Taylors Solicitors: A couple whose guest house and restaurant in the Lake District had to close during the pandemic have secured a six-figure insurance payout for business interruption.

Mark and Anne Vause opted to deal directly with their insurers, spurning ‘no win, no fee’ and group action options which would have left them facing a commitment to paying 25 per cent of their compensation plus disbursements such as court fees and accountancy costs.

They fared far better – obtaining compensation within a matter of a few months – by submitting their claim directly to their insurer RSA with advice and guidance from their solicitor, paying only for legal costs based on her time spent.

The couple’s business, 1863 Restaurant with Rooms, is in Pooley Bridge, a village on the shores of Ullswater.

Mark, 54, and Anne, 50, have run the award-winning business, which has seven luxury en-suite bedrooms plus a bar and restaurant, since February 2008. They employ around 20 staff and the business generates turnover of almost £1m a year.

Mark explained how the pandemic took its toll on the business.

He said:

“Until the pandemic struck, we’d been enjoying massive growth, punching way above our weight, and had won a string of awards. But Covid really took the wind out of our sails.

“A few days before the first lockdown in March 2020, we were informed that a customer who had been visiting the area from abroad was, on their return home, taken to hospital with suspected Covid. Tragically, the customer later passed away.

“We decided to shut down straight away as people were understandably deeply concerned about Covid.

“We reopened several months later, but had to reduce capacity in the restaurant from 32 covers to 16, to create more social distancing. The bar remained completely closed, as we stopped casual drinking. Customers were simply worried about sitting close to others.

“The business did recover somewhat, even at reduced capacity, but then came a further blow in the winter.

“We had a full order book for Christmas and the New Year, but one member of our kitchen team caught Covid and he had been in close contact with everyone working here.

“He and other staff had to isolate, and we were advised to shut for a couple of really valuable weeks. Then, in early 2021, came a further lockdown which meant we had to remain closed until May.”

Under their specialist guest house insurance policy, the couple were covered for loss of gross profit in the event of business interruption due to infectious and contagious diseases on the premises.

Mark said:

“I consulted our solicitor Claire Barnes early on, having seen an advertisement for no win, no fee claims.

“Claire advised us to put in our own claim with her support. We just wouldn’t have succeeded without her.

“We have always kept good business records, so we were able to provide RSA with the information they needed to demonstrate how our turnover and profit had been affected.

“RSA were pretty good to deal with throughout the process, although we did challenge them on a few points, guided by Claire, which secured us a larger settlement, covering both the periods from March to August 2020 and January to April 2021.

“I’m delighted with the outcome. Without it, we could not have continued as we were. We would probably have lost the restaurant and gone back to being purely a guest house, which would have been an extremely sad and backward step.

“It’s what insurance is for – to help ensure the business remains intact and healthy. We have kept everyone in a job and are able to move the business forward.”

Claire, a commercial disputes partner at north west law firm Taylors Solicitors, said:

“Mark and Anne had a good insurance policy, and I was experienced in the key principles of this type of claim which are set out in a Financial Conduct Authority test case that has recently received judicial clarification in a successful claim against AXA.

“I argued that a non-damage denial of access clause – an NDDOA – which some insurers were relying on to resist claims – did provide cover for losses where access to the business premises was restricted or hindered due to government action in response to the pandemic. The AXA case confirms my stance and should ensure more claims are now successful.

“I’m delighted Mark and Anne took my advice and were so successful. Most people in similar circumstances to them have gone with a no win, no fee or group action, but have ended up in a logjam while cases are determined, plus will have to sacrifice a large proportion of any monies recovered.

“Our firm, which is celebrating 30 years in business this year, has gained and retained business clients by working with them as an integral partner and providing legal solutions, but always within a pragmatic and commercial context.

“I would recommend that anyone who might initially have been knocked back by insurers should review their policies and check for any NDDOA clauses.”

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