Judge happy to make orders dealing with pub Covid-19 business disruption cover cases

High Court reporters

The High Court has indicated its approval of orders proposed by insurer FBD and two pub operators in relation to quantifying two pubs’ losses caused by Covid-19's disruption to business.

The planned orders, which deal in detail with various factors affecting the level of losses sustained, will have a bearing on about 1,000 Irish pubs and restaurants holding FBD policies.

Draft suggested orders were submitted to the court after pub operators Aberken and Hyper Trust, represented by Michael Cush SC and James Doherty SC, agreed last November to settle the outstanding issues in their claims against the insurer over its failure to pay out for Covid-19 losses.

Aberken trades as Sinnott’s Bar in Dublin, while Hyper Trust trades as the Leopardstown Inn.

Activation of the intended settlement was contingent on the court being satisfied the orders, agreed between FBD and the pubs, were appropriate.

On Wednesday, Mr Justice Denis McDonald said he had fully reviewed the materials before the court and was satisfied to make orders in the terms agreed between the parties.

Insurance policies

He agreed with submissions made by Declan McGrath SC, for FBD, relating to the construction of the insurance policies.

He said it was not appropriate for him to express a view on FBD’s other point regarding subrogation, which refers to an insurer’s right, after paying out on a claim, to request reimbursement from an at-fault party.

The judge said he has not yet written what is “likely to be quite a lengthy judgment” explaining his reasoning for finding the orders to be appropriate. He expects to deliver this in June.

Mr Justice McDonald ruled in 2021 that a policy sold by FBD covered losses pubs suffered when they were forced to close during portions of the pandemic.

The judge said insurance cover is not lost when the closure is prompted by nationwide outbreaks of disease so long as an outbreak is within a 25-mile radius of the premises and is one of the causes of the closure.

The judgment came in the test actions brought by Aberken, Hyper Trust, Inn on Hibernian Way Ltd, trading as the Lemon & Duke in Dublin, and Leinster Overview Concepts Ltd, which owns Sean’s Bar in Athlone, Co Westmeath. Inn on Hibernian Way and Leinster Overview Concepts settled outstanding issues in their claims against FBD last November.

The four pub operators challenged FBD’s refusal to indemnify them and its claim the policies did not cover disruption caused by the pandemic.