If having inspected your policy, you feel you have grounds to make a claim to cover your losses during the lockdown, when your business was interrupted, but it is refused by your insurers, you may have one further option.
You may find that across your industry you share the same fate as many similar businesses, perhaps with similar insurance policies as recommended by colleagues, brokers or trade associations. If this is the case, it might be possible to band together and pursue an insurer together.
The famous saying ‘there’s safety in numbers’ rings true when it comes to taking legal action and is known as a Class Action in the US and group litigation in the UK. It describes collective legal action brought by a group of claimants that have been affected by an occurrence in the same way.
For many affected businesses, pursuing a resolution through the courts can be an expensive and time-consuming task, so coming together with others to fight a case might offer a better chance of being successful, whilst sharing the risk and the costs.
The costs of preparing the case can be shared across many parties, or often there will be a funding arrangement offered by the solicitors to minimise the up-front costs.
One of the many advantages of group litigation is the additional resources given to finding and obtaining crucial evidence, which can be a costly process for those considering individual action and will often make the difference in a case.
Whilst there is always the chance that a case may be unsuccessful, group litigation again means that instead of facing the other party’s legal expenses alone, they are shared amongst the group. Or, where an insurance policy is in place to pay those costs, that premium can be shared across a large number.
Bringing people and businesses together to fight a case can also give a competitive edge in terms of knowledge and understanding of the legal proceedings. It also demonstrates to the defendant that the claimants mean business and typically have the funding to fight a good case.
Increasingly, there are investors actively seeking strong and winnable group litigation cases to support, as they are confident in making a return on their investment, come the final decision.
There is no simple process for finding others who may have similar claims and in the UK, claimants must choose to join the litigation and make an application to be included. The best way to find others is to talk to contacts, search the internet and seek out law firms talking about the issue.
Then it is just a matter of getting touch with what is typically an experienced lawyer, who is very likely to have funding to support the group litigation. They will advise if your claim is appropriate and if it is, you may be invited to apply to be included.
Ultimately, the decision is yours to take, but group litigation is usually a wise financial decision, given the current economic uncertainty. https://dramscotland.co.uk/2020/06/04/coronavirus-and-the-business-interruption-insurance-debate/
About the author: Susan Hopcraft is a partner in the Dispute Resolution team at Wright Hassall. She deals with contract claims, including service agreements and restrictive covenants, insurance policies and issues relating to guarantees, warranties and breach of confidence. Susan also advises on professional negligence claims against valuers, surveyors, solicitors, brokers and accountants, fraud issues and recoveries for lenders.
About the firm: Wright Hassall is a top-ranked firm of solicitors based in Warwickshire, providing legal services including: corporate law; commercial law; litigation and dispute resolution; employment law and property law. The firm also advises on contentious probate, business immigration, debt recovery, employee incentives, information governance, professional negligence and private client matters.