PizzaExpress and SY23 owner win High Court ruling on insurance payouts

The High Court has ruled in favour of a group of businesses, including PizzaExpress and the operator of Michelin-starred restaurant SY23, seeking insurance payouts for coronavirus losses.

The judgement, handed down on 16 June, could lead to more successful claims from hospitality operators whose insurers have resisted paying out for business interruption losses since 2020.

The ruling covered six test cases brought by 12 businesses including Why Not Bar, which is behind SY23 (pictured) in Aberystwyth, the Excel London exhibition centre, and a Mayfair nightclub, against 13 insurance companies.

In 2021, the Supreme Court ruled in a separate test case that businesses with relevant policies could claim a payout if there had been a coronavirus case ‘in the vicinity’ of their premises.

Last Friday’s judgement extended this to operators with policies that covered notifiable diseases occurring ‘at the premises’ of their business.

Mr Justice Jacobs said in his ruling that this would be the “appropriate result” and none of the insurer’s arguments against the case had been “persuasive”.

Otherwise, Jacobs said the Supreme Court ruling could mean a restaurateur who caught Covid would be unable to claim for the disease at their own restaurant, but their neighbour could use it to claim under their policy for an infection in the vicinity of their premises.

Mark and Rhian Phillips, owners of Why Not Bar, said the ruling was a “pivotal moment” for hospitality businesses.

“This judgment offers real hope that we are one massive step closer to finally securing insurance payouts that are desperately needed and have been unjustly refused,” they added.

“As [members] of the hospitality industry struggling to balance the loss of loved ones with keeping [our] business alive, this ruling provides an enormous sense of validation that the sacrifices we have made have not been in vain.”

Erich Kurtz, senior associate in the financial mis-selling team at law firm Hugh James, represented Why Not Bar in the test case.

Kurtz said: “The High Court’s judgment will now bind insurers, providing vital legal certainty, and be used to assist other policyholders with ‘at the premise’ insurance policies reach out to their insurers and secure compensation.”

The 2021 test case saw 72 claimants against insurer Hiscox secure a settlement worth more than £5.2m.

Last year, restaurant group Corbin & King – now named the Wolseley Hospitality Group – won its High Court battle with insurer Axa, while Lake District hotel 1863 Restaurant with Rooms won a six-figure payout from RSA.

The battle with insurers over payouts has continued across the industry and in May Mexican restaurant group Wahaca filed a High Court claim against insurer QIC Europe.

Fuller's, which runs almost 400 pubs in London and southern England, confirmed it had started legal action against Liberty Mutual and Aviva earlier this year.