A director of a group that owns several pubs has told the High Court that the situation in the industry has become far worse recently compared to March when its businesses closed due to the Covid-19 pandemic.

Director and co-owner of the Loyola pub group Stephen Cooneysaid losses suffered by his businesses, which include the Leopardstown Inn in south Dublin, are immense and will persist.

The businessman was giving evidence on the fourth day of a test case brought by four pubs, one of which is part of the Loyala group, arising out of insurer FBD’s refusal to indemnify them for losses suffered due to the pandemic.

In his evidence Mr Cooney said he “could not hide his disappointment with FBD and their reaction to their claims”, which have resulted in litigation being taken “as a last resort”.

He said his business was “hit by a wall of silence” from FBD in the weeks that followed the forced closure when they needed their support most.

In reply to his counsel, James Doherty SC, Mr Cooney said the situation that arose for his business after the enforced Government closure of pubs last March was “very harsh”.

A social media campaign before the closure order was issued called #closethepubs, which he said was supported by FBD, also had a detrimental effect on the trade.

However, there was a sense of “everybody being in this together”.

The situation was helped by measures including the Government’s wage subsidy scheme for staff and relief on business and staff members’ mortgages.

The pubs were able to reopen in late June. But circumstances are “much tougher” for pubs following the introduction of new restrictions in recent weeks.

Since reopening, the pub has traded with a reduced capacity and has observed all social distancing and Covid-19 preventative measures.

He said there has been a lot of confusion about such requirements, and many staff members were “fed up” and are considering leaving the hospitality trade.

Under cross-examination from Remy Farrell SC for FBD, Mr Cooney denied that the business had, as the insurer claimed, fallen off a cliff prior to March’s enforced closure.

While he accepted there had been a drop-off in the weekend prior to St Patrick’s Day, he said that was due to the fact that the holiday fell on a Tuesday.

In 2019 it had fallen on a Sunday, which he said was ideal for publicans.

He said the business had been doing well even up to a week before the closure when people first became concerned about Covid-19.

He also told Mr Farrell that while he was advised by a broker in relation to the detail of the FBD policy, he understood the policy covered business interruption in the event of an outbreak of disease.

He said he took that to mean something like the effects of Foot and Mouth, which caused serious disruption in Ireland or Sars [severe acute respiratory syndrome] which he said had a large impact on the hospitality trade in Hong Kong in 2003.

The actions have been taken by Dublin bars Aberken, trading as Sinnotts Bar, Hyper Trust Ltd, trading as The Leopardstown Inn, and The Inn on Hibernian Way Ltd trading as Lemon & Duke.

The fourth action is by Leinster Overview Concepts Ltd, which trades as Sean's Barin Athlone, Co Westmeath.

Breach of contract

They claim that under their policies of insurance taken out with FBD, they are entitled to have their consequential losses covered by what they claim is an insurable risk.

They also claim the insurer is in breach of contract.

The publicans claim the insurance policies taken out with FBD have a clause that states the pub owners will be indemnified if their premises are closed by order of the local or Government authority if there are “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same”.

FBD, which in April informed the pub owners that a pandemic does not fall within the scope of the clause, dispute that claim.

FBD says the closures did not occur as a result of an outbreak of disease at the premises or areas where the pubs are located.

Separately on Friday Mr Farrell said an issue over material concerning the dispute, that had appeared media that may have amounted to a possible breach of an undertaking, had been resolved between the parties

The judge welcomed the clarification.

The hearing continues next week.