Virtual hearings at work: the FCA test case

Case background

This was a unique case for various reasons. It was brought by the insurance industry regulator, the Financial Conduct Authority (FCA), who have said that up to 370,000 UK businesses could be affected by insurers' failure to pay out on BI claims.

On 1 May 2020, the FCA announced that, acting in the public interest, it would seek court declarations aimed at resolving contractual uncertainty in selected BI insurance policies.

A claim form was issued on 9 June, two CMC's held remotely later that month (the first dealing largely with locus/expedition, the second with intervention), with a full trial taking place before two judges, including a Court of Appeal judge, from 20 to 31 July. The whole process took less than two months.

The result of the test case will be legally binding on the insurer parties to the test case in respect of the policies considered.

It will also provide persuasive guidance for the interpretation of similar policy wordings and so directly impacts the resolution of many more claims, beyond those which are subject to the specific wordings considered in the test case.

The trial concluded on 31 July 2020 following argument from insurers and policyholders. Judgment in the case is currently expected in mid-September.

The virtual hearing

Just stepping back, running such a case at any time would have been a monumental achievement, but to do it against the background of a country barely emerging from a total lockdown was something else entirely.

As well as the FCA and two intervening policyholder groups on the claimant side, eight insurers were involved, and 17 different wordings were examined in detail.

In the six-week run up to the trial, the parties worked on agreed facts/common ground, and lists of issues, whilst all insurers served voluminous defences, followed by a detailed reply from the FCA with input from the intervenors.

The hearing was entirely remote. It was run by Herbert Smith Freehills, the FCA's solicitors, with real efficiency, with external providers (details below) running an electronic trial bundle, live transcription, electronic presentation of evidence during the trial, with video access via Skype for Business.

More unusually, there was a live public feed of the proceedings, and all the pleadings, lists of issues, skeleton arguments, daily transcripts were made available within 24 hours on the FCA web site.

Whilst there’s a degree of administration involved in signing up to the relevant platforms, checking the technical capabilities and hardware/software setup for everyone on the team and testing to ensure the various systems would work, much of this needs to be done now in regular trials using electronic bundles.

New documents were also regularly being uploaded during the trial, with dedicated resource in the legal teams for this purpose. Then again, one would probably have a trainee or junior associate assigned to that on any trial with a large number of documents.

What stood out was how well the entire process worked, with the trial running to time, albeit with the court sitting an extra half hour on most days – and that due to sheer volume of submissions, not for tech-related reasons.

Indeed, in my view, an expedited, large-scale trial like this probably works better remotely even in normal times, given the number of people involved and the entire focus being on one room in the Rolls Building and the technological limits that building has.

For example, the parties’ own Skype feed showed some 70 people ‘in court’ on day one. A non-issue remotely, a real headache in the physical world.

The access provided by the live Skype feed was particularly appreciated by Mishcon's 400 intervening clients in the Hiscox Action Group, who could follow the claim visually and clearly wherever they were: one of our steering committee members broadcasting it to his entire family whilst driving from Northampton to Scotland.

It’s also testament to how a profession that was perhaps seen, and indeed saw itself, as technologically behind the curve, has in fact met the challenges of the COVID era by embracing the tech that was already in place and near seamlessly adapting to it.

In this case everyone, from Lord Justice Flaux and Sir Christopher Butcher though all the silks and their teams, was very on top of the technology.

Whilst a case on legal principle, and not centred say, on cross-examination of witnesses, does perhaps lend itself to remote hearings, this case was certainly a positive advert for them.

The last word to Lord Justice Flaux:

MR EDELMAN: My Lord, other than also to thank the
transcribers and all those who provided all the
technical support, and again to thank my Lords for the
expedition with which this has been dealt. There is
nothing more I wanted to say, no.

LORD JUSTICE FLAUX: Can I just say on behalf of
Mr Justice Butcher and myself that we are extremely
grateful to all the parties, not just counsel but to all
their solicitors and those who are behind the scenes who
have made this remote hearing as effective as we think
it has been, and as largely civilised and good humoured
as it has been, and at least so far as you lot are
concerned have a good holiday. Thank you.

The technology used

The trial bundle was hosted electronically by Opus 2 using Magnum. They also provided live transcription.

EPE (electronic presentation of evidence) was also provided by Opus 2. That was done using meeting software called Ring Central.

Video conferencing facilities were managed by Sparq and conducted using Skype for Business.

The live public feed of the proceedings was broadcast separately by Sparq.