Why Covid insurance ruling may mean more pain for small firms

Linda J. Dodson

Pulman’s lawyers, Mishcon de Reya, believe his claim is one of thousands that should now be paid following the decision. But for many businesses Tuesday’s complex 162-page judgment will not be the end of the matter. 

“It’s not all unbridled joy [for small businesses],” says Ravi Nayer, an insurance lawyer at Brown Rudnick. 

Parts of the ruling may be appealed either by the eight defendant insurers or by the Financial Conduct Authority (FCA) on behalf of policyholders. 

Sonia Campbell, a partner at Mishcon de Reya who is representing a group of hospitality businesses seeking payouts, says: “We do anticipate that insurers will apply for permission to appeal but we hope they will do the right thing and now start paying claims.” 

Any appeal is likely to “leapfrog” the Court of Appeal and go directly to the Supreme Court. This would accelerate the process but could still take until December or January to resolve, leaving businesses facing uncertainty. 

Chris Woolard, interim FCA chief executive, is calling on insurers to progress claims irrespective of possible appeals. Industry bosses say this is abnormal as it would be difficult for insurers to recover money paid out if they subsequently win their appeal. 

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