Covid: Lockdown-hit bar wins appeal on £1.5m insurance claim

A Welsh bar has won a legal case in an ongoing insurance claim of around £1.5m in compensation, for losses incurred during the Covid lockdowns.

The Court of Appeal ruled the Why Not Bar in Aberystwyth, Ceredigion – which closed in March 2020 – is entitled to pay outs, alongside five other policy holders involved in the test case.

Owner Mark Phillips called it a “tremendous victory” for potentially thousands of owners nationwide, who had a “business interruption loss” clause in the coverage on their premises.

Law firm Hugh James said its clients suffered “devastating” financial losses during the pandemic and called on the insurance companies involved to now compensate those affected.

“We have lost loved ones, struggled financially and my wife has suffered significant anxiety and distress because of this ordeal,” Mr Phillips said of his wife Rhian, a co-owner of the business.

“I’m a working class lad who’s worked my whole life, the Court of Appeal is not just for me, it’s for everybody else.”

The couple were told by their insurers in 2020 there was “nothing they could do” about their Covid losses, he told BBC Radio Wales Breakfast.

He said they brought a case against their insurers, winning a decision in the High Court in June 2023 that was recently upheld on appeal.

He can now make a claim on losses that he says amount to £1.5m.

Senior Associate at Hugh James Erich Kurtz said: “It’s been around three years of sustained hard work and stress for both Mark and Rhian.”

He described the case as an “historic” victory which should give hope to thousands of businesses across Wales and the UK that experienced financial losses during the national lockdowns amid the pandemic.

Mr Kurtz said the insurers argued throughout it was never meant to respond to a “nationwide pandemic”, only localised diseases, but both the High Court and the Court of Appeal has now held that it does.

“The next argument will be to prove that someone was ill whilst at the nightclub or restaurant and if they can show that, it will then move on to how much money has been lost,” he added.

The judgement also involves five other policy holders, including restaurant, catering, fitness and hairdressing businesses, as well as the London International Exhibition Centre.

Mr Phillips’ insurers, West Bay Insurance and QIC Europe Limited, have been asked to comment.