Date yet to be fixed for determining FBD payouts in business interruption case

A hearing date has yet to be fixed to determine how much FBD must pay out to four pubs for business disruption caused by Covid-19.

Mr Justice Denis McDonald said on Friday he hoped, during a case management hearing in early April, to be able to fix a hearing date.

In a decision earlier this month with implications for similar claims by some 1,000 Irish pubs and restaurants, the judge found that a policy sold by FBD covered losses pubs sustained by having to close due to the pandemic.

The issue of quantifying the losses will be dealt with at a later date.

When the matter came before Mr Justice McDonald on Friday, he fixed a timetable for the pubs to submit financial information to FBD.

The judge noted that discussions are taking place between the parties to see if only one out of the four test cases brought before the court should proceed to a hearing on quantum.

While he was not sure when a date could be fixed to hear that aspect of the claim, he was hopeful a date could be fixed when the matter returns before the High Court in mid-April.

The four test actions were taken by Dublin bars Aberken, trading as Sinnotts Bar; Hyper Trust Ltd, trading as 'The Leopardstown Inn' and 'Inn on Hibernian Way' Ltd trading as Lemon & Duke.

The fourth action was taken by Leinster Overview Concepts Ltd, the owner of Sean's Bar, based in Athlone, Co Westmeath.

Differences between parties

Also, on Friday the court heard submissions on issues arising from the judgment, where differences remain between the parties.

The court invited the parties’ submissions on matters including the proper interpretation to be applied to the term ‘closure’ within FBD’s Public House Policy of insurance, which is relevant to quantifying the losses.

The publicans, represented by James Doherty SC, Michael Cush SC and Kelley Smith SC argued the correct interpretation of the policy did not require the pubs to be fully closed in order for them to be covered.

They also claim the policy also indemnifies them during the periods when the pubs were partially closed or limited in what trade they could do while various government restrictions were in place.

In reply, Caron Geoghegan BL, for FBD, said the court should interpret the section of the policy differently from the publicans.

Counsel said the language contained in the policy clearly refers to the period when the plaintiffs’ businesses were “completely closed,” and not partially closed, and when certain pubs were carrying on some trade on their premises.

The publicans are also seeking that the legal fees they incurred are paid on an enhanced solicitor-client basis.

They claim they had to engage in these test actions from which FBD has gained the benefit of a decision with very wide implications for the insurer and its clients.

If they were awarded costs on a lower scale, the pubs say they would be left in a less advantageous position than policy holders who did not take part in the test cases, which they say is not a fair outcome.

Costs

FBD argues that the fact the cases were test actions was not a reason for the court to award costs against it on the enhanced scale. Counsel said that before the trial started FBD agreed to make a contribution towards the plaintiffs’ legal costs.

The judge reserved his decision on the various issues raised and said he hoped to rule on them in mid-April.

In his judgement earlier this month. the judge disagreed with FBD’s interpretation of its policy.

He said that cover is not lost where the closure is prompted by nationwide outbreaks of disease provided there is an outbreak within the 25-mile radius and that outbreak is one of the causes of the closure.

The publicans challenged FBD Insurance plc’s refusal to indemnify them, as well as the insurer’s claim its policies did not cover the disruption caused by Covid-19.