Covid in the Courts: The FBD Test Case

Date01 January 2021
COVID in the Courts: the FBD Test Case
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.

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