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Business Interruption: FCA move on test case

1 June 2020


The British Dental Association (BDA) has responded to news that the Financial Conduct Authority (FCA) has identified representative samples of Business Interruption insurance policy wordings to be examined in a legal test case.


The BDA was the first trade union or professional body to directly engage with the FCA following the failure of most polices to pay out for losses incurred during the pandemic. While welcoming the news, it has long expressed concern that the FCA's 'one size fits all' approach will fail to address the specific needs of its members.


High street dentists in England can resume face-to-face patient care from 8 June 2020, following 10 weeks of lockdown during which many practices have seen cashflow fall to zero. The BDA has expressed concern that levels of capacity – owing to social distancing and infection control procedures – will be a fraction of pre-pandemic levels, with providers facing shortages and higher costs for vital Personal Protective Equipment (PPE).


By way of illustration, practices operating as Urgent Dental Care centres during lockdown have seen patient volumes fall by over two thirds when compared to levels before March.


BDA Chair Mick Armstrong said: 

"This move looks like positive news for many businesses facing crippling losses during lockdown. Sadly this process has been imposed on dentists, and so far has offered little scope to address the unique challenges they face.


"Issues we have identified with our legal team remain and continue to affect our members' ability to claim under policies. To that end, the FCA still has many questions to answer.


"A skeleton service will go back to work next week, to reduced patients and at a higher cost. We need a resolution. The longer this is drawn out the more practices will go to the wall."


Ravi Nayer, partner at law firm Brown Rudnick and counsel to the BDA said:  


"Today's announcement continues to make clear that there can be no one size fits all court decision and, importantly, gives zero comfort on the question of whether challenges affecting certain businesses in the healthcare sector will be taken into account by the court. The context is necessary to achieve a fair outcome."