Disclaimer: This is not legal advice. The information provided here is for informational purposes only. We are not lawyers. You should always consult with a qualified legal professional for advice regarding your specific situation.
As Featured on BBC News: Holding NFU Mutual Accountable in the COVID Class Actions
Below, you can see a BBC News feature for which we provided an interview.
A transcript of the interview is provided at the end of this blog to support the needs of people with additional needs in accessing the information in the BBS report.
NFU Mutual is currently defending at least two major group actions, commonly called class actions. these relate its treatment of it policyholder members for denial of coverage around the pandemic. They have filed to come to court yet to attend to this issue, despite FCA expectations they attend urgently to these matters and proceedings being being begun against them years ago. The pandemic began over half a decade ago.
There is a useful summary of the situation on the NFU Mutual Wikipedia page, under the heading “controversies.”
These relate to how it has treated businesses it was insuring for interruption during the pandemic.
The lawyers bringing the cases, and the business instructing them, say NFU Mutual has seriously mishandled this area and owes very substantial sums in respect of claims it has refused to honour , but in fact should have done.
Sign at NFU Mutual Head Office, in the village of Tiddington, Warwickshire
We recently contributed to a BBC Midlands news item about this and are a party to one of these cases, seeking remedies on behalf of ourselves and what is understood to be thousands of other businesses: NFU Mutual has not confirmed how many businesses may be affected, and has omitted to particularise this in its accounts, despite being requested to do so by a number of the members (who in the case of a mutual own the business) and to whom the directors and executives are ultimately directly accountable.
We know there is a lot of interest and a desire to find the help they need among policyholders, and a great sense of urgency due to the time-limited nature of these actions.
The strategic obfuscation and delay tactics employed by certain insurers in this category of cases have led to public accusations by legal professionals that allege that insurers are deliberately:
- seeking to run down the clock,
- exhaust the financial resources of businesses, or
- drive them to ruin,
so that the claim expires along with the business.
This, in effect, serves to guillotine the rights of policyholders to receive the support they paid for, expensively, and in good faith.
The purpose of this blog is to assist people researching if this situation is relevant to their small business, and to support them in finding the next steps in protecting their interests in a cost-effective way.
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A number of insurance companies, of which NFU Mutual is a prominent example, have been accused of deliberately seeking to run the clock down on legal claims, thereby guillotining the rights of policyholders to get the support they paid substantial sums for over very long periods of time in many cases, in good faith.
For a large number of customers of such businesses as NFU Mutual, the feeling is immense disappointment in insurers like NFU Mutual.
Back in 2020, when the pandemic began, NFU Mutual justified its initial refusal to pay any policyholders at all by stating:
“customers will not be covered for Coronavirus… as a Mutual, one of our duties to our members is to remain solvent.”
This stance placed NFU Mutual’s own financial interests above its members’ needs.
They did this during a time of crisis.
It is also a position that has been repeatedly and increasingly found to be wrong.
NFU Mutual has had to retreat from it several times already (such as in their handling of cancelled advance bookings, and for some policies that have already responded and paid out).
It has been a source of sustained criticism in Parliament and the press.
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‘Class’ Action (Group Action)
This group action:
is about bringing accountability for the wider good of all the people they have let down and mistreated.
The difficulties NFU Mutual is now in do not stem solely from the initial refusal to pay out.
They also emerge from the way in which they have treated their long-standing members, resorting to bullying and unethical behaviours in an attempt to intimidate and punish policyholders bringing this case.
We are only too aware of the huge and, in some cases, devastating effect the dreadful handling of these matters by NFU Mutual has had on the welfare of its members.
This is an impact that NFU Mutual well understands, as evidenced by a May 2020 podcast in which Nick Turner (at the time, sales and agency director, and subsequently CEO) stated that the company would face challenges with its reputation and relationships, saying:
“Trust is important everywhere in insurance… If you haven’t written a policy wording very precisely to protect the insurance company and bring clarity to the consumer, then that is where the problems lie… We will have to work to renew trust with certain customers [who may have been let down], it will be challenging this is going to run and run… if [the issues around policies we have sold have put policyholders] into incredibly difficult positions or even administration, nothing is going to put a smile on [their] face.”
Turner accepted that policyholders not receiving business interruption payments they might in fact be owed could impact their welfare and cause major wrongful commercial damage, a perspective reiterated by chairman Jim McLaren in another podcast, who said:
“And you mentioned mental health and it’s a crucial area and one that’s often overlooked other than by those who are suffering from real mental health challenges. And again, the Mutual recognises that.”
The Heart of the Matter: Why This Lawsuit is Happening
There was a landmark Supreme Court ruling in January 2021.
This found in favour of policyholders in a wide range of business interruption cases.
The Financial Conduct Authority (FCA), following the UK Supreme Court’s judgment, directly stated that there was a massive power imbalance between insurers and small businesses. The FCA therefore urged insurers to treat businesses fairly, attend to claims promptly, and not waste costs.
However, despite this clear guidance, NFU Mutual has engaged in a pattern of repeated delays and requests for the postponement of court deadlines, while filing everything at the last possible moment.
These tactics appear designed to exhaust and intimidate policyholders, hoping they will give up.
The group action against NFU Mutual centres on the interpretation of their “Prevention of Access” and other specific policy endorsements.
The claimants argue, with, they wsy, support from the judgment of the UK Supreme Court and subsequent legal authorities from later judgments, that these clauses should have provided coverage for losses sustained when government lockdowns prevented or hindered access to our premises.
The Lawyers Leading the Fight
We, and others, have instructed Penningtons Manches Cooper LLP to bring a claim on behalf of a representative set of claimants.
It is still possible to join with that representative claim and it may be important to join with some claim before the limitation period of next March to protect your interests because of a legal principle called limitation.
- What limitation means: In the UK, the law sets a time limit for bringing a legal claim, typically six years from the date the breach of contract occurred. If a claim is not filed within this “limitation period,” it can be “time-barred,” meaning the court will likely refuse to hear it, no matter how strong the case.
This firm is representing a large group of claimants, primarily rural businesses with hospitality diversifications. They have formally filed and served legal proceedings on NFU Mutual. They are acting on a “no-win, no-fee” basis, and they will provide a free review of your policy documents to see if you have a case. You can contact them directly to find out more and to see if you are eligible to join the group action.
Other firms are also acting, but for NFU Mutual, Penningtons has the most prominent case with the most claimants.
Other lawyers who have been successful in similar litigation (such as RLK Solicitors who also contributed to the BBC News item), are also at the forefront of this area of law.
It is important to source the help of lawyers who have the expertise to challenge insurers who exploit the legal process with delays and a lack of transparency.
The Royal Courts of Justice
What You Need to Do Next
If you had a business interruption policy with NFU Mutual and your claim was denied, it’s crucial to act now.
- Check Your Policy: Locate your policy documents from the time of the pandemic and carefully review them for clauses related to “Business Interruption,” “Prevention of Access,” or “Public Authority Incident.”
- Gather Your Evidence: Collect all correspondence with NFU Mutual, details of your financial losses during the lockdowns, and any other relevant documentation.
- Contact a Specialist Law Firm: such as Penningtons.
Penningtons has a special page on their website for NFU Mutual customers with more information there.
The deadline for making these claims is approaching.
It is vital to get legal advice to ensure your claim is not timed out. Don’t let this opportunity pass you by.
This is our chance to stand with other businesses and pursue the compensation we rightfully deserve.
The legal landscape has shifted repeatedly in the favour of claimants in such cases, and the information given to NFU Mutual policyholders at the beginning of the pandemic is no longer accurate and has not been clarified.
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