A coalition of football clubs have filed a multi-party lawsuit against six major insurers seeking a larger payout for money lost during Covid-19, after the UK’s Supreme Court said businesses are allowed to reclaim losses suffered due to the impacts of the pandemic.
A consortium of 20 separate claimants – including Arsenal, Liverpool, and Aston Villa – have hired Magic Circle law firm Clifford Chance to fight their Covid business interruption case in the UK’s High Court.
Arsenal confirmed to City A.M that eight Premier League clubs had filed High Court proceedings over “claims under business interruption insurance policies for losses that they independently suffered in the context of the COVID-19 pandemic.”
The Arsenal spokesperson said the clubs had decided to bring their claims forward together, due to the fact that each club has “substantively the same policy wording” and each club has “suffered similar types of loss.”
The lawsuit is set to see entities linked to clubs including Arsenal, Aston Villa, Brighton & Hove Albion, Crystal Palace, Leicester City, Tottenham Hotspur, and West Ham United seek larger payouts from insurers.
The case comes after the UK’s Supreme Court said insurance giant Axa must pay £4.4m to high-end restauranter Corbin & King, after the firm initially refused to pay out for Covid related business losses.
The landmark ruling subsequently opened the door for businesses to file similar Covid related claims, as the court ruled businesses should be able to claim back any lockdown losses under non-damage denial of access (NDDA) insurance policies.
The ruling also increased the amounts of money insurers are liable to pay out, by allowing policyholders to claim for each separate premises impacted by Covid disruption.
Samantha Holland, head of insurance at Gowling WLG, said: “this would appear to be the latest in a series of claims against insurers where policyholders are seeking to recover COVID related losses incurred as a result of the lockdown measures introduced in the pandemic.
The legal battle is set to see London law firm DAC Beachcroft act on behalf of insurance companies Allianz, MSAmlin, and Liberty.
At the same time, Magic Circle law firm Slaughter and May is set to represent Aviva, Clyde & Co is set to act on behalf of Zurich, and RPC will represent CNA Insurance.
The lawsuit comes after a poll of London lawyers showed 84 per cent believed the Axa ruling would result in a boom in litigation in the coming year, as insurers and policyholders fight over how much money is liable to be paid.
Karim Oualnan, Commercial Litigation Partner at JMW Solicitors, said the Axa ruling gave policyholders “renewed optimism” in making claims for Covid-linked losses.