FCA receives backing from Hospitality Trade Bodies

By June 1, 2020NEWS

UK’s leading hospitality bodies have issued a joint statement, strongly welcoming the FCA action and commending it to policyholders.

The FCA has today named 8 insurers it intends to join to a test case in the Commercial Court to resolve issues of liability under their policies. These include the insurers Hiscox and QBE who are two of the main insurers to the hospitality industry. A further 8 named insurers have policy wordings similar to those in the test case.

The FCA has published a timetable for the Court action which will start by 9th June, with all formal pleadings completed by 3rd July. Insurers are expected to work together to avoid duplication. The date for trial is likely to be set at a preliminary hearing shortly after 9th June and is likely to be this side of the summer holidays, particularly since the FCA will be broadening the potential list of judges by enabling a Court of Appeal judge to take the trial. FCA’s intention is that the trial should take place in July and is planning and working accordingly.

The Night Time Industries Association, UK Hospitality and the British Beer and Pub Association, who represent the vast majority of hospitality business in the UK, have jointly endorsed the FCA action, which will lead to an effective resolution of the liability issues for their members under their business interruption insurance policies, without any of the costs or risks involved in bringing their own action. The associations have also been joined by NDML, leading brokers to the hospitality industry and Black and White Hospitality, whose legal director Rob Atkinson has co-ordinated a crowd-funded action group comprising a large number of policyholders.

Michael Kill CEO of NTIA stated 

“We welcome the news from the FCA today on the progress of their action against insurers. The policies and wordings highlighted within the regulator’s proposed claim are in line with our expectations. Alongside other trade bodies, we continue to support the FCA’s initiative, to bring about a level of clarity to many struggling businesses who should have received money from insurers based on legitimate claims.”

Kate Nicholls CEO UK Hospitality stated

“We are delighted to see that the FCA has taken on board the legitimate claims of hospitality businesses against their insurers. These businesses have been hit hard by the Coronavirus and had expected their insurance policies to cover them for forced closures. It is time that insurers played fair and stopped hiding behind technicalities.”

Emma McClarkin, CEO, BBPA.

“Our member survey revealed the shocking number of businesses that have had policy claims refused or are still awaiting. The BBPA views the action being taken by the FCA as the most robust and effective means of resolving the issues across a range of insurers and policies, and therefore together with other industry bodies we support the FCA’s initiative to bring clarity for thousands of struggling businesses.”

Philip Kolvin QC

“A leading hospitality sector barrister who is advising NTIA and NDML stated: “Today’s FCA statement shows a real seriousness of intent and commitment to resolve these issues expeditiously. FCA have appointed a top-level legal team and plainly understands the dual imperatives of comprehensiveness and speed. Most importantly, their action comes without cost to policyholders. While every claimant must make their own choice about how they want to proceed, in the light of today’s announcement I can see no good reason to try to run parallel proceedings.”

Rob Atkinson Legal Director Black and White Hospitality

“The FCA says it wants to “achieve clarity for all concerned in an unprecedented situation” so we’ll watch with interest how the test cases proceed. One thing is clear: we remain resolute in our own campaign to make sure that all those in the hospitality sector who in good faith took out BI policies receive what they fully deserve”

“There has been an amazing level of support and solidarity across the sector with various trade bodies and hospitality groups all collaborating to make sure insurers honour these policies. This has included the Night Time Industries Association, UK Hospitality, BBPA, Best Western, Vine Hotels, Black and White Hospitality Management, Marco Pierre White and Oxsana Hospitality and by sticking together will mean those in hospitality, who have been badly let down by their insurers, receive the support and assistance they fully deserve.”

Simon Mabb MD NDML Insurance

“Following lots of hard work we are pleased to see that the FCA has listened to us, and that the principles and policy wordings we wanted included in the FCA court case have been taken into account and will be tested in a legal framework.  This confirms our decision to formally back these proceedings as the best option for our customers as a no-cost way to get a legal ruling.”

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