Reinsurance News

FCA uses leapfrog application to appeal to Supreme Court

30th September 2020 - Author: Katie Baker

Recently, the UK’s High Court passed its judgement on the Financial Conduct Authority’s (FCA) business interruption (BI) insurance test case. After ruling in favour of policyholders on the majority of key issues, the FCA has filed a ‘leapfrog’ application to appeal to the Supreme Court.

financial-conduct-authority-logoThe result of the case means that UK insurers will have to pay out on the majority of denied claims due to the COVID-19 pandemic.

Among the key points of the ruling, the court decided that most of the disease clauses provide cover for losses connected to COVID-19.

The test case also clarified that the COVID-19 pandemic and the government and public response were a single cause of the covered loss, which is a key requirement for claims to be paid even if the policy provides cover.

Although the FCA believes that the initial judgment was clear when it was handed down on 15 September, it will continue to work with the eight insurers and two intervenors that participated in the test case.


The leapfrog application has been made in order to reach an agreement in principle on a range of issues whereby an appeal process would not be required, whilst also exploring whether payments would be made on eligible claims as soon as possible.

The application has been filed on a precautionary basis in the event that this agreement is not reached by close of business Wednesday. The FCA understands that seven insurer parties have made similar precautionary applications.

It’s been estimated that around 370,000 small businesses have affected by the outcome of the court case, with analysts estimating that between £3.7 billion and £7.4 billion of claims could be on the line.

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