UK pub owners mull class action against insurers
Legalbrief Today Issue 4928
Pub and restaurant owners in the UK who face losing their livelihoods have joined forces to take legal action against insurers who are refusing to pay out for losses related to the coronavirus lockdown. A report in The Independent notes that they say insurers are using unfair means to get out of paying claims, and that thousands of hospitality businesses are at risk of disappearing because of it. Most bars and pubs have insurance to cover them for an unexpected shutdown, or ‘business interruption’ as its usually referred to in policy documents. Some policies even specifically cover an enforced closure by authorities, or closure due to disease, yet clauses in the small print mean insurers have so far paid out few claims. Now, a top law firm is offering publicans a potential lifeline. Mishcon de Reya has said it will look at hospitality businesses’ insurance policies for free and, where a group of them have a reasonable claim for a payout against a particular insurer, it will take action. Without this group approach, pubs and restaurants simply could not afford to mount a legal challenge against a large insurer. Sonia Campbell, partner and head of the insurance disputes practice at Mishcon de Reya, said hospitality businesses desperately need to mitigate their losses caused by the government-enforced closure. ‘In times of crisis they expect their insurance to respond. Yet I am hearing time and time again that insurers are either stone-walling, unfairly limiting or simply point-blank refusing to pay out under business interruption policies,’ said Campbell. This could be open to legal challenge, Campbell said.