Case notes - Covid in the Courts: The FBD Test Case

• Author: James McGovern
• Pages: pp 145 - 155
• Published date: 12 January 2022
• Date: 12 January 2022

145

COVID in the Courts: the FBD Test Case

JAMES MCGOVERN*

I. Introduction

It is not oen during leader’s questions in Leinster House (or the Convention

Centre in these times) that the Tánaiste and Finance spokesperson of the main

opposition party have heated exchanges over complex insurance litigation matters

centring on a judgment that contains extensive discussion of causation treatises

penned by H.L.A. Hart and Tony Honoré.1 But, so opened leader’s questions on

11 February 2021, a number of days aer the delivery of the judgment in Hyper

Trust Limited t/a e Leopardstown Inn and Ors v FBD Insurance plc (‘FBD’)2

by the High Court (the ‘FBD Test Case ’). e political exchange itself involved

the reading out of a once rarely-activated section of an insurance policy and a

dispute as to the powers of the Central Bank of Ireland (‘CBI’) as regulator of

the Irish insurance market. Praised by the opposition was the approach of the UK

regulator, the Financial Conduct Authority (the ‘FCA’), which had taken a test

case to the High Court of England and Wales,3 followed by a leapfrog appeal to

the UK Supreme Court,4 in order to determine whether business interruption

insurance taken out by UK-based policyholders would cover nancial losses caused

by the COVID-19 pandemic (the ‘FCA Test Case’). Whereas the FCA had tested

a representative sample of policy wordings across a number of insurers in its test

case, the CBI, lacking the regulatory power to bring such test cases, set out a more

piecemeal approach in its supervisory framework (the ‘Supervisory Framework’).

e CBI encouraged test cases against individual insurers and made known its

expectation that insurers pay the reasonable costs of both parties to the case.5

Once the court had set out its position on a given policy, it would be expected that

insurers then pay out (or not pay out, as the case may be) to all policyholders who

had business interruption insurance under that policy.

Naturally, in Ireland, there are many dierent business interruption insurance

policies, each containing its own unique wording. As a result, a number will

ultimately lead to payments to the policyholders, as happened in the FBD Test

* B.A. (Dubl.), LL.M Candidate (Northumbria), Traine e Solicitor. Any views or opinions expressed

in this article are the personal views and opinions of the author.

1 Dáil Deb 11 February 2021, vol 1004.

2 [2021] IEHC 78.

3 e Financial Conduct Authority v Arch and Others [2020] EWHC 2448 (Comm).

4 e Financial Conduct Authority v Arch and Others [2021] UKSC 1.

5 Central Bank of Ireland, Business Interruption Insurance Supervisory Framework (2020) 6.