Gatwick Investment Ltd and others v Liberty Mutual Insurance Europe SE; Bath Racecourse Company Ltd and others v Liberty Mutual Insurance Europe SE and others
Decision date: 22 April 2026
Neutral citation: [2026] UKSC 14
Court: United Kingdom Supreme Court
Insurance classification confidence: high
Overall AI summary confidence: medium
Short overview
A short description of the case, material issue, and outcome where supported by the judgment.
AI confidence in this overview: medium
These consolidated appeals concerned whether furlough payments under the Coronavirus Job Retention Scheme (CJRS) must be deducted under "savings" clauses in business‑interruption insurance policies when calculating indemnity for pandemic‑related lost gross revenue. The material issue was the construction of those savings clauses and whether CJRS payments reduced insured charges or expenses "in consequence of" the insured peril. The court upheld the decisions below and dismissed the appeals, holding that the savings clauses require deduction because the furlough payments reduced charges or expenses and did so in consequence of the insured peril.
Ratio decidendi
The legal reasoning necessary to the outcome, where it can safely be identified from the judgment.
AI confidence in this ratio summary: high
A savings clause in a business‑interruption policy is to be construed consistently with the contract's indemnity purpose and commercial economic reality: amounts that reduce the insured's economic burden of a charge (including statutory third‑party reimbursements) fall within "sums which cease or reduce in consequence of" the insured incident. Where deduction is required for sums received "in consequence of" the insured peril, proximate causation is assessed by the same legal test applied to causation of insured loss (including the FCA test case approach to concurrent causes and a single underlying fortuity); applying that approach, CJRS payments were proximately caused by the insured peril in these cases.
Obiter dicta
Judicial observations that were not necessary to the outcome, where they can safely be identified.
AI confidence in this obiter summary: medium
The Court observed (as interpretive guidance) that the indemnity principle can be a permissible aid to construction where wording is ambiguous but cannot override clear contractual language, and that the critical question for excluding deduction of third‑party payments as gratuitous or collateral is whether the payer intended the payment to benefit the insured to the exclusion of insurers.
Warning
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