not lost where the closure was caused by nationwide outbreaks of the disease provided there was an outbreak within the 25-mile radius.

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