Two publicans settle court actions against FBD over pandemic insurance claims

All of the outstanding issues between two of the four publicans that brought High Court actions over FBD’s failure to pay out on business disruption claims caused by Covid-19 have been settled.

On Friday the High Court was told that the other two test actions brought by bar owners Aberken, trading as Sinnott’s Bar, and Hyper Trust Ltd, trading as The Leopardstown Inn, had been settled.

Mr Justice Denis McDonald had held in a judgment last year, in a decision that had implications for more than 100 bars and restaurants, that a policy sold by FBD covered losses which pubs sustained by having to close due to the pandemic.

Arising out of the court’s findings, several issues, largely centred on the quantum of losses that are to be paid to the publicans by FBD, remained outstanding.

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Michael Cush SC appearing with James Doherty SC for Aberken and Hyper Trust told the court that those issues had been resolved following extensive and detailed out-of-court talks between the parties.

The court is now considering submissions from Declan McGrath SC for FBD.

Arising out of the settlement agreement, the insurer is seeking certain clarifications and declarations from the court regarding legal principles that arose in the case.

FBD has asked the court for the reliefs because of the wider implications involved in the test cases given that the outcome of the test actions has implications for hundreds of other pubs and restaurants that had taken out business disruption cover with the insurer.

In his submissions counsel said one of the issues the court had been asked to consider was the subsidies paid by the State to businesses like pubs that were forced to close as a result of the pandemic.

Mr Justice McDonald, who congratulated the parties for resolving what were complex legal matters, welcomed the settlement.

The hearing of FBD’s bid for the various reliefs continues next week.

The other two pub owners which had also taken test actions against FBD – Inn on Hibernian Way Ltd trading as Lemon & Duke, and Leinster Overview Concepts Ltd, the owner of Sean’s Bar, in Athlone, Co Westmeath – had earlier resolved the majority of their outstanding claims against FBD.

The only matter remaining between those two entities and FBD concerns the legal costs of the action.

In his main judgment last year, Mr Justice McDonald disagreed with FBD’s interpretation of its business disruption policy regarding Covid-19 and ruled in favour of the four publicans.

The pub owners had challenged FBD’s refusal to indemnify them, as well as the insurer’s claim that its policies did not cover the disruption caused by Covid-19.

The publicans claimed that under their policies of insurance they were entitled to have their consequential losses covered by the insurer.

FBD claimed the policies contained a clause that states the pubs will be indemnified if their premises were closed by order of the local or government authority if there are “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same”.

The judge said that cover was not lost in such circumstances.