As part of a look forward to the most significant financial services and insurance law cases to be heard in the UK in 2022, Law360 spoke to Head of Fraud Mo Bhaskaran.

Mo discussed imminent clashes between businesses and insurers over losses caused by the Covid-19 pandemic and government lockdown restrictions. Bar chain Stonegate Pub Co. has argued that the pandemic had an individual effect on each of its locations, entitling the company to a £2.5 million pay-out for each pub totalling £845 million for the network as a whole.

Insurers Zurich, Liberty Mutual and MS Amlin have countered that the effects of Covid-19 constitute a single event, irrespective of the number of lockdowns, or the number of premises, and so Stonegate Pub Co. is owed just £2.5 million. The trio of insurers has subsequently said that only the sets of regulations announced by the government on March 16, 20 and 23 2020 constitute a ‘new loss event’, and insurance companies have since modified their policies in anticipation of subsequent lockdowns.

Mo suggested that “there’s an argument that pubs closing down in March 2020, reopening and then closing down again in January 2021 after the virus re-emerged were two separate events. You could compare it to motor insurance – if you have two different crashes, each one is still a car crash, but you can still claim twice.” However on both the issue of multiple premises and multiple lockdowns, Mo commented that “each individual policy will have to be determined on its merits.”

Zurich, Liberty Mutual and MS Amlin have already aimed to limit potential losses by arguing that every piece of government advice isn’t a new, insurable event. A test case brought by the Financial Conduct Authority covered only a specific set of policy wordings and did not address the issue of chain companies with multiple branches.

The clash between Stonegate Pub Co. and its insurers is likely to set a precedent for future claims of this kind, to be brought in 2022 and beyond.

Other top cases in 2022

Law360 also highlighted these cases as ones to watch in the coming year:

• Large institutional investors claiming damages against RSA for releasing misleading information caused by accounting errors, and therefore breaching market rules. Proceedings to determine liability in the first instance are listed for October 2022.
• Nigeria’s High Court claim against JPMorgan, alleging the bank ignored red flags and negligently paid $875 million worth of government funds to a former energy minister and convicted money launderer. The trial is set for February 2022.
• Two civil fraud claims involving former bankers in Russia and Ukraine, each involving huge sums of money and alleged misappropriation of funds.
• A Supreme Court ruling on HMRC’s alleged £8.8 million tax debt to the British Coal Staff Superannuation Scheme. The case concerns dividend payments received under stock lending agreements. HMRC estimates the result could affect £905 million worth of tax collections going forward.

Read the full article on Law360’s website here.

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