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Oct 03, 2020

FCA applies for appeal to UK Supreme Court and High Court agrees

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The UK's FCA confirmed on 30 September that it will ask the High Court to give it permission to appeal to the Supreme Court.

The FCA's statement commented: "... we recognise that this case has always involved complex issues and we have filed our skeleton argument with the High Court today in an attempt to clarify some of these points at Friday’s hearing.

"We will continue discussions with insurers and action groups, to find a solution which resolves the outstanding issues as soon as possible to enable pay-outs on eligible claims.

"At Friday’s hearing, we will ask the Court to give us a certificate to apply to ‘leapfrog’ to the Supreme Court which we believe is the fastest way to get legal clarity as quickly as possible for all parties, in the event that it is not possible to resolve the outstanding issues in the coming weeks."

Hiscox statement

Hiscox announced on Tuesday 29th "In order to preserve the ability of any appeal to proceed straight to the Supreme Court, Hiscox, together with certain other Insurers and the FCA, has taken the necessary procedural step of applying to the High Court for a leapfrog certificate before yesterday's statutory deadline for doing so had passed. However, Hiscox has not yet made a decision on whether it will seek to appeal."

Update 2 October - the High Court has allowed a "leapfrog" appeal to the Supreme Court. The FCA will also "while continuing discussions with insurers and action groups to find a
solution that avoids the need for appeal and enables pay-outs on eligible claims as quickly as possible."

It appears that agreement cannot be reached between the parties to the test case - in the FCA's words "on the interpretation of some important elements of the judgment affecting which small businesses get paid and how much" - and therefore an appeal will occur which will probably mean delays to claims payments.

Law firm CMS videos on the test case outcome

For those interested in an insightful and lawyerly commentary on the results of the test case, we recommend this video series produced by the respected law firm CMS which is available on their website by clicking here. "In our short six part video series, we explore the immediate impact on brokers, BI insurers, reinsurance recoveries, reinsurance claims, regulatory considerations and trends clauses. The 162 page decision is indicative of the degree of complexity that the Judges found in analysing the BI wordings they were asked to consider – complexity which itself may be seen by many – including the FCA – as a systemic issue for the market."