Insurer FBD does not intend to appeal a landmark High Court has ruling that four pub owners are entitled to be compensated for the disruption their businesses suffered due to the Covid-19 pandemic.

In his decision earlier this month, the outcome of which potentially affects claims made by some 1,000 Irish pubs and restaurants, Mr Justice Denis McDonald found that a policy sold by FBD covered losses the pubs sustained by having to close due to the global health emergency.

The case was briefly mentioned before Mr Justice McDonald on Wednesday, with Declan McGrath SC, for FBD, saying his client did not intend to appeal the court’s judgment.

Mr McGrath said FBD hoped that a court hearing to determine the quantum of the payouts may not be necessary, with the parties continuing to discuss a solution between themselves.

He agreed with Michael Cush SC and Eoin McCullough SC for the four pubs that, arising out of the judgment, several issues remain outstanding between the parties.

Legal costs

He further agreed with Mr Cush that, if a quantum hearing was required, not all four cases would need to be considered. As these were test actions, it may be possible than only one case may need to be considered by the court.

The court heard that certain issues remained outstanding between the parties, including what final orders the court should make in light of its findings, and what level of legal costs should be paid to the plaintiffs.

The court was asked, following a hearing later this month, to make further determinations on some or all of the particular issues where differences remain between the parties. These include what impact the judgment has regarding when the pubs were partially closed and when they were forced to close due to Covid.

The judge agreed to adjourn the matter to February 26th to hear the discrete matter where there is no agreement, but also welcomed that the sides remained in discussions on how to advance matters.

In his judgment earlier this month the judge disagreed with FBD’s interpretation of its policy. He said that cover was not lost where the closure was prompted by nationwide outbreaks of disease provided that there was an outbreak within the 25-mile radius and that outbreak was one of the causes of the closure.

The issue of quantifying the losses, the judge said, would be dealt with at a later date.

Mr Justice McDonald noted the significant implications that arose out of his decision for the parties and other pubs who have also claims, and accepted that one of all of the parties may appeal his findings.

Test cases

The four test actions were taken by Dublin bars Aberken, trading as Sinnotts Bar; Hyper Trust Ltd, trading as the Leopardstown Inn; Inn on Hibernian Way Ltd, trading as Lemon & Duke; and Leinster Overview Concepts Ltd, the owner of Sean's Bar, which is based in Athlone, Co Westmeath.

The publicans challenged FBD Insurance’s refusal to indemnify them, as well as the insurer’s stance that its policies of insurance did not cover the disruption caused to businesses by Covid-19. The dispute arose after the insurer refused to provide policyholders with cover after the pandemic resulted in the first temporary closure of businesses, in mid-March 2020.

The pub owners claimed that under their policies of insurance taken out with FBD they were entitled to have their consequential losses covered by what they claimed was an insurable risk. They also claimed that by failing to pay out on the policy the insurer was in breach of contract.

The publicans claimed the policies taken out with FBD contained a clause that stated the pubs would be indemnified if their premises were closed by order of the local or Government authority if there were “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same”.

FBD disputed the claims and argued that the closures did not occur as a result of an outbreak of disease at the premises or areas where the pubs are located. FBD also told the court that it had never provided cover for pandemics and no one in Ireland had ever asked for it.

The general insurance market in Ireland does not insure against events such as pandemics, it claimed. Only specialist foreign brokers offer an insurance policy that cover the fallout from something like Covid19, FBD also argued.