What routes of challenge are available to an insurer’s rejection of my business interruption claim?
Many policies will only provide business interruption cover if it arises from property damage. The FCA has acknowledged that insurers are entitled to reject claims in relation to such policies, notwithstanding the success of the FCA’s test case in the Supreme Court, and which was generally favourable to policyholders [Insert a link here to our update on the test case]. In other cases the policy wording will be less clear and businesses may legitimately feel that their insurer is wrongly withholding payment.
One route of challenge to an insurer’s decision is via one of the well-publicised class actions. Another route of challenge is by a complaint to the Financial Ombudsman Service (FOS). This service is open to consumers and small and medium-sized businesses, ‘micro-enterprises’, charities and trusts. The service will be an attractive option for many businesses, as it is free and relatively quick (although it remains to be seen how the service keeps up with an increase in demand as a result of the pandemic). You will need to have complained to your insurer before bringing a complaint with the FOS.
Further details can be found here.
Related FAQs
Business operators such as travel operators, hotels and restaurants remain vulnerable to claims of failure to protect against contracting the virus. There is a high chance of claims from employees, clients and members of the public. These are likely to be covered under public liability and employer’s liability insurance.
Remote mediations have become increasingly popular as a way of settling a dispute before it goes to court. There are a number of ways in which you can mediate remotely, but the most common platform is Zoom, due to its easy-to-use nature and the ability to have ‘break-out rooms’. We have answered some FAQs and set out a quick guide to remote mediations below.
What is remote mediation?
- Mediation is a form of assisted negotiation, in which a neutral 3rd party mediator seeks to help the parties resolve their dispute. The process on the day is managed by the mediator and adopts certain key ground-rules. These are that discussions are private and cannot be referred to in court; and the process is entirely voluntary and non-binding, if and until a settlement is finalised. In the current pandemic mediations are now usually conducted remotely by video conference, instead of an in-person meeting.
- The structure of the mediation will depend on the matters that are in dispute. Before the mediation the parties will exchange their views in position papers and prepare a bundle of the key documents.
- Generally the parties will start the mediation in the same ‘room’ as the mediator, where they will be invited to set out their positions. The mediator will then put the parties into ‘break-out rooms’. These rooms serve as your own private ‘room’ which the mediator will join. You will therefore be able to have private discussions with the mediator without the other side being able to hear those discussions. The mediator will go between the ‘break-out rooms’ to discuss a party’s position further in order to attempt to reach a settlement.
- If an agreement is reached, at the end of the mediation the Settlement Agreement will be drafted. The Settlement Agreement works as an enforceable contract. The Settlement Agreement will outline the details of what has been agreed and the intentions of the parties, such as any actions required, payments to be made and appropriate timescales. Each party will sign the Settlement Agreement, which can be done electronically.
- It is not always possible to reach a resolution/agreement by mediation, but the mediator serves as an impartial third party in order to aid the process. If no agreement has been reached, the mediation may still prove useful as it will give you a better understanding of the other side’s position.
What should I do before the mediation to prepare?
- Ensure that you are in an area with minimal distractions. Mediation is a confidential process, so make sure that you are in a private location.
- Ensure that your microphone and camera work and that you have access to the online platform that will be used. We send our clients a link to the website in advance so that this can be tested out.
- Consider any agreed dress code and dress appropriately.
- Have a copy of the mediation bundle to hand, whether in hard or soft copy, and be aware of what documents are in there.
Any tips on what to do on the day?
- Remember to make sure that before you have any private conversations with the mediator you are in your break-out room.
- You may contact the mediator whilst being in the break-out room. On Zoom there is an ‘Ask for Help’ button on the screen. The mediator will then be prompted to join your room.
- Ensure that you inform the mediator if you or others enter/leave the room. It is important that the mediator knows who is present.
- Be mindful of body language and facial expressions as these can appear more enhanced on the screen, and they are easier to pick up in a remote mediation.
- Stay calm and focussed at all times. When you have a dispute it is sometimes tricky to maintain a calm manner, but this is always vital in attempting to reach an agreement.
- When engaging with the mediator avoid any external distractions such as text messages and emails, as it may come across that you are not interested in the process. It is important to pay attention so that you do not miss any dialogue which may be key to any agreement that is reached.
- When you are in the break-out room without the mediator make sure that you take breaks and keep refreshed, as virtual mediations can be tiring.
In our latest “in conversation” webinar we discussed the outlook for the corporate transaction market. Whilst it would be a brave person to predict the future of anything at the moment given current circumstances, we were joined by two organisations who are very well placed to provide their views.
John Laud, Head of Corporate Banking for North and West Yorkshire for Barclays, his colleague Stephen Loureda from their Credit Analysis Team, and Jill Williams, Investment Director of Mercia Asset Management’s Growth Fund, were in conversation with Ward Hadaway corporate partners Adrian Ballam and Jonathan Pollard to share their thoughts about how the ‘new normal’ for the transactions market may look:
- With supply chain and forecast prediction challenges, how will banks and investors determine what represents a sound opportunity?
- How will distressed and opportunistic acquisition opportunities be funded, and what is investor appetite for such opportunities?
- How have seller and buyer pricing expectations been impacted as a result of the pandemic?
- How are funders reacting, and how should ambitious businesses respond to the very low, or even negative, interest rates?
We expect this video to be of real value to those businesses whose plans of buying, selling or investment may have been impacted by the current economic crisis, but who are looking at opportunities to determine how they may shape their futures – #gettingbacktobusiness.
The guidance has confirmed that all remaining employment rights and terms continue while an employee is furloughed. Holiday will continue to accrue during furlough however you may reach agreement with employees on reducing entitlement provided that it does not fall below the statutory minimum of 5.6 weeks per year.
There is no minimum period of notice you are required to give employees of their return, but from a good HR practice point of view you should be speaking to your staff and letting them know what the plan is; giving people a reasonable amount of notice of return will allow them to prepare both practically and psychologically.