Lemon & Duke and insurer FBD fail to resolve Covid closure row

Mediation has failed to resolve a dispute between a Dublin pub and insurer FBD over whether FBD must pay for losses of pubs closed as a result of the coronavirus lockdown, the Commercial Court has heard.

As a result, an action by the Lemon & Duke pub will be one of four test cases, to be heard in October, with implications for more than 1,000 pubs concerning insurance liability.

The company is backed by former and current rugby players Jamie Heaslip, Rob Kearney, Dave Kearney and Sean O'Brien. Noel Anderson is the pub's managing director

Other publicans with similar insurance cover are waiting to see the outcome of the test actions.

The three other test cases are by the operators of Sinnotts pub and Leopardstown Inn in Dublin and Sean's Bar in Athlone.

On Monday, Michael Cush SC, for all the applicants other than Sean’s Bar, told Mr Justice David Barniville that a mediation process involving the Lemon & Duke had not been successful and it sought to proceed as one of the test cases.

Lemon & Duke, of Hibernian Way, Dawson Street, Dublin, is seeking an order directing FBD to indemnify it for consequential and ongoing losses arising out of the enforced closure of the bar on March 15th last as a result of coronavirus.

It is also seeking damages on grounds including alleged negligence, breach of duty and breach of contract.

Paul Gallagher SC, for FBD, previously said the issues to be determined in the actions were ones of interpretation, including whether there was “an insured peril”, as well as “causation issues” and the extent of any indemnity.

The issue of what amount might be involved in damages could be left to a later hearing, he said.

The cases are by corporate entities that trade under pub names.

They are: Aberkent (Sinnotts, of King Street, Dublin); Hyper Trust (the Leopardstown Inn, Stillorgan, Dublin); Inn on Hibernian Way (Lemon & Duke, Duke Lane, Dublin); and Leinster Overview Concepts (Sean's Bar, Athlone, Co Westmeath).

Closure costs

The Leopardstown Inn has said its closure was costing about €56,000 a week, based on weekly turnover of €80,000 and cost of sales of about 30 per cent. The pub has been availing of the Covid-19 wage subsidy scheme since March 26th to keep as many of its 70 employees as possible on the payroll. The pub is part of the Loyala Group.

Other group companies in dispute with FBD operate the Bath Pub and the Old Spot, both on Bath Avenue, Dublin 4, the Landmark pub, Dublin, and Baker’s Corner, Rochestown Avenue, Dublin.

The value of the cover for consequential loss for the companies is €7.45 million, it is claimed.

Sinnotts said it was suffering a financial impact of about €30,253 a week, calculated on the basis of gross sales less VAT. Similar claims are made by other group pubs – the Submarine Bar, the Black Lion, the Marble Arch, the Barclay Club, Graingers, Club Lapello, and the Capitol Lounge.

The Lemon & Duke estimated it would have lost €770,960 by August 10th, when pubs are to reopen. The operator of Sean’s Bar said the total amount insured under its policy was €1.4 million.