Corbin & King Ltd v AXA Insurance UK Plc
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Cockerill |
| Judgment Date | 25 February 2022 |
| Neutral Citation | [2022] EWHC 409 (Comm) |
| Docket Number | Case No: CL-2021-000235 |
| Court | Queen's Bench Division (Commercial Court) |
[2022] EWHC 409 (Comm)
Mrs Justice Cockerill
Case No: CL-2021-000235
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
Jeffrey Gruder QC (instructed by Edwin Coe LLP) for the Claimants
Aidan Christie QC and Miles Harris (instructed by DAC Beachcroft) for the Defendant
Hearing dates: 25, 26 January 2022
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic
This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to Bailii and The National Archives. The date and time for hand-down is deemed to be Friday 25 February 2022 at 10:00am.
| (A) INTRODUCTION | 3 |
| (B) BACKGROUND | 4 |
| (i) Factual Background | 4 |
| (1) The Policy | 4 |
| (2) COVID-19 Pandemic and Associated Restrictions | 6 |
| (3) The Claim under the Policy | 13 |
| (ii) Legal Background | 13 |
| (1) FCA v Arch – Divisional Court | 13 |
| (2) FCA v Arch — Supreme Court | 21 |
| (3) Subsequent Decisions | 24 |
| (4) Composite Policies | 27 |
| (C) The Issues | 28 |
| (D) Standing of Claimants 1, 4, 6, 8 and 11 | 28 |
| (E) Coverage Issue | 29 |
| (1) Claimants' Submissions | 30 |
| (2) Defendant's Submissions | 31 |
| (3) Discussion | 32 |
| The relevance of the Divisional Court's judgment | 32 |
| (F) The Quantum Issue | 48 |
| (1) The Claimants' Submissions | 49 |
| (2) Axa's Submissions | 50 |
| (3) Discussion | 50 |
(A) INTRODUCTION
This case concerns the scope of cover provided by a Denial of Access (Non Damage) (“ NDDA”) clause in a combined business insurance policy issued by the Defendant insurer pursuant to a “Business Combined Insurance policy” which commenced on 12 November 2019 and expired on 11 November 2020 (“ the Policy”).
The Policy was issued to the Claimants, the owners and operators of a number of well-known restaurants, cafes and other establishments in and around London.
The two key issues in the case are:
i) Whether the NDDA clause provided effective cover for loss resulting from restrictions on access to the Claimants' premises under government regulations passed in response to the COVID-19 pandemic in the course of 2020 (“ the Coverage Issue”).
ii) Whether, if the NDDA clause did provide cover, there was a single limit of £250,000 in respect of all premises for any one claim, or whether there was a limit of £250,000 for each set of premises (“ the Quantum Issue”).
The claim thus concerns COVID business interruption insurance, and was entered on this Court's COVID BI list. Determination of these issues has been expedited in the light of the fact that it appears that the issues in this case affect not just these litigants but a considerable range of other businesses, and that a number of disputes may well be short circuited by an early determination of the issues.
In particular the solicitors instructed for the Claimants represent a number of other parties with materially identical NDDA wordings, and produced evidence of a significant number of other parties, both those who had already obtained legal representation and those who had not, who were in a similar position. All of those parties indicated that they were prepared to await the outcome of an expedited hearing and would not wish to make separate representations on the issues.
As will be set out below, the parties' submissions on the Coverage Issue turn in significant part on analysis of the reasoning of the Divisional Court and the Supreme Court in The Financial Conduct Authority v Arch Insurance (UK) Limited and others [2020] EWHC 2448 and [2021] UKSC 1 (“ Arch”).
The court is not being asked to determine loss adjustment issues, which will be addressed by the parties if the Claimants succeed in this action.
(B) BACKGROUND
(i) Factual Background
(1) The Policy
The Policy was issued on 7 February 2020, with the period of insurance stated to be from 12 November 2019 to 11 November 2020. The Policy is made up of two documents: the Schedule and the Full Policy Wording.
The Schedule is subtitled “Your Business Combined Insurance Policy”. Under “Your details” on the first page of the Schedule, “The insured” is stated to be “Corbin & King Limited & Subsidiaries”. The Claimants' names are found on the second page of the Schedule under the heading “Additional policy information” and the sub-heading “Full Client Name”. They are set out as follows:
“Minor (sic) Corbin & King Holdings Limited, Corbin & King Restaurant Group Limited incorporating The Wolseley Restaurant Limited, The Wolseley Restaurant Property Limited, The Delaunay Restaurant limited The Delaunay Property Limited, The Colbert Restaurant Limited, Brasserie Zedel Property Limited, Brasserie Zedel limited Fischers Restaurant Limited, The Bellanger Restaurant limited (sic)…”
In the “Property damage section” which follows, twelve different restaurants and/or addresses are then listed separately as numbered “premises”. With two exceptions the premises are all in London.
The “Business interruption section” then begins at page 92 of the Schedule. Rather than listing different restaurants, the heading “premises 11” is given with “Floater” then “GBF” (“Great Britain Floater”) beneath. This is repeated four pages later.
Under “Property insured” in the business interruption section:
i) Gross profit is insured on an “All Risks” basis for £67,643,191 with an uplifted sum of £90,188,666 with an indemnity period of 24 months.
ii) Additional increased cost of working is insured on an “All Risks” basis for £514,000 with an uplifted sum of £685,316 with an indemnity period of 24 months.
iii) Tronc 1 is insured on “All Risks” basis for £5,951,627 with an uplifted sum of £7,935,304 with an indemnity period of 12 months.
iv) The total sum insured is £98,809,286.
It is common ground that these sums insured are aggregate figures applicable to the Claimants' Premises collectively.
Among the “Cover limits” listed in the business interruption section is NDDA. The “sums insured/limits” are stated to be “ 100% of the sum insured or £250,000 whichever is less”.
The nature of the NDDA cover is set out in the “Business interruption section” of the Full Policy Wording. It is in the following terms:
“ Denial of access (non-damage) cover
We will cover you for any loss insured by this section resulting from interruption or interference with the business where access to your premises is restricted or hindered for more than the franchise period shown in your schedule arising directly from:
1 the actions taken by the police or any other statutory body in response to a danger or disturbance at your premises or within a 1 mile radius of your premises.
2 the unlawful occupation of your premises by third parties
Provided that
1 the insurance provided by this cover shall only apply for the period starting with the restriction or hindrance and ending after 12 weeks during which time the results of the business are affected
2 our liability for any one claim will not exceed the limit shown in your schedule.
We will not cover you where access to your premises is restricted or hindered as a result of
1. physical damage to property at your premises or elsewhere
2. strikes, picketing, labour disturbances or trade disputes
3. the condition of or the business conducted within your premises, or any other premises owned or occupied by you
4. notifiable diseases as detailed in the Murder, suicide or disease cover
5. actions where you have been given prior notice.”
(2) COVID-19 Pandemic and Associated Restrictions
The factual background so far as concerns COVID-19 is common ground and was set out in an agreed statement of facts.
The COVID-19 pandemic reached the United Kingdom in or around early March 2020.
On 20 March 2020, the Prime Minister Boris Johnson announced “ all the formations of the United Kingdom, all the devolved administrations” were “ collectively telling, telling cafes, pubs, bars, restaurants to close tonight as soon as they reasonably can, and not to open tomorrow. Though to be clear, they can continue to provide take-out services.”
On 21 March 2020, the Health Protection (Coronavirus, Business Closure) (England) Regulations 2020 (“ the 21 March Regulations”) were made by the Secretary of State for Health and Social Care pursuant to powers under the Public Health (Control of Disease) Act 1984 (“ the 1984 Act”). Regulation 2 provided as follows:
“ Requirement to close premises and businesses during the emergency
2.—(1) A person who is responsible for carrying on a business which is listed in Part 1 of the Schedule must—
(a) during the relevant period—
(i) close any premises, or part of the premises, in which food or drink are sold for consumption on those premises, and
(ii) cease selling food or drink for consumption on its premises; or
(b) if the business sells food or drink for consumption off the premises, cease selling food or drink for consumption on its premises during the relevant period.
(2) For the purposes of paragraph (1)(a), food or drink sold by a hotel or other accommodation as part of room service is not to be treated as being sold for consumption on its premises.
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