London International Exhibition Centre Plc v Royal & Sun Alliance Insurance Plc & Ors

Where numerous insurance claims raise a common construction and causation issue, the court may select lead cases and determine appropriately formulated preliminary issues within a coordinated hearing window. In doing so, it may seek a sufficient range of policy wordings, arguments and parties to provide a reliable market-wide determination, while avoiding duplication and unnecessary expansion of the issues. Parties who have pleaded and wish to argue the common issue may properly be included, even if the issue was not previously advanced for early determination, provided that participation does not make the process unwieldy or cause irreversible prejudice. A policy clause should be construed in the context of the policy as a whole, but that does not necessarily prevent preliminary determination of its construction.

This was a case management conference in claims concerning business interruption insurance losses arising from the Covid-19 pandemic. The central issue was whether, under policies containing an at-the-premises or similar clause, proximate causation could be established by proving that Government action responding to Covid-19 included at least one case at the insured premises by the date of the action.

The claimant had previously sought determination of that preliminary issue, but the court had declined to order it at that stage: [2022] EWHC 2712 (Comm). The present hearing considered how the London Exhibition case and several related claims should be managed together, including which cases and policy wordings should be included in a coordinated hearing.

1. Case management decision. The court directed that a series of hearings should take place in a two-week window beginning on 24 April 2023, with the London Exhibition case as the lead case. Pizza Express was included only in relation to its at-the-premises/causation issue. Hairlab, Kaizen Cuizine and Mayfair were also to form part of the process. The possible inclusion of Why Not Bar was left for further discussion or determination.
2. Common issue and representative selection. The court treated the at-the-premises/causation issue as an important market issue affecting numerous claims. A sufficient range of different policy wordings and arguments was desirable, together with enough cases to allow for settlements without undermining determination of issues of principle. At the same time, duplication and excessive expansion of the hearing were to be avoided.
3. Participation and prejudice. Parties which had pleaded the common issue and wished to make submissions could properly participate. The fact that Mayfair had previously accepted a later trial date, or that RSA was less interested in the precise at-the-premises wording, did not justify exclusion. The court found no irreversible prejudice in accelerating the common issue, while preserving the later trial for the remaining issues.
4. Construction in context. The at-the-premises wording could not necessarily be divorced from the policy’s other terms. Nevertheless, that contextual consideration was not a bar to preliminary determination of the construction of the relevant clause. The court also considered it useful to include both plain-vanilla and hybrid wordings.
5. Other cases and issues. The proposed Pizza Express issues concerning emergency or closure of premises and aggregation were not sufficiently common to justify inclusion. New Inn and Claire Watson added no materially distinct issue at that stage, though substitution could be considered if selected cases settled.

The judgment records an earlier application by the claimant for determination of a preliminary issue, which was declined at that stage: [2022] EWHC 2712 (Comm). The present judgment concerned subsequent case management and coordination of the related claims.