(Adds Hiscox Action Group comment)
By Carolyn Cohn
LONDON, June 26 (Reuters) - Hiscox, QBE and
Aviva policyholders can join Britain's markets watchdog
in a High Court case to decide which insurers should pay out to
businesses shut by the coronavirus pandemic, a judge said on
Friday.
The policyholder groups would be able to present their views
directly alongside the Financial Conduct Authority, which is
consolidating the case for policyholders, High Court Judge
Christopher Butcher told a hearing.
"It is necessary...that the argument is fully and properly
put," he said at the hearing to discuss the procedural issues of
the case.
The Financial Conduct Authority (FCA) turned to the courts
after small businesses, from restaurants to leisure groups, said
they faced ruin after attempts to claim millions of pounds
collectively in compensation for lost business were rejected by
insurers.
The case against eight insurers, including Hiscox and QBE,
is designed to clarify whether the pandemic and a government
lockdown should trigger business interruption policies that
provide cover when insured premises cannot be used because of
restrictions imposed by a public authority and in the event of a
notifiable disease or infection.
The test case is expected to provide clarity for tens of
thousands of policyholders, including those who have policies
with similar wordings sold by other insurers.
Aviva is not a defendant in the case but the HIGA action
group which represents Aviva and QBE policyholders said wording
being tested in the case was "materially similar" to the Aviva
policy.
The FCA had agreed the policyholders could join and insurers
did not oppose, the hearing heard.
However, the judge declined to allow a policyholder with a
pubs policy with RSA, another of the insurers in the case, to
join. The pubs policy focused on physical damage to property
which was not within the scope of the case, he said.
Hiscox declined to comment while Aviva, RSA and QBE did not
immediately respond to requests for comment.
Mark Killick, a member of the Hiscox Action Group steering
committee, which represents almost 400 Hiscox policyholders,
said the decision would give policyholders a voice in the case,
but the group was also continuing with a separate claim against
Hiscox.
The case is due to come to trial in late July.
($1 = 0.8050 pounds)
(Additional reporting by Kirstin Ridley; editing by Emelia
Sithole-Matarise and Louise Heavens)
