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London lawyers predicting surge in Covid related insurance litigation

A new study has revealed London lawyers are expecting to be involved in a significant increase in contractual disputes triggered by the Covid-19 pandemic, including business interruption insurance claims.

The London Solicitors Litigation Association (LSLA), study, which questioned 110 senior lawyers in December and January, found that over the next two years 78 % of lawyers questioned expected a rise in Covid-related claims.

The study highlighted that;

  • 84 % of lawyers expect to be dealing with disputes involving supply chain disruption caused by the pandemic
  • 70 % expect more insolvency-related cases
  • 50 % predict more lawsuits linked to business interruption insurance claims.

The LSLA, which represents the capital’s main litigation practices and law firms, conducted the study before Russia’s invasion of Ukraine.

 Nicholas Heaton, president of the LSLA and partner at law firm Hogan Lovells, said: “People did expect more litigation in areas like supply chains and contractual disputes because of the major impact on the economy caused by the pandemic. It’s been held back a bit but is now starting to materialise. The war in Ukraine has only added to the difficult economic conditions.”

London’s High Court has already dealt with a number of business interruption lawsuits with a recent decision against Axa likely to trigger more claims. In February Wolseley owner Corbin & King, now controlled by Thai hotel group Minor, won a £4.4mn business-interruption lawsuit against insurer Axa.

The UK’s largest pub group Stonegate is suing MS Amlin, Liberty Mutual Insurance Europe and Zurich for £845m losses it suffered during the pandemic.

The LSLA study also showed 57 per cent of those surveyed also expect an increase in Brexit related lawsuits, on the back of an increase in the number of employment and regulatory disputes.

Two-thirds of lawyers surveyed said they do not believe Brexit will force litigants to fight their court battles elsewhere, as they said the UK legal system will retain its top position despite the UK’s exit from the European Union (EU).

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