Rockliffe Hall Ltd v Travelers Insurance Company Ltd

A defined list of insured diseases will ordinarily be treated as exhaustive where the policy states that “Infectious Disease means” the listed diseases. The court must construe the wording as a reasonable policyholder would understand it, reading the list in its contractual context. A disease is not covered merely because it may cause, or rarely manifest as, another listed disease or condition. A static list does not extend to newly discovered diseases through analogy with a statutory or externally maintained list. Where the wording is clear, neither contra proferentem nor the possibility of further expert evidence justifies a trial. Summary judgment is appropriate where the insured’s construction has no real prospect of success and no further evidence could affect the issue.

Rockliffe Hall operated a hotel, resort and golf course insured by Travelers under a policy containing business interruption cover. Extension 10 covered interruption resulting from specified “Infectious Diseases”, defined by a list of 34 diseases. Covid-19 was not listed.

Rockliffe Hall claimed that Covid-19 was covered because “Plague” could bear a broad meaning, or because Covid-19 could cause listed conditions such as acute encephalitis or meningitis. Travelers applied to strike out the claim under CPR 3.4 or obtain reverse summary judgment under CPR 24.2. The central issue was whether the policy wording gave the claim a real prospect of success.

1. Disposition. Travelers’ application was granted. The claim was struck out and, to the extent necessary, reverse summary judgment was entered under CPR 24.2(a) and (b).
2. Summary judgment principles. The court applied the approach explained in Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch). A claim must have a realistic, rather than fanciful, prospect of success. The court should decide a short point of construction summarily where it has the necessary material and there is no real prospect that further evidence will alter the result.
3. Construction. The policy had to be read as a whole from the perspective of the reasonable policyholder, not through minute textual analysis. The definition began “Infectious Disease means”, which strongly indicated an exhaustive list. The legislative history said to underpin the list was not reasonably available factual matrix evidence.
4. Meaning of “Plague”. In context, “Plague” meant the specific infectious disease caused by Yersinia pestis. It appeared among Cholera, Smallpox and Typhus, all specific diseases. The wider descriptive meaning of an epidemic or highly fatal infectious disease was inconsistent with the structure and purpose of the list and would make much of it redundant.
5. Other listed conditions. Covid-19 was not synonymous with acute encephalitis, meningitis or food poisoning. The possibility that Covid-19 might cause those conditions did not establish an outbreak of them or bring Covid-19 within the policy. The pleaded case itself identified Covid-19 as the cause of the closure.
6. Statutory analogy and residual arguments. The reasoning in the FCA test case concerning dynamically updated “Notifiable Disease” clauses did not apply to this static, self-contained list. There was no ambiguity to trigger contra proferentem, and allowing the claim to proceed for speculative negotiations or expert evidence would merely postpone an inevitable failure.