Following discussions with the Financial Conduct Authority, the Night Time Industries Association & NDML have decided to throw their full weight behind the FCA’s proposed action against insurers.
The FCA has confirmed that it intends to start claims against insurers in the very near future so as to get court rulings on insurers’ liabilities under business interruption clauses, and is working towards getting the case to court before the summer. The court action is expected to resolve the main reasons for denials of liability.
Night Time Industry Association CEO Michael Kill states that the key benefits of the FCA action are that it is quick, will cost NTIA members nothing and will produce authoritative rulings.
NTIA is not advising their claimants to bring parallel arbitration claims. He said: “Everyone must be free to make their own choice. But our view is that there is no good reason for small businesses to get involved in costly legal proceedings when the issues are being addressed rapidly and professionally by the Financial Services Regulator, it makes no sense to us. We have explored the potential costs of arbitration ourselves, and we were deeply concerned about asking small businesses to tie themselves to a financial commitment that could possibly see large amounts of potential winnings swallowed by fees. That is why we are grateful to the FCA for stepping in, and we will continue to work with them as they progress this claim.
Philip Kolvin QC is a leading leisure sector barrister, who has been advising NTIA and NDML on a pro bono basis. He said: “Hiscox claimants deciding whether to join an arbitration or to await the outcome of the FCA claim should consider timing, efficacy and cost. Arbitration will not be quicker than the FCA claim. It can’t be more efficacious because the arbitrator will simply follow rulings on policy wordings by the judge in the FCA claim. Most importantly, an arbitration claimant will probably end up giving between a third and a half of their winnings to litigation funders and lawyers, while the FCA claim is free to claimants. The FCA is the national regulator, has hired a top legal team, is working with the NTIA and others to ensure the right issues are litigated and is getting on with it for the benefit of policy-holders as a whole. Claimants must make their own decisions. But I cannot think of any reason why a claimant would not just thank their lucky stars for the FCA and work with it to achieve the right result..”
Simon Mabb, NDML statement – ‘we know policyholders are desperate to see a result but the action taken by the FCA should be welcomed and we recommend policyholders give them the opportunity to get this right and the clarity on any potential payout’.
‘We are working closely with the NTIA and Philip Kolvin QC to ensure the voices of members and policyholders are heard. The thought of policyholders losing a large percentage of any settlement when there is a free process being run by the FCA would be very painful to see when they need all the money they can get right now’.
The NTIA/NDML & Philip Kolvin QC has been working closely with the FCA to ensure that they have a range of policies which have been communicated not only by members but by the wider hospitality sector.
The FCA has agreed to take part in an NTIA / NDML Webinar on Wednesday 3rd June at 10.00 am to answer questions from claimants within the group on the process and current position of the Business Interruption Insurance Claims moving forward.