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FCA business interruption test case

Update following the second case management conference on 26 June 2020

Update following the second case management conference on 26 June 2020

The second case management conference (“CMC”) in the Financial Conduct Authority’s (“FCA”) highly anticipated business interruption test case was heard remotely (and live streamed) before Lord Justice Flaux and Mr Justice Butcher.

The court had to deal with an extensive agenda, which included various applications for permission to rely on factual and expert evidence, along with applications from non-parties to intervene in the case pursuant to the provisions of the Financial Markets Test Case Scheme.

The headline points from the second CMC are:

  • The Court received three applications from non-parties to intervene in proceedings.
    • Separate applications submitted on behalf of the Hiscox Action Group (“HAG”) and the Hospitality Insurance Group Action (“HIGA”) were both granted. Whilst the Court had no doubt that the FCA would advance the majority of the points relevant to these two groups of policyholders, it accepted it was important to ensure that all relevant arguments were put before the court. Permission was granted on the condition that oral submissions and skeleton arguments submitted by the interveners are to supplement the FCA’s submission and should avoid duplication.
    • An application filed on behalf of an individual RSA policyholder was denied on the basis that the policy in question did not fall within the scope of the test case.
  • The court refused an application from RSA to adduce factual evidence which would have added further policy wordings in to the mix (to evidence alternative wordings that it says were available to policyholders). The refusal to grant permission provides a clear indication from the court that it is determined to restrain attempts to further extend the scope of the case, in light of what is already a challenging timetable.
  • The court refused the FCA’s application to rely on expert evidence concerning the extent to which certain specified diseases included within a policy being considered were likely to cause a widespread outbreak across the UK in modern times. The court held that such evidence (created post contract) was inadmissible for the purposes of analysing the construction of the relevant policy term.
  • The court heard lengthy debate regarding the FCA’s reliance on the Cambridge analysis data as to the prevalence of Covid-19 and its incidence in the vicinity of policyholders’ premises.
    • The FCA was granted permission to amend its particulars of claim and the court confirmed that it would be open to hearing arguments limited to whether such evidence would be sufficient, as a matter of principle, to discharge the burden of proof placed on a policyholder if it was assumed that the Cambridge analysis was the best evidence available.
    • The court will revisit the potential for a second trial to separately consider the issue of prevalence in seven days’ time, following written submissions. Lord Justice Flaux indicated that a second trial, if so desired by the FCA, could take place in early September to allow insurers time to find and instruct their own experts on this issue.
  • The Court also dealt with various procedural directions in preparation for the trial which is to be heard by Lord Justice Faux and Mr Justice Butcher for eight days from 20 July 2020.

We will continue to keep you apprised of further developments as the test case approaches trial.

For any further information or to discuss the above in more detail please contact Pamela Freeland, Associate on 0151 305 8932 or via email at or Sarah Irwin, Solicitor on 0151 305 8950 or email at

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