Football clubs step up BI court case against insurers

The twenty claimants (see list) are pursuing the legal claim against Allianz, Aviva, CNA, Liberty Mutual, MS Amlin and Zurich.

The Particulars of Claim filing by Clifford Chance representing the clubs detailed that the claimants contend they suffered multiple losses but that “the defendants are understood to deny this and argue there was only one relevant single business interruption loss”.

So far the defendants have only been prepared to make interim payments of £2.5m plus any additional increased cost of working and/or claims preparation costs, the document detailed.

Many of the claimants are linked by name. The filing added that the payments had been made “only in respect of each football club with which one or more claimants is associated rather than to each claimant separately”.

The legal filing confirmed that if the case succeeded the clubs would try and resolve the issues of proof of losses and quantification by agreement. It did not set out detailed particulars in relation to quantum and reserved the right to do so in due course.

Wording

The insurance policies were on Marsh/Resilience wording.

According to the filing the insurers had initially refused to pay out but had admitted cover existed in principle after the ruling in the first round of the Financial Conduct Authority’s legal test case.

The document argued that relevant covered events included, for example, decisions of sports bodies, as distinct from governmental bodies or public authorities, to suspend the playing of football matches in particular competitions or to require matches in those competitions to be played without spectators in attendance or subject to other restrictions.

Timeline

The timeline provided included the decisions on 13 March 2020 of the Premier League and the Football Association to suspend matches and that of the Union of European Football Associations on 17 March.

The Prime Minister announced the lockdown in the UK on 23 March. Among further details the legal document continued that the Premier League announced on 28 May that the season would restart on 17 June but behind closed doors.

On 29 May the FA confirmed plans to restart the FA Cup on 27 June but again with matches played behind closed doors.

UEFA’s Champions League and Europa League restarts were also initially behind closed doors with a partial return of spectators from 1 October capped at the lower of 30% of the relevant stadium’s capacity or any limit set by local authorities.

Easing

The legal team also flagged that after the 4 July lockdown easing began with pubs, restaurants, bars and cafés permitted to re-open there were still restrictions on gatherings of more than 30 people which interrupted or interfered with business.

The claim for indemnity is being made under the notifiable disease and enforced closure clauses with limits of £2.5m and the hindrance of use clause which has a limit of £500,000.

“Each claimant suffered a separate single business interruption loss for each of the events” in the full timeline, the document reported.

Along with the claim for reduction in turnover, increased costs of working, claims preparation and contractual penalties the defendants are also seeking interest payments, costs and “further or other relief as the court thinks fit”.

Series

The case is the latest in a series that include challenging the definition of single occurrence after the Supreme Court’s January 2021 ruling in the FCA test case.

Dirty Martini cocktail chain owner CG Restaurant is embroiled in a legal wrangle with QIC Europe at the High Court in London seeking £4.03m for losses from three shutdowns during the coronavirus pandemic.

Stonegate’s £1bn court claim against MS Amlin, Liberty Mutual and Zurich deals with multiple locations and also the argument from the UK’s biggest pub group of whether cover has been triggered multiple times.

In March Axa opted not be appeal the High Court ruling in the Corbin & King case which ordered the insurer to make multiple payouts under a non-damage denial of access clause. It had included arguments over multiple premises but also for the cover to respond on three occasions when forced to close in the pandemic. The bill is expected to total £4.4m.

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