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Law360, London (July 19, 2021, 11:31 AM BST) -- A chain of restaurants is suing Allianz for almost £16.4 million ($22.5 million) in losses it suffered during England's COVID-19 lockdowns, saying that a Supreme Court ruling supports its argument that the insurer is wrong to classify the restrictions as a single disaster under the policy.
The restaurant company, which owns the Italian chain Strada, has told the High Court that Allianz owes it almost £16.4 million ($22 million). (Stephen Kelly - PA Images/PA Images via Getty Images)
The restaurant business relied on the Supreme Court's ruling in a test case brought by the Financial Conduct Authority against insurers that were refusing to pay out claims under business interruption policies. Insurers argued that these policies do not cover global pandemics, or insisted that losses are limited because the pandemic is a singular continuous event.
But Various Eateries argued in its suit, which it filed on July 13 but which has now been made public, that the Supreme Court's ruling in the case supports its argument that each lockdown and each set of restrictions — for example England's introduction of the so-called tier system in autumn 2020 — are each separate events under the policy.
The restaurant chain also said these pandemic events fall into different categories in the policy it took out with Allianz. Various Eateries is claiming losses under the prevention of access clause, the enforced closure clause and the disease clause in its Allianz policy.
The company has asked the court for £15.8 million in losses linked to a drop in turnover, £520,000 for increased working costs and £30,000 in costs linked to preparing the claim.
A spokesperson for Allianz said in a joint statement with Various Eateries that the two sides are "collaborating with one another to seek judicial determination over a number of issues affecting Various Eateries' business interruption claim for Covid-19 related losses."
The spokesperson added that there are questions that were "left unresolved by the court following the test case."
Various Eateries declined to comment on Monday.
The FCA brought a High Court challenge against eight major insurers in 2020. The regulator had sought a ruling on whether policies on business interruption with controversial additional clauses would offer cover against closures brought about by the coronavirus pandemic.
The case was appealed directly to the Supreme Court in London, which ruled in January that insurers are liable in most cases, particularly when a policy offered cover for closure as a result of an outbreak of infectious disease.
The FCA has compiled claims data since then on claims for business interruption paid out by insurers. Insurers have paid out £567 million to customers in full settlements and £309 million in interim payments in the period up to July 5, the FCA said. The regulator did not say how much is outstanding.
The restaurant group is represented by Leigh-Ann Mulcahy QC and Max Evans of Fountain Court Chambers and Adam Kramer QC of 3 Verulam Buildings, instructed by Mishcon de Reya.
Allianz is represented by DAC Beachcroft. Full counsel details were not immediately available.
The case is Various Eateries Trading Ltd. v. Allianz Insurance PLC, case number CL-2021-000396 in the Commercial Court of the High Court of Justice of England and Wales.
--Additional reporting by Martin Croucher. Editing by Ed Harris.
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