Charles Russell Speechlys succeed in Greggs v Zurich Covid-19 insurance trial

Charles Russell Speechlys successfully act for Greggs in landmark business interruption trial. Today’s judgment substantially accepts Greggs’ primary case for payment of business interruption and related losses caused by Covid-19 and its consequences.

This follows July’s Preliminary Issues trial to determine how many Single Business Interruption Limits of £2.5m were payable under the Resilience Insurance wordings as a result of business interruption caused by Covid-19.

Insurers contended that there was only one ‘single occurrence’ under the insurance policy, entitling Greggs to only one limit of £2.5m for all of its Covid business interruption losses. The judge rejected this argument.

For its part, Greggs argued that it was entitled to access a separate limit of £2.5m each time the Westminster and devolved governments in the UK adopted a major Covid restriction measure affecting Greggs’ business, meaning that there were multiple such restrictions and corresponding £2.5m limits. The judge accepted the main thrust of Greggs’ primary case. He ruled that there was a single occurrence at the outset (from March 2020 until May 2020) followed by separate occurrences in each jurisdiction within the UK as the level of major restrictions in place was adjusted from time to time over the course of 2020 and also separate occurrences within each jurisdiction where there were local lockdowns or other restrictions. The Judge also held that those regulations which merely continued existing restrictions or made trivial changes did not provide additional £2.5m limits.

Charles Russell Speechlys Partner, Manoj Vaghela, commented:

This outcome vindicates Greggs commencing proceedings and has wider implications for all businesses that purchased the Resilience Insurance policies. Insurers’ argument that there was only one limit available for Covid business interruption losses has been firmly rejected. “

The result reflects the hard work of Charles Russell Speechlys and our talented counsel team of Christopher Hancock KC, Simon Milnes KC and Courtney Grafton of Twenty Essex.”

Jonathan Jowett, General Counsel of Greggs, said:We would like to thank Manoj, and the rest of the legal team for their expertise in successfully arguing the interpretation of complex coverage wording, and for the long hours they have had to devote to this successful outcome.”

Subject to appeal, Greggs plc v Zurich Insurance plc (Case No: CL-2021-000622) will now proceed to phase 2 when insurers and Greggs will calculate the value of the business interruption loss recoverable under the insurance policy.

The Charles Russell Speechlys team was led by Manoj Vaghela, Partner, with support from Partner, Charlotte Pender, Associate, Hannah Gornall, Associate, Rory Partridge and Trainees Mary Barrett and Harriet Lucas.

Related coverage:

Insurance Business UK, Law 360, Insurance Post, The Law Society Gazette and Insurance Insider

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