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Law360, London (September 29, 2020, 8:57 AM BST) —
The Financial Conduct Authority said on Tuesday that it has filed to appeal directly to the Supreme Court against a High Court decision on business interruption insurance if it cannot settle outstanding questions with insurers about claims linked to COVID-19.
The FCA said it filed the appeal application as a precaution in case it fails to reach agreement with the insurers that acted as defendants in the case. (AP Photo/Eric Gay)
The watchdog said it has filed a “leapfrog” appeal in the landmark test case, which concluded on Sept. 15, straight to Britain’s highest court — meaning it bypasses the normal appeals process at the High Court.
The FCA said it filed the appeal application as a precaution in case it fails to reach an agreement with the eight insurers that acted as defendants in the case over payments on claims by Wednesday. The regulator said that seven of the insurers had filed similar precautionary appeals.
The test case was heard to determine whether as many as 370,000 companies forced to close during the first COVID-19 pandemic lockdown in March will be able to claim on their business interruption policies. The ruling went largely in favor of policyholders, meaning that several insurers will have to pay out if they do not appeal.
The regulator told insurers on Sept. 21 to settle claims quickly if they did not intend to appeal the judgment. Policyholders represented by the Hiscox Action Group said on Thursday that more businesses would go under if the City regulator did not push insurers to pay out speedily.
“The FCA therefore continues to work closely and at speed with the eight insurers and two intervenors that participated in the test case to reach an agreement in principle on a range of issues whereby an appeal process would not be required, and payments would be made on eligible claims as soon as possible,” the FCA said on Tuesday.
“Positive discussions continue with all parties,” the watchdog added.
Monday was the deadline to appeal the judgment. A spokesperson for Hiscox said it and other insurers had filed for appeal to allow them to avoid missing the “statutory deadline.”
“Hiscox has not yet made a decision on whether it will seek to appeal,” the insurer added.
–Editing by Ed Harris.
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