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

Fecha: 22-Jul-2025

The U/Ws’ submissions

116.

The U/Ws start from the position that the Policy provides insurance (in relevant part) against losses of gross revenue to the Business as a whole caused by the operation of the peril in the denial of access extension. They say that a “loss” is not identified (still less calculated) at a single point in time. Instead, one looks to the cumulative effect of the relevant restriction or hindrance on the Business as a whole over the relevant period.

117.

Reflecting the need to look at the financial consequences upon the Business as a whole, the Policy also provides for “Standard Gross Revenue” to arrive at figures which “represent as nearly as may be reasonably practicable the results which but for the Damage would have been obtained during the relative period after the Damage”.Account also needs to be taken of savings, again across the indemnity period.

118.

The U/Ws make a series of points about what are said to be the consequences of the way a loss falls to be calculated, including that:

118.1.

one cannot assess whether there has been any “loss” until the end of the (three-month) indemnity period;

118.2.

the mere cancellation of a race or the fact that it is held subject to certain restrictions does not necessarily mean there has been any“loss”. It could be, for example, that the cancelled race would have been loss-making. Or it could be that, although a particular race happened to be cancelled, that led to pent-up demand, such that many more people came to the next race later in the three-month indemnity period; and as such

118.3.

the Policy is completely different to a fidelity policy, where one can say the certainty that there has been a “loss” if the insured property is stolen.

119.

The U/Ws suggest that the correct approach is:

119.1.

to take as the starting point the relevant interruption or interference with the Business, i.e.the insured peril;

119.2.

for each occasion where the peril operates, to assess whether there has been a reduction in gross revenue attributable to the operation of that peril over the relevant indemnity period. That assessment would take into account savings and any alternative trading; and

119.3.

any such reduction in gross revenue can be characterised as a “loss” and it is capped at £2.5m.

120.

The U/Ws’ position is therefore that there is no justification for applying the limit on a per premises or per affected race basis.

121.

In relation to premises, the U/Ws assert that the Cs’ argument assumes that one should treat different outlets or locations as independent profit centres which are independently insured. However, the coverage is provided for the “Business”, which owns and operates all of the premises and locations.

122.

The U/Ws pointed out that, although some of the Cs operate multiple facilities, most of them do so from a single location. For example, the 11^th Claimant is identified as operating a racecourse and a hotel, but these are on the same site, as evidenced by the fact they have the same postcode. The U/Ws say that it would be meaningless to describe these as separate premises.

123.

Building on that, the U/Ws ask how is one to is supposed to identify a separate and distinct “Premises”. They asked whether a bar located in a physically separate building from the grandstand at a racecourse is to be treated as separate “Premises”.

124.

The U/Ws also say that the alternative trading clause demonstrates that cover is approached by looking at the Business of each insured in the round, including considering whether any other “Premises” have been used to mitigate losses.

125.

In relation to the “per affected race” argument, the U/Ws describe the Cs’ approach as unprincipled and leading to absurd results, in that, if the relevant restriction relied upon resulted in the cancellation of, e.g., a flat race meeting in the morning and a point-to-point in the afternoon, that would result in two losses. The U/Ws asked rhetorically: “why stop there: why not a new loss for every lost ticket sale?”.

126.

Turning to the individual lockdown measures, the U/Ws suggest that the so-called ‘Stay at Home Instructions’ given on 16 and 17 March 2020 did not “prevent or hinder use of The Premises or access thereto”.

127.

The U/Ws next argue that changes to the regulations which involved a reduction in the severity of the earlier restrictions are not relevant measures or actions because they did not prevent or hinder use of the Cs’ premises. Those measures did not impose such restrictions, but rather alleviated them. They say that measures that reduce restrictions are unlikely to have been in the contemplation of the reasonable policyholder when considering denial of access because they would tend to reduce losses, not cause them. They contend for an analogy with the view which Butcher J formed when considering whether similar measures amounted to “occurrences” in Greggs Plc v Zurich Insurance Plc [2022] EWHC 2545 (Comm) (at [86]):

“Nor would I consider that an informed observer would have regarded changes which simply reduced restrictions as being separate 'single occurrences' for the purposes of the definition. They were such as would of their nature be expected to reduce losses not to lead to them and thus would not constitute the type of matter which would sensibly be regarded as a factor unifying different losses.”

128.

For some of the changes to the regulations, the U/Ws say that the changes were trivial and, on that basis, could not count as separate measures or actions. The example discussed with Mr Scorey orally was racecourses going from tier 3 to tier 4, resulting in the owners of horses being excluded when races were run behind closed doors.