UKHospitality COVID19 reopening webinar...Acting for a well known household consumer brand on a...

UKHospitality

COVID19 reopening

webinar

25 June 2020

England• The Government will (later today) publish a set of COVID-19 Secure overarching health and safety

guidelines for hospitality businesses:- Pubs and restaurants - Visitor Economy - Hotels and other guest accommodation

• Businesses will need to risk assess themselves against these, in order to open safely from a designated date

• These will not be a prescriptive list of detailed obligations, but areas you should consider to mitigate risk factors in your individual business related to COVID-19

• You will need to do a risk assessment for your premises based on the above showing you have considered the risks, and made appropriate actions to mitigate them

Scotland• The Scottish Government has last week published guidance for hospitality

businesses to reopen, and UKH Scotland guidance is available • This follows the same principle as expected by England/UK guidelines, i.e. set of

overarching principles for businesses to risk assess themselves against

Wales and Northern Ireland reopening guidance also expected to follow the same risk assessment based principles

• This is working guidance and potential actions developed with members and other stakeholders

across a wide range of hospitality sectors over the last few weeks

• It is an extensive document with advice on specific areas of the business – examples include:

• Accommodation – reception areas, rooms service, lifts

• Pubs and bars – bar area, toilets, pinch points, flow of customers, outside areas

• Restaurants – table service, reservations

• Also attractions, contract catering, links to other relevant sectors

The guidance is not a comprehensive or prescriptive list, as each business is unique. It is

intended to help businesses think about the specific measures that they themselves can

reasonably take in their own workplace, to mitigate the risks and make their workplace COVID-

19 Secure. These will not be the yardstick to open – it will be up to you to create your own risk

assessment based on what works for your business

Katie Chandler Private and Confidential

FCA Test Case

UKHospitality Webinar

25 June 2020

English (United Kingdom)

7

Katie Chandler is a Partner in the Disputes and Investigations Group. Katie has a broad litigation practice acting for clients in high-value,

complex insurance and commercial disputes relating to matters which include corporate governance and shareholder issues,

technology implementation project disputes and product liability claims. Katie acts for clients in a variety of sectors including

technology, life sciences and consumer and retail with a particular focus on advancing technologies such as the Internet of Things

and automated and connected vehicles. Katie also has significant experience advising on product safety law and regulatory

compliance including acting on product recalls across a variety of industries as pharmaceuticals and healthcare, automotive,

technology and consumer goods.

Recent experience includes:

Acting for international software developers in substantial high value IT project disputes including a tripartite dispute

concerning the development of a bespoke banking system involving a claim for damages in excess of £15 million.

Acting for one of the largest multi-national suppliers of photocopying and printing services worldwide in successfully defending

a high value claim for damages of over £60 million arising from an alleged breach of a confidentiality agreement and/or

equitable breach of confidence.

Successfully defending a £60m+ claim brought for alleged defective design/implementation of a data hosting and IT platform,

which raised complex issues in relation to business interruption and quantification of future losses.

Acting for a BVI fund in the complex and high value Avonwick Holdings Limited v Webinvest Limited litigation and managing

cross-border litigation in England, Holland and the BVI.

Acting for a well known household consumer brand on a number of shareholder disputes including defending section 994

petitions for unfair prejudice.

Acting for a well-known domestic electrical appliance company in relation to insurance product liability claims arising out of a

fire alleged to have been caused by a defective dishwasher.

Recommended in The Legal 500 as Next Generation Partner.

Your team

Katie Chandler

+44 20 7300 4163

[email protected]

mKey areas of expertise:

Disputes & Investigations

Products

Memberships and

Associations

Women in Telecoms and

Technology (WiTT)

SCL Tech Law, The Society of

Motor Manufacturers and

Traders (SMMT)

DRI (the leading organisation

for civil defence product

liability lawyers).

The International Association

Partner

London, UK


8

Julian Randall is a partner in our Disputes & Investigations group. He has a broadly based practice with a particular emphasis on

disputes and regulatory issues in relation to financial and professional services.

Julian advises as to clients’ rights and exposures in relation to allegations of professional negligence, the operation of financial

instruments, contractual claims for breach of mandate, insurance disputes, injunctive relief and insolvency issues. He acted for

PricewaterhouseCoopers in their successful defence of regulatory proceedings arising out of the collapse of the Mayflower Group and for

Moore Stephens in their successful defence of the $175m claim brought against them by the liquidator of Stone & Rolls.

Julian is also admitted in Hong Kong where he practiced for five years.

He is recommended in the latest Legal 500 in relation to commercial litigation and banking disputes (“a brilliant lawyer with great

business acumen”) and professional negligence (“really very clever”) and in Chambers for dispute resolution, professional negligence,

professional discipline and banking disputes. Chambers 2012 recommends him as having a strong track record as a tough negotiator

able to offer high-level strategic advice. Julian was nominated for Disputes Team of the Year in the Legal Business awards in 2010 for

the Stone & Rolls case.

Julian attended Jesus College Oxford (1983 MA Jurisprudence).

Your team

Julian Randall

+44 20 7300 4720

[email protected]

Key areas of expertise:

Disputes & Investigations

Partner

London, UK

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“The "very able" Julian Randall is described as a "clever and balanced" practitioner by market commentators.“, Chambers


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Richard is a Corporate partner and heads up the Hotels Group. He has extensive experience of advising UK and international Owners,

Developers, Funders and Operators on numerous hotel related projects around the world. Richard is top ranked for Hotels work in Legal

500.

His recent experience of Hotels and Hotel Management Agreements (HMA) includes advising:

a HNW Family on a HMA with IHG for a new build Crowne Plaza in outer London;

Lloyds Banking Group on a series of financings including the refinancing of the Crowne Plaza, Blackfriars operated by IHG

under a Management Contract;

Cedar Capital on a HMA with the Dorchester Group for its operation as the Le Richemond Geneva, a Dorchester Collection

Hotel;

a HNW Individual on a HMA with Kempinski for a new build hotel in Central Europe;

BDL Management on HMAs (and where relevant Franchise Agreements) for around 50 hotels in the UK, both branded Holiday

Inn, Express by Holiday Inn, Crowne Plaza, InterContinental and Ramada as well as various unbranded hotels;

the Owner of the Movenpick Paris Hotel on a new HMA with Movenpick for the hotel which was previously the Courtyard by

Marriott, Neuilly, Paris;

a UK based developer on the acquisition of a Hotel resort in French Polynesia;

De Vere Group on a HMA for a 324 room 'The Belfry' Hotel and Golf Resort, West Midlands, four-time host of the Ryder Cup;

and

Cedar Capital on the acquisition of the Le Richemond Hotel, Geneva from Rocco Forte Hotels and its operation under a short-

term HMA with Rocco Forte.

Your team

Richard Bursby

+44 20 7300 4874

[email protected]

Key areas of expertise:

Corporate, Commercial &

Projects

Partner

London, UK

““Highly informed, very accessible, commercial and efficient." Leading individual“, Chambers


10

Substantial losses caused by Government's response to COVID-19

Insurers' response – rejecting claims no pandemic cover

Lack of clarity in policies and ambiguous wording

FCA has stepped in to assist

Business Interruption insurance policies

Traditionally cover loss of revenue or profit experienced by a business following

damage to property

Non-damage to property extensions: notifiable/infectious diseases, denial of access,

actions by a competent authority

Complex issues dependent on wording of policies

FCA involvement

Test case

Introduction

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High Court proceedings

17 representative policy wordings

Securing the maximum relevant coverage for relevant policies while minimising the

number of parties engaged before the court.

8 insurer defendants

FCA stepping into shoes of policyholders

Narrow scope, focused on ambiguities

Ambitious and complex

Focus

Non-material damage clauses

Locality of disease

Government's response

Causation and loss

FCA Test Case



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What the test case will decide

Binding on insurers and representative policies

Guidance for interpretation of similar wordings / claims

Certain uncertainties and "causation" issues

What the test case will not decide

Will not resolve all disputes

Quantum issues and how much is payable

The FCA is expected to publish a list in early July of all policies with claims that may be

affected and insurers should have contacted relevant policy holders

What does it mean for UKH Members



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Getting the hospitality industry's voice heard

Representing members' interests

1. The FCA application is not a claim against the insurance industry which might result in

a pay out to policy holders

2. The FCA's application is seeking to clarify the meaning of certain commonly used

policy wordings

3. Many of the grounds upon which insurers have refused cover will not be challenged

4. Our review necessarily focussed on limited points of ambiguity

TW / UKHospitality's role



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(1) Whether there is cover in principle under any relevant non-damage insuring

clause in respect of loss arising as a result of interruption or interference with the

insured’s business by the COVID-19 pandemic?

(2) In principle where coverage is established whether the policyholders can in

principle establish the necessary causal link between assumed losses and the

relevant incident, event or circumstance that is covered?

FCA is seeking a number of declarations on sample policy wordings

Questions in Test Case (1)



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Declarations sought

COVID-19 is a human infectious and contagious disease notifiable from 5 March

2020

COVID-19 can be said to have occurred in a particular vicinity or localised area

within 1 or 25 miles of the insured's premises

There was an emergency which could endanger life, incident, threat or risk of

injury within a certain distance or vicinity of the premises in early/mid-March 2020

The advice, instructions, regulations were all actions of government, public

authority, competent authority and resulted in prevention/denial of access to

premises, closure.

Pollution and/or contamination exclusions do not apply.

COVID-19 and Government closures are all proximate causes of the resulting loss

Applicable causation tests are satisfied where BI losses would not have been

suffered had COVID-19 pandemic and government closures not occurred.

Trends clauses not applicable.

Questions in Test Case (2)



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Disease cover

Clauses limiting cover to closed list of disease and/or geographically to "the premises" are of no application to COVID-19 (out of scope).

If the policy provides cover for an occurrence or manifestation within a specified radius, the policy holder needs to prove (i) the occurrence and

(ii) that the occurrence caused the business interruption and (iii) that the interruption caused the loss.

Requirement of "vicinity" limits cover to local events, not nationwide pandemics.

The geographical restriction demonstrates intention not to cover pandemics.

Any interruption was caused by the response of the UK Government and the public, and not the local occurrence/manifestation of the disease.

Denial/prevention of access cover

COVID-19 not a "danger", "disturbance", or "emergency" within the "vicinity".

As above, any interruption caused by the response to COVID-19, not the "event" within the "vicinity".

Adjustments/trends clauses

No loss payable under the policy as the business would have suffered those losses in any event as a result of the response by the public and

government to COVID-19 (i.e. avoiding shops due to fear, reduction in income, etc.)

Exclusions

Some insurers not relying on "microorganism" or "pollution and contamination" exclusions.

Insurers' Defences



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Rapidly developing situation

Hearing in July, possible appeal directly to Supreme court, final outcome in Autumn

Members should reserve their position with insurers

Reports from insurers due on Wednesday 8 July on impacted policies

General communications expected from insurers to non-damage business

interruption policyholders

Individual communications to claimants / complainants expected by 15 July

FCA filing Reply to Defence on 3 July

Policyholders and stakeholders invited to comment on Defences by 3pm on

Monday 29 June

Next steps



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© Taylor Wessing 2020

This publication is not intended to constitute legal advice. Taylor Wessing entities operate under one brand but are legally distinct, either being or affiliated to a member of Taylor Wessing Verein. Taylor Wessing Verein does not itself provide services. Further information can be

found on our regulatory page at https://deutschland.taylorwessing.com/en/regulatory.

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