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

At first sight, one might equally ask where in the Policy the Cs find the idea that a separate loss is felt at each individual facility, assuming that multiple facilities are affected in exactly the same way by a single “action” by an authority. The definition of “the Business” would appear to embrace everything which an individual insured (i.e. each of the Cs) might ever do, from running horse races to holding car boot sales. The “Premises” are similarly widely defined, as anywhere owned, occupied or used by an insured. As I have indicated, the indemnity appears to be calculated by reference to the (past and present) revenue from the whole of the Business. There was a clause which provided in certain circumstances for the trading results to be ascertained by looking separately at each “department”, but there is nothing equivalent for different facilities or different premises.

Building on this, the U/Ws’ best point, I would suggest, was their rhetorical question: “why stop there?”. If the impact on the “Business” of an insured can be subdivided into different losses by reference to different parts of a single site, why stop at dividing into three (racecourse/ hotel/ golf club) to arrive at three losses? Why not subdivide further by reference to the various bars at the racecourse, or subdivide the bar from the restaurant at the hotel, or the bar from the pro-shop at the golf club? By way of more specific example, it is agreed that the 4^th Claimant’s racecourse at Fontwell Park has eight food and drink outlets: why not treat each of these as a separate “Premises” which are to be the subject of a separate loss calculation and hence a separate loss?

The Cs’ answer was the Spreadsheet. They said that the parties had deliberately chosen to divide up these BI risks by reference to (a) racecourses (b) hotels and (c) golf clubs, and that it is clear from this that they were intended to be treated separately when one performs a loss calculation. As I have explained, Mr Scorey insisted that I could not make any assumptions about the role of the Spreadsheet, or anything like it, in the placement of the Policy.

I have accepted that I need to be cautious here, because there has not been a complete investigation of the factual position. Fortunately, it does not seem to me that I need to go further than to say that (as was clearly common ground before the Court of Appeal) the parties can be seen to have divided up their facilities so as to separate racecourses/ tracks from golf courses and from hotels, with different maximum indemnity periods applying to the three different types of facilities, and their estimate gross revenues also being divided up (so that each can be included in a different aggregate amount), rather than treated as part of a single “Business” for each of the Cs.

With that in mind, it is helpful to consider how the loss calculations would be performed if (reverting back to the base case of BI consequent upon damage) both a racecourse and a hotel operated by one of the Cs were damaged by the same fire. On the basis that different maximum indemnity periods would apply to different types of facility (see for example paragraph 48 above), it seems to me that it would be necessary to have a separate loss calculation for each of the facilities, using a maximum indemnity period of 12 months for the racecourse and 36 months for the hotel. As I have said, I suspect that the limit of liability is intended to be arrived at by reference to a declared turnover figure for the particular facility, but, even if I am wrong about that, the aggregate figures are undoubtedly separate for the different indemnity periods. It follows that, as a matter of legal analysis, the applicable limit would be different for the racecourse as compared with the hotel, even if it is hard to imagine the aggregate limit ever being reached as a result of a single example of physical damage.

The need to perform separate loss calculations for different facilities in the event of physical damage causing BI makes clear that it is not an answer for the U/Ws to say that each of the Cs only has one “Business”, and hence any fall in revenue would have to be captured in a single calculation, even if referable to different facilities with different maximum indemnity periods. As it did in Greggs, that argument based on the wide definition of the “Business” ultimately proves too much. It can be seen to produce the wrong answer in one context, which undermines one’s confidence in its usefulness more generally.

If a separate loss calculation for each affected facility is going to be necessary when performing loss calculations for “ordinary” BI cover, one might expect the same to be true when the denial of access extension operates. If an action by the police prevents the use of both the racecourse and the hotel, the starting point is that one would expect to see the same number of loss calculations as when the same fire caused physical damage to both. I accept that, in the context of limb (b) of the denial of access extension, the maximum indemnity period is limited to 3 months regardless of the nature of the facility. But that does not affect the fact that, absent some suggestion in the wording to the contrary, one might anticipate that the subdivisions would be the same for damage and non-damage BI. Nor, perhaps more importantly, can it be ignored that the only way to apply the aggregate limits in the event of a number of facilities being affected during the policy year would be to carry out separate calculations for the each of the different facilities. If one simply arrived at a single loss figure for the indemnity payable to Lingfield Park Limited (Claimant 12) in respect of the Business covering the racecourse, the hotel and the golf course, against which of the aggregate limits would that single loss figure be applied?

Turning to the authorities, the decision of Butcher J in Stonegate is instructive, even though he was counting “trigger events”, rather than “losses”. He arrived at different answers to the same question – i.e. whether (at the risk of oversimplifying it) one multiplies the number of Government instructions by the number of premises – for the two different formulations of denial of access cover with which he was concerned. In doing so, he illustrates the importance of the precise wording of the “trigger”, such that there is one result if the trigger “is the actual closure of all or part of an Insured Location” and another if it is “advice or actions from a relevant authority which prevents or hinders the use of or access to “Insured Locations””. In the first, the emphasis is on the “Insured Location” (singular); in the second it is on the “advice or actions”.

Carrying out the same exercise with paragraph (b) of the denial of access extension in the Policy, it seems to me that much depends on how one reads the repeated reference to the defined term “The Premises”. As well as being defined in very wide terms, that word “premises” has an identical singular and plural form, so we appear to be deprived of the assistance provided in Stonegate by that distinction between “an insured location” and “insured locations”. I accept that one could read those references as always meaning each and every one of the places owned or used by the relevant insured. But my own reading is that each is a reference to the same physical place: i.e. somewhere which qualifies as one of “the Premises”, without necessarily being all of them.

In particular, when the denial of access extension says in its opening words “…interruption of or interference with The Business carried on by The Insured at The Premises”, I suggest it means the Business as carried on at the particular place the use of which (for the purposes of paragraph (b)) has been prevented or hindered by the action of the relevant authority. After all, if it meant the Business carried on at each and every place occupied or used by the insured, it would be meaningless and circular; amounting to saying “…interruption of or interference with The Business carried on by The Insured at [wherever the Insured carries on the Business]”. The reference in those opening words to the place at which the Business is carried out does not seem to me to be mere verbiage. The essence of this extended cover is denial of access, not just actions by the police and others which happen to interfere with the insured’s business.

The wider reading of “the Premises” in paragraph (b) would mean that, if the action affected the use of some other location owned or used by the insured (e.g. because of an impact on the insured’s brand), despite there being no actual prevention or hindering of the use of the specific building which happened to be within a one mile radius of the danger or disturbance, there would still be cover. It seems to me obvious that the idea behind the provision was that the danger or disturbance needed to be within one mile of the specific place the use of which was being prevented.

In order to make it work as intended, therefore, one needs to read the two references to “the Premises” in paragraph (b) as referring to the same physical address. That being so, I suggest that it is also logical to understand the reference to “the Premises” in the opening words of the denial of access extension as meaning the same address.

I do not see any difficulty with reading “the Premises” in this narrower way: i.e. as meaning the specific one of the properties occupied or used by the insured which happens to be relevant in that particular context, rather than meaning all of them. To give another example of this, the words “elsewhere than at the Premises” in the Alternative Trading clause must mean elsewhere than the particular premises where the Business has been interrupted. After all, any location where goods were sold or services were rendered by the insured or others on their behalf would qualify as “the Premises”. But that wide reading would make it impossible for the Alternative Trading clause to operate; there never could be any alternative trading as described in the clause, because it would be impossible for the insured to sell goods or render services somewhere other than at a place which they are using for that purpose.

For these reasons, I would read paragraph (b) as concerned with the prevention or hindering of use by the insured of a particular physical location which is within one mile radius of a danger or disturbance. In other words, it means affecting the use of “an” or “the” insured location (singular), not any and all insured locations (plural). Following Stonegate, that suggests that there will be a separate trigger event when each different physical location is affected in this way, even if they are affected by the same action. For the reasons I have already given, it seems to me that there is a high degree of overlap between a “trigger event” and a “loss” or “loss calculation” here. The trigger event is the “Damage” which starts the indemnity period and hence necessitates a new loss calculation.

I have also suggested that there will be a high degree of overlap between the number of “losses” and the number of “claims”. I acknowledge that an insured might choose to bring a “claim” which comprised several losses. But, in Corbin & King and International Entertainment Holdings, the insureds had an incentive to bring as many “claims” as possible, in order to take the benefit of multiple limits. In that scenario, it is difficult to see why the insured would not make a separate “claim” for each separate “loss”.

I have already explained why those cases strongly suggest that, if there is denial of access to two different geographical locations, there will usually be two separate “claims”, even if the originating cause of the denial of access is a single incident or action. See generally paragraphs 147- 151 above. I draw attention in particular to Males LJ’s rejection of the argument premised upon a wide definition of the Business in International Entertainment Holdings.

The U/Ws would point out that arguments about geographical separation work better for the few among the Cs who own facilities which are in different postcodes, as opposed to (say) a racecourse, hotel and golf course on the same large site. However, once one recognises the need to distinguish between different facilities owned by the same insured if there is a sufficient degree of geographical separation, the U/Ws find themselves on a slippery downhill slope. What degree of separation is required?

There is an analogy to be drawn with the observation made by Males LJ in International Entertainment Holdings at [51]: “So far as the policy was concerned, therefore, it was a matter of happenstance whether any particular subsidiary owned or operated more than one venue. To interpret the policy limit as applying separately to each policyholder rather than to each premises, when there is no clear wording to show that this was intended, would therefore be somewhat capricious”. In our case, the Policy reveals that the parties are dividing up their venues for the purposes of the BI cover into three sets – apparently made up of racecourses, golf courses and hotels respectively – regardless of the extent of geographical separation between them. That being so, it would seem capricious to interpret the policy limits as operating differently depending on geography. There is no sign that that was what was intended.

As such, I conclude that the “any one loss” limit is intended to apply per premises or facility; i.e. per racecourse, hotel and golf course, following the way in which the parties have in fact divided up such facilities for the purposes of identifying maximum indemnity periods and aggregate sums insured (as to which I make no finding).

It is presently unclear to me how this logic would operate for the two claimants who are said to use, in effect, the facilities of the others (i.e. the 21^st and 22^nd Claimants). I do not understand enough about how their businesses work, or how losses were suffered, to feel confident about expressing a view as to whether there would be a separate triggering event and a separate loss calculation for every place at which they operate. It is not clear how they are dealt with on the Spreadsheet and, more importantly, I do not know into which aggregate figure(s) their estimated gross revenue is said to fall. If it was not divided across the different categories of facilities, that might suggest that the parties intended a different approach to loss calculation to apply to those Claimants.

Mr Kramer suggested that I put those two insureds to one side for now and accept that more information would be needed before any useful conclusions can be reached about how the “per premises” analysis ought to operate in their cases. I am going to accept (gratefully) that suggestion and make no findings about them, save as flows inevitably from what I have already said.