Covid-19 Business Interruption Cover - Group Action Against Non-Payment

Hope of a lifeline for growing number of golf clubs, hotels, restaurants and hospitality companies experiencing rejection of the business interruption claims

After the event (ATE) insurance may provide a lifeline to golf clubs, hotels, restaurants and hospitality companies whose claims against their business interruption insurance during the coronavirus pandemic have been rejected or stonewalled by their insurance providers.

Golf is just one of the many sports affected by Covid-19. For the first time since the second world war the R&A have cancelled this year’s ‘Open’, due to be played at Royal St George’s in July.

While private members-only clubs may be less affected in the short term, the shutdown could have dramatic longer term consequences for the sector, with many clubs and courses starved of their food, beverage and hospitality revenues.

Hersham Golf Club

Hersham Golf Club

Hersham Golf Club CEO Mehmet Arkin said: “As primarily a pay and play club with a small membership, COVID-19 has had a catastrophic impact on our food, beverage and golfing revenues. We cannot furlough our green keeping staff as the golf course requires intensive maintenance and yet we have lost almost 100% of our revenues. We are not eligible for the Government grants and with rapidly dwindling cash reserves we were hopeful that our business interruption cover would give us a lifeline. To our astonishment, our claim was rejected in its entirety”

Action Group
Business Interruption Claims

We Are looking for frustrated business owners to join our action group...

  1. Any business affected by the current Covid-19 lockdown can join the group.
  2. A copy of your current policy will be required which will be reviewed at no cost.
  3. Once enough numbers of Claimants are on board a presentation will be made to the members of the Action Group by the lawyers. Where and how the presentation is made will depend on how the current circumstances vis-à-vis the lockdown evolves.
  4. There is no upper number but there must be a minimum number of 30 members to make the action worthwhile while minimising the financial risk to all members.
  5. Before any litigation is embarked upon funding must be put in place. What form this takes will be dependent on the number of claimants.
  6. The primary object is to ensure that members receive a fair amount of any award or compensation negotiated or awarded by a court. This can only be achieved by having as many claimants on board as possible.
  7. It is becoming clear that insurers will not be paying out on any claims unless they are forced to by legal action.
  8. After the Event (ATE) insurance will also be a major factor in funding arrangements as we want to ensure that the members have the backing of an ATE insurer who believes in the possibility of their claims succeeding enough to indemnify the members against any adverse costs orders.
  9. Any business interested in joining should contact:
  10. Eddie Dervish – Hugh Jones LLP
Hugh Jones

Covid-19 Business Interruption Cover

Evidence is emerging that business interruption insurance, which provides cover for extreme events, is providing little light at the end of the tunnel for leisure and hospitality businesses.

Some, such as restaurateur Raymond Blanc, have been furious at the rejection of their claims, on the basis that COVID-19 is not included in their list of covered disruption events and is therefore excluded.

But there may be hope of a lifeline for these businesses, including golf clubs, via a type of Funded Group Action.

This type of litigation is usually backed by specialist litigation insurers and is known as ATE (After the Event) Insurance. ATE is quite common for other large civil actions, as was the case with the banks after the 2008 financial crisis.

Guardian Legal Services have teamed up with a team of Lawyers including Barristers and a QC from leading Chambers in London to manage multiple claims and take the fight to the defendants.

The team has experienced a flood of enquiries from the hospitality industry, as more businesses experience rejection of their claims. We suspect that many

  •  Golf Clubs
  • Hotels
  • Restaurants 

will be finding themselves in a similar position and may be unaware of their options and we invite enquiries from them. There is no fee for making an enquiry.

Commencing litigation against a large corporation can be daunting and expensive especially after the Jackson reforms of 2014 which has stripped the average SME of the ability to pursue claims against big financial institutions, insurance companies or rich litigants, without risking the loss of a fair chunk of any financial award they may get if they win, let alone what they might stand to lose if they lost the case.

How To Take Action...

Paul Gilbert of Guardian Legal Services Ltd says: “These actions can be run partly on a ‘no win - no fee’ basis although there can be a cost, but the claimants’ costs are protected through ATE if they should lose the case and there is often strength in numbers”.

Anyone who seeks clarification on this matter can contact Paul Gilbert who is available to discuss the matter with them at no cost.