Mediation fails to resolve pub's dispute with insurer FBD over Covid-19 cover

The action by Dublin pub, Lemon & Duke, has implications for more than 1,000 pubs concerning insurance liability.
Mediation fails to resolve pub's dispute with insurer FBD over Covid-19 cover

A mediation has failed to resolve a dispute between a Dublin pub and insurer FBD over whether FBD must pay for losses of pubs closed as a result of the Covid-19 lockdown, the Commercial Court has heard.

As a result, an action by the Lemon & Duke pub will be one of four test cases, to be heard in October. The case has implications for more than 1,000 pubs concerning insurance liability.

Other publicans with similar insurance cover are waiting to see the outcome of the test actions.

The three other test cases are by the operators of Sinnott's Pub and Leopardstown Inn in Dublin and Sean’s Bar in Athlone.

Today, Michael Cush SC, for all the applicants other than Sean’s Bar, told Mr Justice David Barniville a mediation involving the Lemon & Duke had not been successful and it sought to proceed as one of the test cases.

Lemon & Duke, of Hibernian Way, Dawson Street, Dublin, is seeking an order directing FBD to indemnify it for consequential and ongoing losses arising out of the enforced closure of the bar on March 15 last as a result of the coronavirus.

It is also seeking damages on grounds including alleged negligence, breach of duty and breach of contract.

Paul Gallagher SC, for FBD, previously said the issues to be determined in the actions are ones of interpretation, including whether there was “an insured peril”, as well as “causation issues” and the extent of any indemnity.

The issue of what amount might be involved in damages could be left to a later hearing, he said.

The cases are by corporate entities that trade under pub names.

They are: Aberkent (Sinnotts, of King Street, Dublin); Hyper Trust (the Leopardstown Inn, Stillorgan, Dublin); Inn on Hibernian Way (Lemon & Duke, Duke Lane, Dublin); and Leinster Overview Concepts (Sean’s Bar, Athlone, Co Westmeath).

The Leopardstown Inn has said its closure was costing about €56,000 per week, based on weekly turnover of €80,000 and cost of sales of about 30%.

The pub has been availing of the Covid-19 wage subsidy scheme since March 26 to keep as many of its 70 employees as possible on the payroll.

The pub is part of the Loyala Group and other group companies in dispute with FBD operate the Bath Pub and the Old Spot, both on Bath Avenue, Dublin 4, the Landmark pub, Dublin, and Bakers Corner, Rochestown Avenue, Dublin.

The value of the cover for consequential loss for the companies is €7.45m, it is claimed.

Sinnott's said it was suffering a financial impact of about €30,253 per week, calculated on the basis of gross sales less VAT. Similar claims are made by other group pubs - the Submarine Bar, the Black Lion, the Marble Arch, the Barclay Club, Graingers, Club Lapello, and the Capitol Lounge.

The Lemon & Duke estimated it would have lost €770,960 by August 10, when pubs are to reopen.

The operator of Sean’s Bar said the total amount insured under its policy was €1.4m.

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