Hiscox Action Group to launch £40m arbitration claim 'within days'

Hiscox offices

An action group of 400 Hiscox business insurance policyholders is to launch an “expedited arbitration claim” against the insurer worth almost £40m.

The Hiscox Action Group is the most high-profile of a number of groups that have coalesced in recent months contesting insurers’ refusal to pay a large number of business interruption claims occasioned by the coronavirus lockdown.

The decision to press on with legal proceedings comes after litigation funder Harbour agreed to underwrite the group action “through whatever legal steps are considered necessary.”

The group is represented by City law firm Mishcon de Reya, which it appointed on 23 April, and expects to launch its claim “within days”.

Simon Ager, who runs a climbing centre in Northampton and is a member of the group’s steering group, said: “Everyone has been working really hard to move this claim forward. For many of our members, this insurance is the difference between survival and bankruptcy, and we are determined that they should get the money they are entitled to as soon as possible.”

Daniel Duckett, another steering group member who owns a patisserie in Belfast, said: “Many of our members have lost out because Hiscox has refused to pay out and forced us to go to these extraordinary lengths to get settlement.

“The insurance provisions of the Enterprise Act (2016) will mean we can now not only recoup the money we are entitled to but also get significant extra payments to compensate us for our additional losses.”

Duckett told Post last week that the group intended to pursue legal arbitration rather than wait for the outcome of a test case being put together by the Financial Conduct Authority.

In discussions with members of the action group, the regulator said it was its ambition to get the case to court by July, fuelling concerns over how long the process would take.

“We do support the action, and it’s good that they are seeking clarity, but unfortunately for us the timeline just it doesn’t work for us or our members,” said Duckett.

In a statement, Hiscox said: “We understand these are difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly. As the FCA has said most UK small business policies across the industry do not cover pandemics. As we have said previously, we welcome all steps to expedite resolution of any dispute and we look forward to working with policyholders to achieve this.”

In a 22 April update to the London Stock Exchange, Hiscox said: “Hiscox recognises these are extremely difficult times for businesses and is determined to help provide greater certainty for customers.

“As a priority it will therefore work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available.”

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