Insurer takes a hit in Corbin & King v AXA

Alex Balcombe of Harris Balcombe LLP considers the decision in Corbin & King v AXA, in which his partner Jonathan Samuelson advised the successful claimants.

In a decision welcomed by many in the beleaguered hospitality sector, the restaurant group Corbin & King, owners of leading restaurants, The Wolseley and The Delaunay, achieved a resounding success in its claim against AXA for business interruption losses suffered as a result of COVID-19.

When Covid first struck, many policyholders with business interruption extensions covering Disease, or Non-Damage Denial Of Access (NDDA), believed that they would have valid claims. Largely, without exception, insurers quickly acted to rebut this view. Recognising the widespread misery caused by forced closure, and the disputes over the correct policy response, the FCA launched a test case in which the High Court initially found in support of insurers. The Disease element of that case was appealed and in January 2021 the Supreme Court found largely in favour of policy holders, by virtue of their view of the correct test for causation.

Whilst that was great news for policyholders with open ended Disease extensions, it left those with NDDA cover in no-man’s land. The previous High Court decision was argued by insurers to remain good law, even though it was widely recognised that the High Court would not have arrived at the same decision had they adopted the Supreme Court’s subsequent view on causation. 

Supported by us, our client, Corbin & King, decided to challenge AXA’s position in court. The judge agreed with Corbin & King, and held that COVID-19 is capable of being a danger within a one-mile radius of the premises. These individual ‘dangers’, taken together, were what forced the Government to act.

The judge concluded that it was a composite policy and sided with Corbin & King – they were entitled to claim separately up to £250,000 in respect of each of their restaurants and for each period of restriction.

AXA has confirmed that it is not going to appeal the High Court decision. Many insurers relied on the FCA’s choice not to appeal the High Court’s initial the decision regarding NDDA clauses, to maintain their narrow view on cover, even though it was almost universally recognised that the earlier decision was very likely to have been different had the Supreme Court’s view on causation been known by the High Court. 

Thankfully, insurer’s intransigence was tested in Corbin & King v AXA and it has been shown to be wrong. This will undoubtedly unlock claims for many policyholders who have been frustrated by repudiations or very low single limits applied across a group rather than by site and by lockdown. 

If you are a business with multiple sites, in the hospitality or entertainment sector, and you have struggled to get your COVID-19 claim paid, we strongly recommend that you seek professional advice to check the potential coverage offered by your policy, in place at the time of disruption and lockdowns. Importantly, this decision doesn’t only affect restaurants. Bars, pubs, nightclubs, health clubs, bingo halls, cinemas and theatres are all examples of businesses that should benefit. 

Harris Balcombe are currently acting for 1,800 policy holders with Covid BI claims, with many further enquiries following this case. We review each enquiry on its merits and provide a free initial consultation. We would be very pleased to hear from you as well. There is no commitment at all. Please call Jonathan Samuelson on 07721 615141 or Alex Balcombe on 07714 674949.