Law firm Gordon Legal has filed suit in Federal Court against Lloyd’s of London underwriters and filed a class action lawsuit against QBE in Australia for business interruption (BI) claims related to the pandemic, according to the Australian Financial Review reports.
Gordon Legal says the cases involve claims from various businesses, including gyms, cafes and jewelers, which have been affected by government-imposed lockdowns.
QBE and Lloyd’s Market have already been required by law to meet their claims obligations on certain BI policies in the UK, following the High Court ruling on the FCA test case.
But with many policyholders still on payment, it was expected that a wave of large-scale pandemic litigation would soon be directed against insurers.
In Australia, courts last week ruled against a Suncorp appeal hearing over BI payments, and a second test case is planned to clarify the wording of the policy for a number of small businesses.
However, speaking to the Australian Financial Review, Andrew Grech, partner of Gordon Legal, said test cases alone would not be enough to resolve policyholder coverage issues, and argued that class actions were a tool. necessary step to obtain legally binding verdicts.
He said the class actions would also consider separate issues, such as the notion of collateral losses that may have resulted from an insurer’s initial refusal to pay a claim.
“This will be very important for a number of companies in this difficult situation,” Grech told the publication.
Gordon Legal’s partner estimates that customer losses could potentially reach hundreds of millions of dollars. Of the 700 complaints BI that his company received from customers, about 25% involved QBE and more than 50 complaints involved Lloyd’s.
According to FCA data, QBE was among the slowest insurers to resolve BI claims following the UK test case decision, with Hiscox and MS Amlin considered the worst offenders.