Huge win for the Personal Care sector – 300 businesses awarded a payout from their insurer Salon Gold

Over 300 Personal Care businesses, across the UK and Isle of Man, win a landmark case against their insurer, Salon Gold, as it is ordered to payout Covid-19 pandemic losses. This means Salon Gold insurance policies do cover losses suffered as a result of the closure and restrictions placed on businesses during the Covid-19 pandemic. This also opens the door for similarly worded insurance policies which contain clauses relating to Public Emergency / Denial of Access / Public Authority Incident / Prevention of Access etc. 

RLK Solicitors represented over 300 policyholders in the Personal Care sector against their insurance company on the issue whether ‘the actions or advice of the government or local authority due to an emergency likely to endanger life or property in the vicinity of the Premises which prevents or hinders the use of or access to the Premises’ is applicable to the actions the Government took in response to the Covid-19 pandemic in 2020/2021. In a significant decision from the Arbitrator, Sir Richard Aikens (a highly regarded Arbitrator and former High Court Judge and Lord Justice of Appeal) decided in favour of the Claimants that their Salon Gold policy did provide cover, and that cover was triggered by government action in response to the Covid-19 pandemic.  

The decision is significant as not only does it assist hundreds (if not thousands) of businesses, the claims have been denied for over 3 years, so this is the culmination of a lengthy and hard-fought battle. It is further significant as the Salon Gold policy wording is very similar to the wording of another policy that the High Court rejected in the FCA Test Case. Sir Richard said: 

“But I am satisfied that the specific argument raised by the Claimants in this case was not dealt with squarely in the Divisional Court’s judgment. Therefore, I am not obliged to follow the construction given to the RSA 2.1 and 2.2 wording when considering the very similar wording in the Salon Gold policy”. 

If you are reading this, feeling like this applies to you and you have questions about your policy, RLK Solicitors urge you to get in touch today.

Sir Richard also stated that the Covid-19 pandemic alone met the criteria of an emergency – in these circumstances, the pandemic alone triggers cover under the policy. This is significant as all Salon Gold policies should pay out, and without having to deal with the potentially difficult task of proving that there was Covid-19 in the vicinity of the premises:  
 
“I would have no hesitation in concluding that the only qualification placed on the words “an emergency” is that it has to be “likely to endanger life or property in the vicinity of the Premises”. I would conclude that it is not necessary that the emergency has to arise “in the vicinity of the Premises” for there to be cover under this Sub-Section. There is nothing in this wording that suggests that it is intended to be only a “narrow, localised” form of  emergency to give cover,  to use the phrase that appears as a refrain in parts of the FCA Test Case (DC) judgment”. 

RLK Solicitors’ Solicitor and Head of Business Interruption Litigation, Chris Guy welcomes the Award of Sir Richard Aiken: “This is a groundbreaking result for the businesses in the UK that suffered tremendously as a result of the Covid-19 pandemic. We have been fighting the corner of all affected businesses for over 3 years and represented over 300 policyholders in the present action against Salon Gold. We welcome the award of Sir Richard who quite rightly agrees these types of policy should cover losses caused by the pandemic. We continue to fight for these businesses and recommend anyone who has not instructed us to do so in order to maximise the payout they deserve. Unfortunately, we see it all too often that insurance companies either do not pay out under the policy but if they do, what they pay is sometimes a fraction of the true value of the loss.” 

Collette Osbourne, owner of Hair Salons in Nottinghamshire and Vice Chair/Chief Policy Officer of the Hair & Barber Council, was party to the Salon Gold Arbitration and shares her view on the award: “When the COVID-19 pandemic struck, prompting the government-mandated closure of the hair and beauty industry, Salon Gold demonstrated a complete disregard for any communication by actively avoiding engagement with their policyholders. However, and throughout this challenging period, salon owners remained obligated to continue paying their insurance policies with insurers seemingly banking on their financial demise before entertaining any form of recourse. 

Faced with the aftermath of the pandemic and the ensuing chaos that persisted for two years, numerous businesses, despite government assurances, found themselves struggling to navigate these challenges. In response, we enlisted the services of RLK to advocate on our behalf. This award signifies a pivotal turning point for many, determining the viability of staying in business instead of succumbing to financial collapse. For some, the stakes were so high that homes and businesses were also at risk. 

The bravery of these businesses can be likened to a David and Goliath scenario, where hairdressers challenged formidable insurance entities and won. The perseverance and dedication demonstrated by RLK over the course of the past three years have been instrumental in supporting our collective pursuit for justice. We express our enduring gratitude for their unwavering commitment and tenacity in championing our cause.” 

A copy of the award can be accessed here.

RLK Solicitors’ Director and Head of Litigation, Satish Jakhu added; “I am delighted with the outcome for all businesses involved, through what has been an incredibly challenging period of uncertainty for them. I would like to thank our team at RLK, who have gone above and beyond across the three years, working seamlessly to support our clients.” 

RLK Solicitors’ team of expert lawyers was strengthened with the instruction of Jeffrey Gruder KC of Essex Court Chambers and Peter Ratcliffe of Three Verulam Buildings as Lead and Junior Counsel. Like RLK Solicitors, Jeffrey Gruder KC and Peter Ratcliffe are experts in the field of commercial and insurance litigation, including Covid-19 business interruption insurance claims. Jeffrey Gruder KC’s recent Covid-19 BII cases include Corbin & King v AXA, acting for two sets of Claimants in the ‘At The Premises’ Test Cases and Crown Plaza Gatwick Airport, Hollywood Bowl & Others v Liberty Mutual. Peter Ratcliffe’s recent Covid-19 BII cases include the FCA Test Case (FCA v Arch & Others), the Mance Award Arbitration against China Taiping Insurance and ‘At The Premises’ Test Cases. 

RLK Solicitors are specialists who led the Arbitration and have unique, exclusive knowledge to get the maximum compensation for their clients. RLK have already maximised and fast-tracked claims for their clients due to their expertise and involvement in this groundbreaking litigation over the last 3+ years.

If you had a Salon Gold insurance policy, or a different insurance policy with business interruption cover in 2020 then please urgently get in touch with RLK Solicitors in order to protect your position.  

Trust RLK to challenge your insurer.