(Adds Financial Conduct Authority comment)
By Kirstin Ridley and Carolyn Cohn
LONDON, Nov 3 (Reuters) - The UK Supreme Court will hear an
appeal on Nov. 16 of the Financial Conduct Authority's (FCA)
test case over which insurance companies should offer payouts to
small businesses battered by the coronavirus pandemic.
The hearing is expected to last four days, the court said in
a statement.
Small businesses – from cafes and wedding planners to events
businesses – have said they faced ruin after attempts to claim
compensation for business losses during the pandemic, which
prompted a three-month national lockdown in March followed by
other restrictive measures, were rejected by insurers.
The FCA, six insurers and an action group are appealing a
lower court judgment that sought to clarify whether 21 policy
wordings, affecting potentially 700 types of policies, 60
insurers, 370,000 policyholders and billions in claims, cover
disruption and government-ordered closures to curb the virus.
Although expedited, the appeal has delayed payouts on
disputed claims just as thousands of struggling businesses face
a second national lockdown this week to curb resurgent
coronavirus cases.
The FCA said in September that the lower court found in
favour of policyholders' arguments in the majority of key
issues.
Lower court judges examined three types of policy wordings
that cover business interruption: when insured premises cannot
be accessed because of public authority restrictions, in the
event of a notifiable disease within a specified radius and a
mixture of these two.
The FCA sought to appeal some aspects of the judgment, as
did insurers Arch, Argenta, Hiscox,
MS Amlin, RSA and QBE, and the
Hiscox Action Group of policyholders.
The FCA, which has previously said it was continuing to talk
to insurers, said it welcomed the Supreme Court's decision on
Monday to grant permission for the expedited appeal. The appeal
was the "fastest way to get legal clarity" if an agreement with
insurers could not be reached, it said.
The case is being watched overseas, as companies lock horns
with insurers over pandemic-related claims in countries from
South Africa to the United States.
(Reporting by Carolyn Cohn and Kirstin Ridley; Editing by Susan
Fenton)
