Judge hopes to fix date for FBD quantum hearing after Easter

The publicans challenged FBD Insurance Plc's refusal to indemnify them, as well as the insurer’s claim its policies did not cover the disruption caused by Covid-19.

Test actions brought by four publicans to determine how much FBD must pay out on business disruption claims caused by Covid-19 will be heard in the High Court after April.

In his decision earlier this month, the outcome of which affects claims made by some 1,000 Irish pubs and restaurants, Mr Justice Denis McDonald found that a policy sold by FBD covered losses pubs sustained by having to close due to the pandemic.

Mr Justice McDonald has now put in place a timetable for the pubs to submit financial information to FBD.

The judge noted that discussions are taking place between the parties to see if only one out of the four test cases brought before the court should proceed to a hearing on quantum.

He said while he was not sure when a date could be fixed to hear that aspect of the claim, he was hopeful that a date could be fixed when the matter returns before the High Court in mid-April.

The four test actions were taken by Dublin bars Aberken, trading as Sinnotts Bar; Hyper Trust Ltd, trading as ‘The Leopardstown Inn' and ‘Inn on Hibernian Way’ Ltd trading as Lemon & Duke, as well as Leinster Overview Concepts Ltd, the owner of Sean's Bar, which is based in Athlone, Co Westmeath.

Also today, the court heard submissions on issues arising from the judgment, where differences remain between the parties.

The court invited the parties' submissions on matters including the proper interpretation to be applied to the term 'closure' within FBD's Public House Policy of insurance, which is relevant to quantifying the losses.

The publicans, represented by James Doherty, Michael Cush, and Kelley Smith, argued that the correct interpretation of the policy did not require the pubs to be fully closed in order for them to be covered.

They also claim the policy also indemnifies them during the periods when the pubs were partially closed or limited in what trade they could do while various government restrictions were in place.

In reply Caron Geoghegan for FBD said that the court should interpret the section of the policy differently from the publicans.

Counsel said that the language contained in the policy clearly refers to the period when the plaintiff's businesses were "completely closed," and not partially closed, and when certain pubs were carrying on some trade on their premises.

The publicans are also seeking that the legal fees they incurred are paid on an enhanced solicitor-client basis.

They claim as they had to engage in these test actions, where FBD has gained the benefit of a decision which has very wide implications for the insurer and its clients.

If they were awarded costs on a lower scale, the pubs say they would be left in a less advantageous position than policy holders who did not take part in the test cases, which was not a fair outcome.

FBD argues that the fact the cases were test actions was not a reason for the court to award costs against it on the enhanced scale. Counsel said that before the trial started FBD agreed to make a contribution towards the plaintiff's legal costs.

The courts should award the level of costs sought in scenarios including when the court is unhappy with the conduct of the case or in exceptional circumstances.

Such scenarios did not exist in these test actions, counsel submitted.

Following submissions from the parties the judge reserved his decision and said he hoped to rule on them in mid-April.

In his judgment earlier this month, the judge disagreed with FBD's interpretation of its policy.

He said that cover is not lost where the closure is prompted by nationwide outbreaks of disease provided that there is an outbreak within the 25-mile radius and that outbreak is one of the causes of the closure.

The publicans challenged FBD Insurance Plc's refusal to indemnify them, as well as the insurer’s claim its policies did not cover the disruption caused by Covid-19.

The dispute arose after the insurer refused to provide policy holders with cover after the pandemic resulted in the first temporary closure of businesses, in March 2020.

The owners claimed that under their policies of insurance with FBD they were entitled to have their consequential losses covered by an insurable risk.

They also claimed that by failing to pay out on the policy the insurer was in breach of contract.

The publicans claimed the policies taken out with FBD contain a clause that states the pubs will be indemnified if their premises were closed by order of the local or Government authority if there are "outbreaks of contagious or infectious diseases on the premises or within 25 miles of same".

FBD disputed the claims and argued that the closures did not occur as a result of an outbreak of disease at the premises or areas where the pubs are located.

FBD also said it has never provided cover for pandemics and the insurance market in Ireland does not insure against pandemics.