Lloyd’s underwriters facing new BI class action
Certain underwriters at Lloyd’s are being sued in a class action in Australia.
To be conducted in the name of the representative applicant on behalf of group members, the class action is backed by litigation funder Omni Bridgeway and is being jointly run by Gordon Legal and Berrill & Watson. The case involves insured jewellers and gem merchants.
The lawsuit broadly alleges that the refusal to pay out indemnities for business interruption losses caused by the COVID-19 pandemic constitutes a breach of contract. The claim – at the centre of which are policies usually described as jewellers block and multi-perils insurance – is filed as an ‘open class’ proceeding.
“The class action is being funded by Australia’s largest litigation funder, Omni Bridgeway, as a registered management investment scheme in accordance with new funded class action regulations introduced by the Australian government in 2020,” said class action law firm Gordon Legal.
It was noted that Omni Bridgeway would be entitled to a share of any sum received in a successful result, be it an award by a court or an amount paid by way of settlement.
“Assuming that Lloyd’s is found liable to indemnify you under your policy, the policy itself sets out what losses can be claimed and how your losses are to be assessed,” stated Gordon Legal in an FAQ for claimants, “and the court may make rulings about how sections of the policy relating to the calculation of your losses are to be interpreted.”
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QBE: "The allegations will be defended"
QBE Insurance Group has issued a response after being notified of a representative proceeding against its QBE Insurance (Australia) Limited (QIA) operations.
“Those proceedings allege that QIA wrongfully denied cover to certain policyholders during the COVID 19 pandemic for losses arising from business interruption,” noted QBE. “The allegations will be defended.
“The issues raised in these proceedings appear to be substantially similar to those currently before the Australian courts in the second industry test case and QIA’s own Federal Court proceeding against Educational World Travel in liquidation and its liquidator.”
Backed by litigation funder Omni Bridgeway, the new class action is being funded as a registered management investment scheme called “The QBE BII Claim Litigation Funding Scheme (ARSN 650 744 415),” according to class action law firm Gordon Legal which jointly runs the case with specialist insurance law firm Berrill & Watson.
The above, said Gordon Legal, is in accordance with new funded class action regulations introduced by the Australian government last year. The open class action in the Federal Court is on behalf of businesses such as Strand Fitness Pty Ltd.
Meanwhile QBE added: “QIA is committed to applying the rulings of the courts in the industry test cases when assessing claims. QBE is satisfied that its reserving in respect of business interruption claims remains robust.”
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