FBD must cover losses of pubs due to early closing rules

Fbd Must Cover Losses Of Pubs Due To Early Closing Rules
High Court judgment has implications for payments to as many as 1,000 pubs across State. Photo: PA Images
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Aodhan O'Faolain

Three Dublin pubs that brought Covid-19 business interruption test cases against insurer FBD are entitled to be indemnified for losses suffered since August 2020 as a consequence of early closing requirements imposed by the Government, the High Court has ruled.

The three pubs affected are: Aberken, trading as Sinnott’s Bar; Hyper Trust Ltd, trading as The Leopardstown Inn; and Inn on Hibernian Way Ltd, trading as Lemon & Duke.


A fourth pub, Sean’s Bar in Athlone, a wet pub, is also entitled to be indemnified for closures between March 15th, 2020 and October 7th that year, the court held, and subsequently to June 2021.

Mr Justice Denis McDonald made that and other findings in a judgment on Friday. The ruling has implications for the amount of compensation to be paid by FBD to hundreds of pubs and restaurants across the State affected by the closures and restrictions imposed.

The High Court on Friday clarified certain issues raised in the four publicans' ongoing test actions over FBD's failure to pay out on business disruption claims caused by the pandemic.


The issues relate to the quantum of losses sought in actions brought by the plaintiffs, with the level or quantum of damages to be awarded to be determined at a later date.


In his decision earlier last year, Mr Justice Denis McDonald found that a policy sold by FBD covered losses pubs sustained by having to close due to the pandemic.

In a subsequent judgement, the judge ruled on what interpretation should be applied to the term 'closure' within FBD's Public House Policy of insurance, which is relevant to quantifying the losses.

He found that the word closure is not confined to a total shutdown of the insured properties premises but extends to a closure of part of the premises.


Several issues regarding quantum arose between the parties which Mr Justice McDonald said required to be clarified by the court.

The court considered evidence and submissions from the parties on the partial closure of the public houses at certain periods during the pandemic, staff costs, late payments, trends and circumstances, underinsurance, and the costs of capital expenses.

The payment of wages to staff when the premises were closed, partially re-opened and the bars' costs of retaining staff were further considered.

The relevance of the evidence varied from pub to pub, the court noted.


One example was that the issue of partial closure was not relevant to Seans Bar as it had remained closed from March 2020 to June 2021.

In a lengthy and detailed judgement regarding these matters of dispute, Mr Justice McDonald noted the extensive efforts made by the parties to address the issues regarding the quantum of the losses.

In relation to those issues that remain outstanding the judge encouraged the parties "to make every effort to seek to resolve the outstanding issues between them".

If the parties engaged constructively, he added, then many of the outstanding issues "can be resolved without the need for further court hearings." The Judge welcomed that progress had been made between FBD and certain pubs in relation to certain issues.



Among his findings the judge said that the Dublin pubs were subject to an early closing requirement in the period from 10th August 2020. That constituted a government-imposed closure because of outbreaks of Covid-19, he said.

Under the policy of insurance, the judge said that Dublin pubs are therefore entitled to be indemnified in respect of the losses suffered by them during the relevant periods because of the early closing requirements in place from time to time since August 10th, 2020.

He also concluded that, for the duration of the relevant periods, the bar counters of the three Dublin pubs were subject to a government-imposed closure in response to outbreaks of Covid-19.

The Dublin bars, he added, were entitled to be indemnified in respect of their losses during the relevant periods between June and September 2020 and in December 2020.

The losses under that specific heading are to be calculated in accordance with a methodology reflecting their individual circumstances outlined by the court.

The judge added that he was prepared to consider any workable amendments to that methodology agreed by the parties.

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With regard to the staff wages and salaries claims, each of the claims made by Sean’s Bar, Sinnotts and Lemon & Duke have been successful in part, the judge said.

In the case of the Leopardstown Inn, the court was unable, considering the evidence put before the court, to make a finding that any part of its claim on that issue should succeed.

He said that all the court could do in its case was ask the parties to liaise to see if any agreement can be reached in relation to any staff who were retained on its payroll when it was necessary to do so. The judge also concluded that FBD is not entitled to pursue any issue in relation to underinsurance.

The case will return before the court next month.

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