Bath Racecourse Company Ltd & Ors v Liberty Mutual Insurance Europe SE & Ors

Under business-interruption cover, an “any one loss” limit ordinarily applies by reference to each insured trigger event and the resulting loss calculation, rather than to each individual lost sale, race or day of interruption. Where the policy divides facilities into distinct categories with different indemnity periods and aggregate limits, the limit may apply separately to each affected facility.

A “competent authority” need not be a public or statutory body. The expression may include an industry regulator possessing relevant powers and a role extending beyond that of ordinary citizens. A new loss requires a material increase in restriction; a measure reducing or merely repeating existing restrictions does not create a further loss.

An arbitration clause referring differences as to amount, where liability is otherwise admitted, operates as an exclusive jurisdiction clause only if its precondition is satisfied when proceedings are commenced.

The claimants, companies in the Arena Racing group, operated racecourses, greyhound tracks, golf courses, hotels and related businesses. Their 2020 material damage and business-interruption policy included denial-of-access cover for action by a competent authority following danger or disturbance.

The insurers admitted some cover but disputed the meaning of competent authority, the operation of the £2.5 million “any one loss” limit, the relevant pandemic measures, and whether later quantum issues fell within the policy’s arbitration clause. The court was determining further preliminary issues after earlier proceedings concerning the same policy and related COVID-19 business-interruption questions.

The central issues were whether the British Horseracing Authority and Greyhound Board of Great Britain were competent authorities; how losses should be counted; which measures constituted new triggers; and whether the arbitration agreement applied after the court had resolved liability and construction issues.

1. Competent authority. The expression was construed objectively from the perspective of a reasonable policyholder with publicly available background knowledge. “Authority” meant a body or person with power and a relevant role extending beyond that of ordinary citizens. It did not necessarily mean a public or statutory body. The ejusdem generis and noscitur a sociis principles did not establish a useful common genus restricting the phrase to organs of the state. The BHA and GBGB therefore qualified, given their industry-wide regulatory roles, licensing powers and ability to cancel or restrict racing. Issue 2 was answered “Yes”.
2. Meaning of one loss. A loss was treated as substantially equivalent to a loss calculation. A fresh insured trigger event causing interruption started a new indemnity period and required a separate calculation. The calculation captured the financial consequences of that event throughout the period during which it affected the business. Individual lost ticket sales, meals, days or races were not separate losses.
3. Facilities. The policy’s division of racecourses, golf courses and hotels into categories with different indemnity periods and aggregate sums insured supported separate calculations for each affected facility. The £2.5 million limit therefore applied per relevant measure or action and per affected racecourse, golf course or hotel. No conclusion was reached for the two claimants whose businesses used facilities operated by other claimants.
4. Relevant measures. A measure or action had to impose or materially increase restrictions on use. The Prime Minister’s 16 March 2020 instruction could constitute an action hindering use, even though it was not a formal prohibition. A measure reducing restrictions, or merely repeating unchanged restrictions, did not create a new trigger. Materiality was a low threshold directed to avoiding purely technical distinctions. Issues 8 and 8A were answered accordingly.
5. Arbitration. The arbitration clause applied only to a dispute solely as to quantum where liability was otherwise admitted. Disputes concerning limits, construction or other policy terms were disputes about liability. The precondition had to be tested when the relevant proceedings were commenced. If the clause did not apply then, it could not become operative later because issues were resolved by the court or further admissions were made. Issue 11 was answered “No”.

This was a first-instance decision determining further preliminary issues. Earlier preliminary-issue proceedings concerning the policy were decided by the High Court in [2024] EWHC 124 (Comm) ; appeals were dismissed by the Court of Appeal in [2025] EWCA Civ 153 . Those decisions formed part of the procedural background but were decisions in the same litigation.