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‘The battle goes on to recover money owed to Australian businesses’
Australian businesses that are trying to recover money they believe is owed to them by their insurers for COVID-related losses will continue their fight in the Federal Court next February.
Jerome Doraisamy
Last week, The Honourable Jayne Jagot of the Federal Court of Australia “provided some clarity” around the obligations of insurers to pay policy-holders for losses related to COVID-19 and related government-imposed restrictions, finding in favour of insurers in eight of nine test cases.
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Last Friday’s judgment means, litigation funder Omni Bridgeway said in a statement, that the “significant uncertainty” for individual business owners and operators over whether their policy is likely to cover some or all of the losses they have incurred as a result of COVID-19 and associated government-imposed restrictions “remains unresolved”.
Jagot J’s judgment will “likely” be the subject of an appeal to the Full Federal Court, the funder added.
Omni Bridgeway is supporting the QBE and Lloyds Business Interruption Insurance claims class actions in the Federal Court, which were launched by Gordon Legal and Berrill & Watson on behalf of certain QBE and Lloyd’s policy-holders.
Gordon Legal partner James Naughton, who is leading the class actions, said that such proceedings remain the “best chance for businesses to have their claims heard” and determined in an efficient and timely fashion.
“We continue to believe that QBE and many other insurers have failed to support businesses when they needed it,” Mr Naughton said.
“Most have paid thousands of dollars in premiums for insurance to protect their businesses from downturns resulting from diseases, and yet 18 months later they still haven’t been paid one cent. Many of these businesses are again struggling through lockdowns, while still waiting for payouts that we believe they are entitled to.
“It now appears that further delays are inevitable, as the appeals process plays out over the course of 2021,” Mr Naughton mused.
Berrill & Watson principal John Berrill added: “Regardless of today’s judgment, a final decision in this test case remains a long way off and, even then, businesses will still have to prove they have a valid claim to secure a payment.”
“It’s critical for businesses to get advice about whether they are covered, to gather all the necessary documents about their losses and to lodge a claim with their insurers. What’s really frustrating for Australian businesses forced to wait for money they believe is rightfully owed to them is that in the UK, these arguments were settled in January and businesses are already receiving payments for their losses,” he reflected.
Omni Bridgeway investment manager Kristen Smith concluded: “The battle goes on to recover money owed to Australian businesses who had every reason to believe their insurers had their backs in their time of need.”
