Key Facts
- •The case involves six expedited test cases concerning business interruption (BI) losses due to the COVID-19 pandemic.
- •Claims are based on 'at the premises' (ATP) disease cover in BI insurance policies.
- •Central issue: whether the Supreme Court's causation approach in the FCA test case applies to ATP disease cover.
- •Policyholders argue 'yes,' insurers argue 'no,' with varying reasons.
- •Other issues: coverage for pre-notifiability occurrences of COVID-19, definition of "Medical Officer for Health," and interpretation of specific Mayfair policy language.
Legal Principles
Contract interpretation is objective, focusing on a reasonable person's understanding with available background knowledge.
FCA test case, Divisional Court and Supreme Court
Proximate causation analysis in insurance considers the contractual interpretation and intended effect of the policy applied to the facts.
Supreme Court in FCA test case
In concurrent causation, multiple events contribute to the loss, even if individually insufficient; each is an effective cause.
Supreme Court in FCA test case
Outcomes
The Supreme Court's concurrent causation approach applies to ATP disease cover.
The core reasons for the Supreme Court's decision in the FCA test case—the nature of notifiable diseases, the lack of a 'but for' requirement, and the need for a clear and simple test—apply equally to ATP clauses. The geographical scope of the peril (at the premises vs. within a radius) does not dictate a different causation test.
Occurrences of COVID-19 before it became a notifiable disease are not covered.
The policy requires the disease to be notifiable at the time of the occurrence; notifiability is a defining characteristic of the covered peril.
"Medical Officer of Health for the Public Authority" includes the Chief Medical Officer and other senior national government medical advisors.
The term "Public Authority" has a broad meaning encompassing national governments; a restrictive interpretation to only local authorities is unreasonable.
In Mayfair's policy, "suffered by any visitor or employee" means the visitor or employee had contracted COVID-19 while at the premises, regardless of symptoms or diagnosis.
"Suffered" is interpreted synonymously with "sustained" or "manifested," providing a clear and simple test. A subjective experience of symptoms is not required.