Business in the pub sector was “falling off a cliff” before the Government ordered the closure of venues across Ireland, the Commercial Court has heard.
Four pubs, including Dublin bar Lemon & Duke - which is co-owned by rugby stars Jamie Heaslip, Sean O’Brien, brothers Rob and Dave Kearney and managing director Noel Anderson - are suing FBD Insurance over its refusal to pay compensation for losses incurred by the Covid pandemic.
Day three of the hearing has so far heard FBD argue that the four bars would have suffered huge losses even if they were allowed to remain open.
Declan McGrath, senior counsel for FBD, said if there had been no imposed closure, there would never have been a claim on the policy, “no matter the scale of the losses suffered by the insured”.
Sinnotts bar, Sean’s Bar, The Leopardstown Inn and Lemon & Duke believe their policies entitle them to recover all losses related to coronavirus, not just the forced closure.
“When we look at the evidence of Mark Lewis, one of the experts the defence will call, he references Sweden and demonstrates how in Sweden, even though there was never an imposed closure, they suffered a huge loss in business because of the mere fact that the virus was circulating widely in the country,” Mr McGrath said.
“If one of these pubs had been in Sweden, they couldn’t have possibly brought a claim under the policy.”
Evidence from Open Table, a real-time online booking site, showed there was a 75pc drop in diners on March 15 compared to the same period last year, Mr McGrath added.
“This is despite there being no imposed closure until the end of that day.”
He said he would address the case of Lemon & Duke specifically, which he described as very “evidence-based”, at a later date.
Lemon & Duke is arguing that FBD misrepresented the cover that would be provided before it took out a policy.
A side letter was furnished to Mr Anderson from FBD employee Paul Shanahan on March 2 stating the policy would provide cover for coronavirus if the venue had to forcibly shut down.
On April 15, on receipt of legal advice, FBD said it was withdrawing the representation that the business interruption section of the policy contains an indemnity in respect of consequential loss arising from the coronavirus epidemic.
The pubs are arguing their policies have a clause which states they were to be indemnified if their premises were closed by order of a local authority or Government if there are “outbreaks of a contagious or infectious disease on the premises or within 25 miles of same”.
It is FBD’s position that the closure of bars was not due to an outbreak of Covid on the premises or within 25 miles, but because of the “national situation”.
Mr McGrath today gave the example of a bus load of tourists arriving in Killarney and a pub in the vicinity having to close due to an outbreak.
He said the policy could be triggered in that case on the basis you have an occurrence and an imposed closure following.
“But that is completely different to saying I’ve a pub on the Aran Islands and I’m forced to close as cases are rising in Dublin and there was one case on the Aran Islands months ago”.
Earlier in the hearing, FBD said it would not be pursuing a contempt of court application after it alleged yesterday that documents from the pre-trial process had been leaked to the media.
Yesterday counsel for FBD said that no business in Ireland has ever asked for pandemic cover, nor has FBD ever provided it.
Judge McDonald pointed out that The Inn on Hibernian Way, trading as Lemon & Duke, had indeed sought it.
“Mr Anderson can be complimented for his foresight, but it was foresight which arose after the commencement of the pandemic. It was after events in China and Europe, when he was seen what was happening around the world, that he asked about the cover,” Mr McGrath said.
The hearing continues.