The FCA has ramped up its plan to seek a judgement on the issue of business interruption disputes by bringing a test case to the high court.
According to its announcement today – which did not disclose which insurers would feature in the case – the result of the test case will be legally binding on all parties.
The regulator’s goal is to provide “persuasive guidance” for the interpretation of similar policy wordings and claims brought to court or considered by the Financial Ombudsman Service and the FCA when both look at whether insurers are handling claims fairly.
The FCA statement said: “The coronavirus pandemic will have affected policyholders in different ways.
“The issues relevant to the intended proceedings will therefore be wide-ranging and complex.
“We recognise that the intended proceedings will better achieve our consumer protection and market integrity objectives if they cover as broad a cross section of policies and issues as is compatible with an expedited court process.”
Given the need for a “wide-ranging” sample of policies, the regulator called on policyholders with unresolved business interruption (BI) disputes to engage in the process if they want their specific issues to be involved in the test case.
It advised policyholders to submit their issues by Wednesday 20 May, as it want to bring the case to court as soon as possible.
The FCA said its legal team will be led by Paul Lewis, partner at law firm Herbert Smith Freehills, and will include a “leading counsel highly experienced in insurance issues”.
A member of one of the biggest challengers to an insurer recently, the roughly 300-strong Hiscox Action Group, recently told NS Insurance the regulator had made contact with the group – although the FCA is yet to confirm whether it will feature in the test case.
The regulator added in its statement that the test case will not prevent policyholders or groups outside of it from pursuing litigation against their insurers.