In TKC London Ltd v Allianz Insurance PLC [2020] EWHC 2710 (Comm)  Mr Richard Salter QC (sitting as a High Court Judge) considered the issue of whether issues relating to the COVID pandemic should be a factor in considering a defendant’s application for summary judgment/to strike out the claim.



“Moreover, given the economic effects of the COVID-19 pandemic, it seems to me that there is a public interest in having the issue of whether the Business Interruption section of Allianz’s standard “Commercial Select” policy provides cover determined (if it can fairly and justly be done) sooner rather than later.”


The claimant operates a restaurant business that was forced to close during the “lockdown” period. It was insured by the defendant and part of the policy covered business interruption. The wording of the policy was different to those considered to those considered in The Financial Conduct Authority v Arch Insurance (UK) Ltd and others[2].   The claimant issued proceedings claiming it had suffered loss under the policy.  The defendant asserted that this type of loss was not covered by the policy and applied for summary judgment and/or to to strike out the claim. The defendant’s application was successful.



The claimant contended that this was a test case of some importance and therefore for that reason, amongst others, it was inappropriate to grant summary judgment.


The judge found that it was appropriate to determine the issues at this stage.   The claimant had not identified, specifically, what further evidence would be needed.  It was important that these principles were determined now, given their general importance.

Analysis and conclusions – strike out and summary judgment
    1. The first matter that I must consider is whether it is right for me to resolve any of the issues in this case summarily. The two provisions of the CPR which have been invoked by Allianz in this application are CPR 3.4(2) and CPR 24.2. CPR 3.4(2) gives the court power to strike out a claimant’s statement of case which discloses no reasonable grounds for bringing the claim. Under CPR 24.2, the court may give summary judgment against a claimant on a claim or on a particular issue if the claimant has no real prospect of succeeding on the claim or issue, and there is no other compelling reason why the matter should be disposed of at trial.
    2. It was common ground that the burden of establishing for these purposes that TKC has no reasonable grounds for bringing its claim and/or that it has no real prospect of succeeding on it (and that there is no other compelling reason why the case should be disposed of at a trial) is on Allianz.
    3. There was also no dispute that the relevant principles that the court should apply on applications such as this by a defendant under these provisions of the CPR are those explained by Lewison J in the cases of JD Wetherspoon Plc v Van de Berg & Co Ltd[49] and EasyAir Ltd (trading as Openair) v. Opal Telecom Ltd[50]. The first six of those principles are stated in materially identical terms in both judgments:
The correct approach on applications [under CPR Part 24] by defendants is .. as follows:
i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success ..
ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable ..
iii) In reaching its conclusion the court must not conduct a “mini-trial”
 iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents ..
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial ..
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without a fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case.
    1. In paragraph (vii) of the summary given in the JD Wetherspoon case, Lewison J observed that:
vii) The court should be especially cautious of striking out a claim in an area of developing jurisprudence, because in such areas decisions on novel points of law should be decided on real rather than assumed facts.
In the Easy Air case, however, paragraph (vii) was as follows:
vii) It is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it ..
    1. As I noted in Hall v Saunders Law Ltd[51], there is no tension between these different concluding paragraphs. The issue of whether a case can properly be disposed of without a trial is one of proper case management and procedural justice. In cases where the relevant law is in a state of incremental development or of uncertainty, a court will for sound practical reasons usually be reluctant to come to any final conclusion on the basis of assumed rather than actual facts. However, where a point of law or construction which is not fact-sensitive (or where the court can be confident that it is seized of all the relevant facts) is both short and likely to be determinative of the whole (or at least of a substantial part) of the case, the overriding objective under CPR 1.1(1) of dealing with cases justly and at proportionate cost will usually favour summary determination.
    2. Mr Kealey submitted that his client’s application fell precisely into the category referred to by Lewison J in paragraph (vii) of his summary of the principles in the EasyAir case. Although Allianz formally does not admit all of the factual matters (particularly those relating to causation and loss) that have been pleaded by TKC, Mr Kealey accepted that, for the purposes of the present application, the court must assume the correctness of almost all of those pleaded factual matters. The one exception (in Mr Kealey’s submission) is TKC’s assertion that deterioration of its stock itself caused any loss of business – an assertion which Mr Kealey submitted is plainly without substance.
    3. Mr Kealey submitted that, that assertion apart, there can be no real dispute about the relevant overall background and legislative history, the details of which are helpfully set out in paragraphs [10] to [60] of the judgment in the FCA test case. In Mr Kealey’s submission, this application involves short points of policy construction, in relation to which the court can be satisfied both that it has before it all the evidence necessary for the proper determination of those issues and that the parties have had an adequate opportunity to address those points in argument.
    4. Mr Marland disagreed with these submissions, and argued that this was not a case that was suitable for summary determination. He emphasised that, of the three possible limitation to the scope of “all risks” cover identified in the Law of Insurance Contracts[52], the only one that was potentially relevant was the “practical limit to those risks to which the particular subject-matter in its particular location is exposed: thus limits on the range of risks are usually built into the risk situation or to the insurance industry’s understanding of the situation”. Mr Marland submitted that, at present, the court has no or no proper evidence before it of “the risk situation or .. the insurance industry’s understanding of the situation”. These are matters, according to Mr Marland, which call for evidence (which would likely be expert evidence), none of which is presently before the court. Mr Marland accepted that this would have to be evidence of the situation at the time of the placing of the insurance, which predates the current COVID-19 pandemic. However, in Mr Marland’s submission, this is not the first pandemic, or even the first pandemic this century, to have insurance implications.
    5. Mr Kealey’s answer to this submission was to repeat that Allianz’s application assumes the correctness of all save one aspect of the factual matters that have actually been pleaded by TKC as being relevant to the issues of interpretation of the policy. He drew attention to paragraph C1.3(h) of the Admiralty and Commercial Courts Guide, which specifically provides that:
Where proceedings involve issues of construction of a document in relation to which a party wishes to contend that there is a relevant factual matrix that party should specifically set out in its statement of case each feature of the matrix which is alleged to be of relevance. The “factual matrix” means the background knowledge which would reasonably have been available to the parties in the situation in which they found themselves at the time of the contract/document.
He also pointed out that TKC has not identified in any evidence any particular additional fact or industry custom or understanding that it would wish to plead and rely on. Nor has any such material been identified by Mr Marland in his submissions.
    1. In my judgment, Mr Kealey has the better of this aspect of the argument. If particular facts are relied on by a party as being relevant to the interpretation of a document, those facts must be pleaded. That is so that they can be specifically responded to, whether by admission or denial, and can (where necessary) be established and/or challenged by evidence. It is also so that the court can know with certainty what each party relies on as the relevant elements of the “background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”.
    2. Nevertheless, at this early stage in an action, the court will often give a party that has failed to comply with its obligation to set these matters out in its statements of case an opportunity to correct that deficiency by a suitable amendment. Furthermore, when considering an application for summary judgment, the court will take into account not only the evidence actually placed before the court on the application, but also any other relevant evidence that could realistically be expected to be available at trial. As Moore-Bick LJ said in ICI Chemicals & Polymers Ltd v TTE Training Ltd [53] (quoted by Lewison J at the end of his principle (vii) in EasyAir):
Sometimes it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial. In such a case it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success ..
However, as Moore-Bick LJ went on to say:
.. it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction ..
    1. In the present case, Allianz’s application was issued more than three months before it came on for hearing. That period has given TKC ample opportunity to identify any particular additional matter that it would wish to rely on in support of its case as to the interpretation of these provisions. It has not done so, but instead simply asserts that expert evidence is required, without giving any indication of what it hopes that that expert evidence would actually say. Yet, in the nature of things, these sorts of facts are not generally things that can be exclusively within the knowledge of insurers and insurance industry experts. To be admissible as relevant to contractual interpretation, a fact has to be part of the background knowledge that was reasonably available at the time of contracting to both parties, not just to one of them.
    2. It also seems to me that the passage from the Law of Insurance Contracts on which Mr Marland relies does not, on the facts of this particular case, support his claim that expert evidence is required in order to construe the Policy. That passage is concerned with “the practical limit to [the] risks to which the particular subject-matter in its particular location is exposed”. However, it has not been suggested that there is anything exceptional or unusual – at least from an insurance point of view – about the business carried on by TKC at The Kensington Crêperie. Nor, in the light of the decision in the FCA test case that most (though not all) of the ‘disease clause’ extensions in the sample of policy did provide cover in the circumstances of the current COVID-19 pandemic, can it realistically be suggested that those circumstances were wholly outside the “insurance industry’s understanding” of the risk situation (and Mr Kealey has not sought to do so).
    3. In my judgment, this is therefore a case in which, contrary to Mr Marland’s submissions on behalf of TKC, I can be confident that I have available to me all the evidence necessary for the proper determination of the issues of interpretation of the Policy which fall for consideration on this application.
    4. There is, nevertheless, a second limb to Mr Marland’s argument that this case is unsuitable for summary determination, which is that it potentially has wider significance. In Mr Marland’s submission, the fact that this is a standard form policy wording in widespread use provides a compelling reason why the issue of whether it provides cover in the circumstances of the present COVID-19 pandemic is unsuitable for determination without a full consideration of the underlying facts and full exploration of the issues at trial.
    5. In support of this submission, Mr Marland relied upon the observations of Etherton LJ in AC Ward & Son v Catlin (Five) Ltd[54]. That case, like the present, involved an application by an insurer for summary judgment against a claiming policyholder. At first instance, HHJ David Mackie QC had dismissed the defendant insurer’s application. The Court of Appeal dismissed the insurers’ appeal from that decision, holding that the claimant policyholder “has a real prospect of successfully contending that its interpretation gives the Policy a more reasonable commercial meaning and one more likely to be that intended by the parties”[55]. Etherton LJ (with whom Wilson and Sullivan LJJ agreed) then went on to observe that:
I agree with the Defendants that neither the Claimant nor the Judge has articulated clearly any evidence relevant to interpretation which is likely to exist and, although not available on the hearing of the Application, can be expected to be available at trial. Had this been the only ground for dismissing the Application, it would not, in my judgment, have been sufficient .. [H]owever, as I have said .. it is apparent from paragraph [46] of the Judgment that the Judge’s decision included the arguability of the Claimant’s submissions on interpretation.
Furthermore, I bear in mind that the Warranties are standard terms of the Defendants’ Multiline Commercial Combined Policy, which may affect many other policyholders, and that provisions in the Warranties .. are said to have even wider currency in the insurance market. In those particular circumstances, combined with the arguability of the Claimant’s points on interpretation, I can understand why the Judge considered it would also be appropriate to give the Claimant the opportunity to seek and adduce any relevant and admissible factual material available by the date of the trial.[56]
    1. As Lewison J recorded in his EasyAir principle (vi), the court will always be conscious of the practical limitations of the summary judgment procedure. As Mummery LJ observed in Doncaster Pharmaceuticals Group Ltd v The Bolton Pharmaceutical Co 100 Ltd[57] (a case cited by Lewison J):
.. there can be more difficulties in applying the “no real prospect of success” test on an application for summary judgment .. than in trying the case in its entirety .. The decision-maker at trial will usually have a better grasp of the case as a whole, because of the added benefits of hearing the evidence tested, of receiving more developed submissions and of having more time in which to digest and reflect on the materials.
The outcome of a summary judgment application is more unpredictable than a trial. The result of the application can be influenced more than that of the trial by the degree of professional skill with which it is presented to the court and by the instinctive reaction of the tribunal to the pressured circumstances in which such applications are often made ..
  1. However, this is not a case of the type which Mummery LJ was there considering. The Skeleton Arguments lodged on both sides for this application were lengthy, well- reasoned, and contained a full citation of authority. The hearing by video-link before me was largely free of technical problems and lasted a full day. I am therefore satisfied that both parties have had an adequate opportunity to address the relevant issues in argument.
  2. Moreover, given the economic effects of the COVID-19 pandemic, it seems to me that there is a public interest in having the issue of whether the Business Interruption section of Allianz’s standard “Commercial Select” policy provides cover determined (if it can fairly and justly be done) sooner rather than later. That circumstance distinguishes the present case from the situation considered by the Court of Appeal in the AC Ward & Son case, where the issues being considered, while of some general significance, were not of immediate and pressing importance to other policyholders, and where the court’s decision was handed down less than two months before the date fixed (subject to the outcome of the appeal) for the trial of the action.
  3. In my judgment, it would therefore be in accordance with the overriding objective for me now to deal with and to decide, so far as I am able, the issues of interpretation raised by Allianz’s application.



The defendant’s construction was preferred and the claimant’s action struck out.


    1. In his Skeleton Argument for this application, Mr Kealey said that:
Allianz is acutely conscious of the fact that the coronavirus pandemic has had a severe impact on many of its policyholders, including those such as TKC which operate in the hospitality sector. It has every sympathy with those affected .. Allianz also understands that policyholders with [Business Indemnity] cover will naturally wish to explore the question of whether or not it responds to the losses that they have suffered. Equally, however, it is vital for the functioning of such insurance and for the benefit of policyholders with valid claims that Allianz should only pay claims in cases where the policy requirements are satisfied, and not otherwise.
    1. In the present unprecedented circumstances, it is impossible not to share that sympathy. Some readers of this judgment may therefore have the instinctive reaction that an “all risks” business interruption policy such as this ought in justice to provide cover to SMEs such as TKC against the significant damage to their businesses caused by government measures such as the Coronavirus Regulations, which have been implemented for the benefit of everyone but which have had their most damaging effect on particular sectors. Some may also argue that the common law should therefore change its approach to such policies, and should adapt its principles of contractual interpretation and implication to the present unprecedented circumstances, so that they assist in transferring the burden of the present emergency to those, such as insurance companies and other major financial institutions, who may perhaps better be able to bear it.
    2. However, as the authors of the BIICL Concept Note “Breathing Space”[67] wisely observed:
In times of uncertainty, the law must provide a solid, practical and predictable foundation for the resolution of disputes and the confidence necessary for an eventual recovery ..
Contractual rights are to be evaluated by applying settled principles to the contract in question. Legal certainty remains paramount and gives the surest basis for resolution ..