A High Court judge has given restaurant businesses a further opportunity to pursue an £8 million claim against their insurance broker over alleged gaps in business interruption cover during the COVID-19 pandemic, but has ordered them to provide a clearer account of the policy they say should have been arranged.
What is the claim about?
In MW Eat Limited & Ors v James Hallam Limited [2026] EWHC 2673 (BP), Deputy Master Valentine considered an application by James Hallam Limited to strike out the claim or obtain summary judgment. The proceedings concern allegations that the insurance broker failed to advise MW Eat Limited adequately when arranging business insurance before the COVID-19 pandemic.
MW Eat Limited operated a group of restaurants in London. Echowalk Limited and Echowalk Invest Limited, the other claimants, are group companies and assignees of claims against the broker. The claimants allege that the insurance arranged for the relevant period did not provide adequate protection against losses caused by the pandemic and the government’s lockdown response.
The claimants allege lost profits of approximately £8,022,528 across the 2019/20, 2020/21 and 2021/22 financial years. Their pleaded claim seeks damages not exceeding £8 million. These figures represent the claimants’ allegations and have not been established as damages payable by the broker.
What insurance cover was in place?
When its previous insurance policy expired in September 2019, MW Eat sought advice from James Hallam Limited about renewal options. The broker approached several insurers and recommended an extended policy period with Barbican Protect Limited. MW Eat ultimately entered into a one-year policy running from 20 September 2019 to 19 September 2020.
The policy included business interruption cover, including extensions relating to specified diseases and non-damage denial of access. However, the specified-disease list did not include COVID-19, coronavirus or SARS. The disease extension was subject to a maximum indemnity period of three months and a £50,000 limit for the insurance period. A separate non-damage denial of access extension also carried a three-month maximum indemnity period and a £50,000 limit.
For the purposes of the broker’s application, the parties proceeded on the basis that the policy did not cover, or did not cover beyond the £50,000 limit, the losses attributed to the pandemic and the government response. The claimants say the policy was inadequate for the business’s needs and that a suitable alternative policy should have provided broader cover and higher limits.
- The insurance policy arranged through the broker began.
- England entered the first COVID-19 lockdown.
- The claimants say they suffered combined lost profits of approximately £8.02 million.
- The High Court heard the broker’s application.
- Deputy Master Valentine handed down judgment and ordered amended particulars within 28 days.
Why did the broker challenge the claim?
James Hallam argued that the particulars of claim did not set out a sufficiently clear explanation of what would have happened if it had not allegedly breached its duties. The claimants referred to a “Correct Alternative Product”, but the broker said the pleading did not identify the essential terms of that hypothetical policy, the limits and indemnity periods it would have provided, the premium the business would have accepted, or the amount of loss it would have covered.
The broker submitted that these gaps meant it could not properly understand or respond to the case, prepare evidence or assess the claim for settlement. It applied under the Civil Procedure Rules for the claim to be struck out and, alternatively, for summary judgment.
The court considered the requirement for a claimant to plead the material facts supporting its cause of action, including the positive counterfactual: what would have happened if the alleged negligence had not occurred. A claim framed alternatively as loss of a chance does not remove the need to explain the claimant’s case about what it would have done and the outcome it says might have followed.
What did the court decide?
The court concluded that the particulars of claim did not describe the hypothetical alternative insurance policy with enough precision. Although the pleading indicated certain minimum features, such as disease cover capable of responding to COVID-19-related losses, adequate limits and non-damage denial of access cover extending beyond three months, it left important questions unanswered.
In particular, the court could not determine what indemnity limits, both per restaurant and overall, would have been adequate, what indemnity periods would have applied, what premium the claimants would have been prepared to pay, or whether the proposed policy would have replicated important features of the policy actually purchased. Nor was it clear what portion of the alleged lost profits the claimants said would have been recoverable under the alternative cover.
The central problem was the lack of precision in the pleaded counterfactual, rather than simply the absence of a named insurer or complete policy wording.
Deputy Master Valentine accepted that the broker was entitled to understand the case it had to meet and to prepare responsive evidence, including expert evidence. The claimants could not leave the broker to determine for itself the size and basis of the claim.
However, the judge did not accept that the claim necessarily had to be advanced only on a loss-of-a-chance basis. Whether a policy with the relevant characteristics would in fact have covered particular losses would involve evidence and could be determined at trial. The court treated that issue as primarily one of proof, provided the claimants properly clarified the characteristics of the policy they say should have been offered.
What must the claimants clarify?
The amended particulars of claim must explain the hypothetical alternative policy and the alleged loss with greater detail. The court identified several matters that need to be addressed so the broker can evaluate and respond to the claim.
| Issue | What needs to be clarified |
|---|---|
| Policy features | Whether the alternative policy would have replicated the key features of the 2019/20 policy. |
| Indemnity limits | The limits that would have been adequate for disease and non-damage denial of access cover, both per restaurant and overall. |
| Indemnity periods | The duration of cover said to have been required for the relevant risks. |
| Premium | The premium the claimants would have been willing to pay for the proposed cover. |
| Recoverable loss | The amount of lost profits said to have been covered, if less than the full lockdown losses claimed. |
| Basis of claim | Whether the alleged loss is advanced as a direct indemnity claim, a loss-of-a-chance claim, or both. |
The judge also considered the broker’s argument that the claimants’ later insurance purchases, made after the pandemic began, undermined the suggestion that they would have bought broader cover in 2019. That issue was treated as a matter of evidence rather than one that could be decided on the application before the court.
What happens next?
The application to strike out the claim finally or grant summary judgment was refused at this stage. Deputy Master Valentine considered that the claim was otherwise clear and well organised, and that the claimants appeared to have obtained expert advice that should enable them to correct the identified deficiencies.
The claimants were therefore directed to serve amended particulars of claim within 28 days. The judgment does not determine whether James Hallam was negligent, whether a suitable alternative policy would have been available or purchased, or whether any of the alleged losses would ultimately have been covered. Those matters remain to be established through the proceedings.
The decision highlights the importance of pleading a clear counterfactual in professional negligence claims. Where the alleged loss depends on insurance that was never purchased, claimants must explain the material features of the policy they say should have been arranged and identify the loss they say would have been recoverable.
Frequently asked questions
What is the claim against James Hallam Limited about?
The claimants allege that their insurance broker failed to arrange adequate business interruption cover, leaving their restaurant business exposed to losses associated with the COVID-19 lockdowns.
How much are the claimants seeking?
The claimants allege lost profits of approximately £8.02 million and seek damages not exceeding £8 million.
Did the High Court strike out the claim?
No. The court declined to strike out the claim finally or grant summary judgment, but ordered the claimants to amend their particulars of claim within 28 days.
What was wrong with the particulars of claim?
The hypothetical alternative insurance policy was not described precisely enough. The pleading needed to clarify its key features, limits, indemnity periods, acceptable premium and the amount of loss said to have been covered.
Has the court decided that the broker was negligent?
No. The judgment dealt with the adequacy of the pleading and the broker’s application. The underlying allegations and questions of coverage and loss remain unresolved.