Restau­rants chal­lenge in­sur­ers over losses in lock­down

About 25 court cases be­ing taken against in­sur­ers and un­der­writ­ers

The Irish Times - - Business Today - COLM KEENA and PETER HAMIL­TON

About 25 restau­rants have filed High Court pro­ceed­ings against their in­sur­ers in re­la­tion to the losses they have in­curred be­cause of the coro­n­avirus lock­down, and the Restau­rants As­so­ci­a­tion of Ire­land (RAI) has up to 140 mem­bers with po­ten­tial claims, ac­cord­ing to Ge­orgina Robin­son, a so­lic­i­tor act­ing for the restau­rants.

Pubs and restau­rants are in dis­pute with their in­sur­ers over whether their poli­cies cover them for the loss of in­come caused by the lock­down. It is not clear which sec­tor will see the first test case come to court.

In May a num­ber of cases taken by pubs against FBD in­sur­ance were en­tered into the com­mer­cial list of the High Court on the ex­pec­ta­tion they would serve as test cases for more than 1,000 pubs that are ar­gu­ing that their in­sur­ers should pay out for the losses in­curred as a re­sult of the lock­down.

The dis­pute with FBD has been listed for Oc­to­ber 6th and the hear­ing is ex­pected to take up to two weeks.

Robin­son O’Neill so­lic­i­tors

On Thurs­day, Robin­son O’Neill so­lic­i­tors, Dublin, lodged pro­ceed­ings on be­half of a num­ber of res­tau­rant op­er­a­tors against Spe­cial­ist Un­der­writ­ing Ser­vices, of Windy Ar­bour, Dublin. Cases are also be­ing taken against other in­sur­ers and un­der­writ­ers.

The restau­rants’ cases are be­ing taken by a dif­fer­ent le­gal route from the cases be­ing taken by the pubs, and it is not clear which will come to court first.

“Our strat­egy is to get the cases heard as quickly as pos­si­ble, per­haps be­fore the cases that the pubs are tak­ing against FBD,” said Adrian

Cum­mins, chief ex­ec­u­tive of the RAI. “Let’s see now how the in­sur­ance com­pa­nies re­act.”

A spokes­woman for Spe­cial­ist Un­der­writ­ing Ser­vices said it did not wish to com­ment.

The pubs are seek­ing a full court hear­ing in­volv­ing wit­nesses, with the claims in­clud­ing dis­putes over as­sur­ances some pubs say they were given about their poli­cies cov­er­ing the coro­n­avirus pan­demic.

The Oc­to­ber hear­ing will deal only with the is­sue of li­a­bil­ity, and the out­come is likely to be ap­pealed.

If the pubs are ul­ti­mately suc­cess­ful, then the mat­ter goes back to court for con­sid­er­a­tion of the topic of “quan­tum”, or how much com­pen­sa­tion the pubs should get.

‘‘

Our strat­egy is to get the cases heard as quickly as pos­si­ble, per­haps be­fore the cases that the pubs are tak­ing against FBD. Let’s see now how the in­sur­ance com­pa­nies re­act.

Spe­cial sum­mons

The cases be­ing taken by the restau­rants are by way of spe­cial sum­mons, where the restau­rants are seek­ing a dec­la­ra­tion from the court that their poli­cies cover them for losses caused by the lock­down.

There would be no need for wit­nesses for such a hear­ing and it is pos­si­ble the le­gal sub­mis­sions could be made in one day.

If the restau­rants are ul­ti­mately suc­cess­ful, the is­sue of quan­tum would then be de­cided by way of a sep­a­rate hear­ing.

At the mo­ment the abil­ity of the High Court to hear cases in­volv­ing wit­nesses is se­verely re­strained be­cause of the pub­lic-health guide­lines as­so­ci­ated with the pan­demic.

A key mat­ter for both the pubs and the restau­rants is whether a clause in their poli­cies cov­er­ing them from losses aris­ing from the out­break of dis­ease within a cer­tain de­fined ra­dius of their busi­ness, ap­plies to a pan­demic where the whole State was the sub­ject of a lock­down.

Michael O’Hara, a di­rec­tor of Jupiter Dawn Lim­ited, which trades as Yeats County Inn, Curry, Co Sligo, said his com­pany’s claim against Spe­cial­ist Un­der­writ­ing Ser­vices was con­nected with busi­ness-in­ter­rup­tion in­sur­ance.

“Our pre­mium has gone up ev­ery year and in the five years I’ve been here we’ve never had a claim,” he said, adding that he paid about ¤8,000 for in­sur­ance this year.

Mr O’Hara said his bro­ker had sug­gested to him that he might re­ceive a re­duc­tion in his pre­mium for the months he was closed as a re­sult of the Covid-19 cri­sis.

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