High Court Refuses to Strike Out £8m Covid Business Interruption Insurance Claim Against Broker James Hallam, Allowing Negligence Case to Proceed
In a judgment handed down on 26 October 2026, Deputy Master Valentine in the High Court of Justice (Business and Property Division) refused an application by insurance broker James Hallam Limited to strike out or obtain summary judgment against a claim brought by restaurant operator MW Eat Limited and associated companies Echowalk Limited and Echowalk Invest Limited. The claim alleges professional negligence, breach of duty, and breach of contract against James Hallam, which acted as MW Eat's insurance broker during 2019 to 2022. MW Eat operated approximately 10 London restaurants with an estimated gross profit of £40m over a 24-month indemnity period. The claimants allege uninsured losses of up to £8m arising from the national Covid-19 lockdown imposed on 23 March 2020. The relevant insurance policy, a one-year contract arranged by James Hallam with Barbican Protect Limited running from September 2019 to September 2020, included business interruption (BI) cover and extensions. However, the specified disease list did not include Covid-19, coronavirus, or SARS, and a non-damage denial of access (NDDA) extension applied only within a 1,000-metre radius of premises, with a three-month maximum indemnity period and a £50,000 limit. The court was asked to strike out the claim under CPR 3.4(2)(a) and/or (b) or grant summary judgment under CPR 24. The Deputy Master refused both applications. Clyde and Co acted for James Hallam, and Keystone Law acted for the claimants.
Why this matters
Covid-19 business interruption insurance litigation has generated a long tail of professional negligence claims against brokers, separate from the direct insurer disputes resolved by the Supreme Court's FCA test case in January 2021. This judgment confirms that broker negligence claims in the Covid BI context remain live and are capable of surviving strike-out applications, meaning the wave of such litigation has not yet run its course. For restaurant and hospitality businesses that suffered pandemic losses and whose policies did not respond, this case keeps open the avenue of pursuing their broker rather than their insurer. The case also illustrates how the specific wording of disease lists and NDDA extensions, which were the central battleground in the insurer test case, now reappears in broker negligence claims alleging that better advice would have produced a policy with wider coverage.
On the Ground
The case activates professional negligence and insurance coverage practice areas. Disputes teams advising brokers will be focused on the standard of care owed when recommending policy terms, particularly around disease extensions and NDDA clauses that were widely discussed in the market before 2020. Claimant firms advising hospitality businesses will monitor this case as a precedent for surviving procedural challenges. Clyde and Co acted for the applicant broker and Keystone Law acted for the claimant restaurateurs. A trainee on a professional negligence matter of this type would assist in preparing disclosure bundles, drafting chronologies of the broker-client relationship, and reviewing correspondence and policy documents to map the advice given against the standard expected.
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“What would a claimant restaurant group need to prove to succeed in a professional negligence claim against its insurance broker for failing to obtain adequate Covid-19 business interruption cover?”
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