Commercial Court decides in favour of Policyholders on Prevention of Access Clauses

25 February, 2022

In the FCA v Arch test case, [2020] EWHC 2448 (Comm), Flaux LJ and Butcher J (sitting as a two judge Financial List court) ruled on the scope and application of prevention of access clauses to business interruption losses caused by Regulations passed to combat the Covid-19 pandemic. Almost all of their rulings were unfavourable to policyholders and beneficial to insurers. The FCA did not seek to appeal these adverse rulings to the Supreme Court.

In a judgment handed down on 25 February 2022, Cockerill J upheld the claims of the operators of the Wolseley, Delaunay, and other restaurants against Axa Insurance UK PLC.  She decided that the analysis of the Supreme Court on causation in the context of disease clauses substantially undermined the reasoning of Flaux LJ and Butcher J on prevention of access clauses.

Additionally, the judgment provides consideration of the application of policy limits in cases where there are multiple assureds and numerous premises affected by lockdown Regulations. Cockerill J decided that there was a separate policy limit for each assured and premises affected.

This decision will be of particular interest to policyholders who have suffered serious losses as a result of the Covid-19 pandemic and have seen their claims denied by insurance companies.

Jeffrey Gruder QC represented Corbin and King Limited and other Claimant companies, instructed by Roger Franklin of Edwin Coe LLP.

Read the full judgment here.