CL-2023-000064 - [2025] EWHC 1870 (Comm)

As such, I agree with much of the chain of reasoning put forward by the Cs, but part company with them before we reach the end of that chain. It seems to me that they are right to say that one is concerned to identify a trigger event – the operation of an insured peril – which results in interruption or interference with the business. But once that has been identified, the loss calculation will seek to capture all of the financial consequences of that insured peril, continuing until it ceases to have an effect, or the maximum indemnity period comes to an end.

I accept, having regard in particular to Unipolsai, that the interruption or interference, and perhaps also the preventing or hindering of use which causes that interruption, might not commence until the point at which the premises would otherwise have been used. If the action by the authority prevents access to the premises from 1 April 2020, but they would not have been used in any event until 1 May 2020, it is arguable that there is no actual preventing or hindering until 1 May 2020 and hence that the relevant trigger event occurs on, and the loss calculation runs from, that later date. However, it does not seem to me to follow that, if the premises would have been used on 1 May, and then again on 8 May, and access to the premises continues to be prevented by the authority throughout that period, that the initial trigger event ceases to have effect on 2 May and there is a new loss starting on 8 May.

At the risk of repeating myself, this seems to me a misunderstanding of how the “Indemnity Period”, and hence the loss calculation, operates. The “Indemnity Period” is “the period from the time the Damage occurs until the results of The Business cease to be affected by the Damage but not exceeding the Maximum Indemnity Period stated in The Specification”. Ignoring the maximum indemnity period for now, in the context of physical damage, as I have explained, the loss calculation would compare past and present gross revenue until that physical damage ceased to affect the results of the business. In my example above, if a restaurant at a racecourse was damaged by fire, the loss calculation would run from the date of the fire until the damage stopped affecting gross revenue. Nobody would suggest that the fire damage stopped affecting the gross revenue at the end of each race meeting, such that a new indemnity period begins when there is a further race meeting the next day or the next week. On the contrary, the only relevant “Damage” would be that fire damage, which would continue to affect the results of the Business at least until it was repaired.

It seems to me that the parties would expect the prevention of access extension to operate in much the same way. If the police were to instruct that a particular stand could not be used as a result of some local danger or disturbance, and that instruction were to remain in place for several weeks or months, there would be a single trigger event and a single loss calculation comparing past and present gross revenue over that period of weeks or months, even if the impact on the present gross revenue happened to be felt more keenly (Footnote: ⁶) on particular days when there would have been races, rather than evenly across that period.

To the extent that the Cs’ argument to the contrary amounted to a technical point about the triggering of an insured peril in the context of a prevention of access extension, my answer is that reading “the Damage” in the definition of the indemnity period as referring to the triggering of an insured peril is intended to make sense of that wording, and to bring it into line with operation of the indemnity period in the context of physical damage. It is not intended to make a nonsense of it, or to cause it to operate in a completely different way.

If the Cs were correct that a temporal break in their need for the premises results in the commencement of a new indemnity period and hence a new loss calculation, I struggle to see why they stop at subdividing by reference to individual races or race meets. Why is each new day at the golf course, or each meal service at the restaurant, not a new loss? The answer Mr Kramer gave was that it was a question of degree, which he acknowledged was not attractive. He said that there was a difference between a restaurant operating each day and a racecourse holding a festival one month and then nothing at all until the following month. I struggle with the idea that deciding whether something is a new “loss” depends on taking a view of the extent of the temporal break. That would be much more subjective and uncertain than asking whether there had been a new trigger event, such that there was a new indemnity period and a need to start a fresh loss calculation.

For completeness, I observe that the case on which Mr Kramer primarily relied for his “no loss until there is interference” analysis, Unipolsai, actually seemed to me to confirm that, once you have a trigger event resulting in interference, that loss continues as a “single individual loss” until the trigger event stops having any effect, rather than there being further separate losses suffered day by day. That is probably the authority which bears most directly on this issue and it points firmly away from the Cs’ “day by day” approach to business interruption losses.