A hearing to determine the level of losses FBD must pay to four publicans, who won test actions over FBD's failure to pay out on Covid-19 business disruption claims, has opened before the High Court.
The actions have been taken by Dublin bars Aberken, trading as Sinnott's Bar; Hyper Trust Ltd, trading as the Leopardstown Inn; and Inn on Hibernian Way Ltd trading as Lemon & Duke in Dublin.
Leinster Overview Concepts Ltd, the owner of Sean's Bar, which is based in Athlone, Co Westmeath, is the fourth plaintiff.
In his decision earlier this year, which affects claims by some 1,000 Irish pubs and restaurants, Mr Justice Denis McDonald found a policy sold by FBD covered losses pubs sustained by having to close due to the pandemic.
In a subsequent judgment, the judge ruled on what interpretation should be applied to the term ‘closure’ within FBD’s public-house policy of insurance, which is relevant to quantifying the losses.
He found the word closure is not confined to a total shutdown of the insured properties premises, but extends to a closure of part of the premises.
The actions have now moved to the next stage of the action, which is a hearing to determine the quantum of the publican’s losses.
The hearing over losses before Mr Justice McDonald is expected to last two weeks.
Opening the hearing, Michael Cush SC for the Lemon and Duke and the Leopardstown Inn owners, said submissions were being made on several issues in relation to quantum.
The issues include the partial closure of the public houses, staff costs, late payments, trends and circumstances, underinsurance and the costs of capital expenses.
The relevance of each of these individual issues varies from pub to pub, the court heard.
For example, partial closure is not relevant to Sean’s Bar as it had remained closed from March 2020 to June 2021, the court heard.
Mr Cush said the judge had made a finding on the issue of partial closure.
This issue, counsel said, would take into account factors including the effects of government and local-authority guidelines, on matters including social distancing in bar areas in his client’s premises.
Another issue that would be considered is staff costs, and the payment of wages to staff when the premises were closed and partially reopened.
This issue, counsel said, related to the bar’s costs of retaining staff.
This, he said, had been done for self-preservation grounds by his clients in order to hold on to good bar staff.
The hearing continues.
In his February judgment Mr Justice McDonald disagreed with FBD’s interpretation of its business-disruption policy regarding Covid-19.
He said that cover was not lost where the closure was prompted by nationwide outbreaks of disease provided that there was an outbreak within the 25-mile radius and that outbreak was one of the causes of the closure.
The publicans challenged FBD’s refusal to indemnify them, as well as the insurer’s claim that its policies did not cover the disruption caused by Covid-19.
They claimed that under their policies of insurance they were entitled to have their consequential losses covered by the insurer.
FBD claimed the policies contained a clause that states the pubs would be indemnified if their premises were closed by order of the local or national government authority if there were “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same”.