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'FBD's reasoning is wrong and makes no sense' - pubs begin legal action against insurer over Covid claims


Jamie Heaslip (L) and Noel Anderson (R), co-owners of Lemon & Duke, at the Four Courts on the first day of their High Court action PIC: Collins Courts

Jamie Heaslip (L) and Noel Anderson (R), co-owners of Lemon & Duke, at the Four Courts on the first day of their High Court action PIC: Collins Courts

Jamie Heaslip (L) and Noel Anderson (R), co-owners of Lemon & Duke, at the Four Courts on the first day of their High Court action PIC: Collins Courts

The future of thousands of businesses depends on the outcome of a legal action by four pubs against FBD Insurance over its refusal to pay out compensation to policyholders during the Covid pandemic, the Commercial Court heard today.

Dublin pubs Sinnotts, Lemon & Duke and The Leopardstown Inn, and Athlone-based Sean’s Bar have begun their case against the insurer.

FBD is arguing it should not have to payout as, in its view, the policy only covered local outbreaks of a disease and not a pandemic.

The insurer also believes it should not have to cover all losses related to Covid-19. FBD’s position is 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”.

In his opening statement, Michael Cush, senior counsel for the three Dublin bars, described FBD’s reasoning as “plainly wrong”.

“It makes no sense,” he said.

Mr Cush highlighted how 1,100 bars and restaurants were insured with FBD and have policies identical to those involved in the case.

He said the outcome will have a significant impact on the future of those businesses and may be the difference in them remaining open or shutting forever.

Mr Cush cited how the decision will also influence cases involving other businesses and insurers.

During the hearing he referred to documents issued by FBD which stated businesses would be covered by disease and said there was nothing in the exclusion section of the policy to suggest otherwise.

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“Their own document therefore runs entirely counter to the argument they are advancing to you in this court,” Mr Cush said.

FBD’s stance was implying that the “more widespread the peril”, the less the onus was on them to provide cover, he added.

The plaintiffs also claim that FBD is in breach of contract.

Mr Justice Denis McDonald was asked to rule on the admissibility of evidence which relates to post-contract discussions contained in the witness statement of Stephen Cooney, co-owner of The Leopardstown Inn.

Declan McGrath, a senior barrister representing FBD, said such evidence wasn’t relevant and would only end up lengthening the trial, which is currently expected to last 20 days.

“The type of evidence Mr Cush wants to introduce is ‘X rings up Y in FBD and says is there cover under the policy and Y says well I think that there is’.

“How is that relevant, it is simply not admissible at all and doesn’t point to business efficacy,” he said.

Mr McGrath argued that post-contract communications are not relevant to the construction of a contract and therefore will contribute nothing to the case.

Mr Justice McDonald asked to privately review the statement of Stephen Cooney overnight before deciding whether the evidence should be allowed.

The publicans said their policies have a clause which explicitly stated they will be indemnified if they are ordered to close their premises by a local authority or the Government if there is “an outbreak of a contagious or infectious disease on the premises or within 25 miles”.

Mr Cush alluded to a recent High Court decision in the UK where it was ruled that the pandemic should result in pay-outs to holders of business interruption policies.

The UK’s Financial Conduct Authority (FCA) brought the case on behalf of policyholders across the country.

This decision is currently being appealed to the Supreme Court.

Counsel for the pubs in the FBD case referred to a Features and Benefits document which provided a summary of the cover provided under the insurer’s public house policy.

Disease is also mentioned in the consequential loss section of that document, Mr Cush added.

One of the bars involved, Inn on Hibernian Way trading as Lemon & Duke is co-owned by Noel Anderson and Ireland rugby stars Sean O'Brien, Rob and Dave Kearney and Jamie Heaslip.

The hearing continues.

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