Group action against NFU Mutual for Covid-19 business interruption

The group actions team at Penningtons Manches Cooper has begun commercial court proceedings against NFU Mutual (NFUM) on behalf of approximately 90 businesses affected by the coronavirus pandemic, in relation to business interruption claims that the insurer has refused to pay.

This has the potential to be an extremely important case for a number of reasons. Once additional claimants in the approximately 90-strong group are formally added, this will be one of, if not the, largest Covid-19 group action claim against a single insurer in terms of claimant numbers.

NFUM has contended that it is entitled to rely upon unappealed first instance findings by the divisional court in the FCA Covid-19 business interruption insurance test case proceedings, in regard to the meaning of the term ‘incident’ in a similarly worded Hiscox clause, so the claims made by those insured would not be valid.

The claimants, however, allege that the NFUM clause is distinct and, in any event, if applying the approach of the Supreme Court in the same test case proceedings, then the insurance policy would be relevant to the claims made.

There has also been a recent Court of Appeal decision, IEH v Allianz, where the Court of Appeal suggested that the relevant part of the divisional court judgment in the test case may have been wrongly decided, although it declined to overturn it at the time, as it was not strictly relevant or necessary to determine for the matter currently before it.

This case therefore has the potential to undermine the unappealed parts of the divisional court’s judgment in the FCA test case, which in turn could mean the reopening of hundreds of (potentially wrongly) declined Covid-19 business interruption claims across the wider market.

Related coverage:

‘NFU Mutual served with Covid group action’ Farmers Weekly. Read more
rn’Stratford insurance firm NFU Mutual faces multi-million pound Covid legal challenge’ Stratford-upon-Avon Herald. Read more
rn’Insurer in legal battle as farmers plough on in Covid BI row’ Insurance Times. Read more