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Class-action lawsuit calls for jewellery and gemstone businesses

Gordon Legal, who represents a number of retailers against insurance company Lloyds of London, is calling for more companies to join the class action lawsuit.

The focus of the July class action lawsuit is business interruption insurance policies underwritten by Lloyds of London and whether or not they offer protection from closures due to the COVID-19 pandemic.

A webinar meeting is scheduled for Wednesday, August 18 at 4pm at City Hall, accessible on the Gordon Legal website.

Andrew Grech, Partner at Gordon Legal, commented, “We believe that insurers have falsely denied claims to thousands of jewelry companies and gem dealers and failed to support them when they needed it most.

“Having access to the payoff we believe they are entitled to will mean the difference between surviving and failing for many companies.”

One of those already represented is Cody Opal Australia, the parent company of the National Opal Collection (NOC).

The NOC’s business interruption policy included a clause preventing the event of an “outbreak of a reportable infectious or contagious disease in humans within 20 kilometers of the [premises]”.

However, a lawsuit against the policy was denied in May 2020, with the insurer claiming the company’s losses – which Cody Opal estimates at more than $ 3 million – as a result of COVID-19 cases within 12 miles of the Premises and not “superordinate factors resulting from the COVID-19 pandemic as a whole”.

Speaking to Jeweler, Grech said, “The underwriters at Lloyds of London are a major insurer of jewelry and gem dealers in Australia and we believe some underwriters are not entitled to claim for extensive COVID-related losses incurred during the lockdown have paid.

“Based on the wording of the policy, we believe that policyholders with certain policies taken out with underwriters at Lloyds have a good chance of being successful in a class action lawsuit.”

Grech added, “Jewelers and gem dealers have been hit very hard during the pandemic as these non-essential stores have been forced to close due to trade restrictions in our major cities. They were badly let down by the underwriters who provided them with business interruption insurance through Lloyds of London. “

The Insurance Council of Australia (ICA) has appealed a separate NSW test case to the High Court and insurers have “other avenues open to further delays,” according to Grech.

“We believe that a class action lawsuit will help resolve the problem faster than it would otherwise. From our point of view, the class action lawsuit is the right instrument to efficiently bring the claims of affected policyholders to court. “

The class action is funded by litigation funding firm Omni Bridgeway, which means that companies that join the lawsuit – referred to as “group members” – do not have to pay upfront or out-of-pocket expenses.

“If the process is expected to be successful, Omni Bridgeway will be entitled to a commission paid out of the damages awarded,” said Grech.

“In the event that the class action is unsuccessful, the group members do not have to pay anything as Omni Bridgeway agrees to pay any legal fees that Lloyds of London may be awarded.”

The class action has been filed with the Federal Court of Justice and the first hearing is expected to take place within weeks.

Gordon Legal has proposed Lloyds of London business interruption policyholders initiate the claims process and seek legal advice; Business owners can file their policy with Gordon Legal to see if they are eligible to participate in the class action lawsuit.

With the possibility of similar class actions against various insurance companies in the future, the firm has encouraged all business interruption policyholders to attend the City Hall webinar.

Information and registration details for the webinar can be found here.

Read more:
Australian jewelry retailer joins COVID-19 class action lawsuit
Australian opal dealer challenges rejection of COVID-19 insurance

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