AXA wins Covid-19 exclusion case in Court of Cassation

The French Court of Cassation has confirmed its refusal to compensate the operating losses suffered by restaurateurs during lockdown in 2020, according to a report from Time News.

The court overturned a total of four decisions of the Aix-en-Provence Court of Appeal – three of which were made on 20 May 2021 – that favoured the companies Alpilles Events based in Mouriès, À La Bonne Franquette (Martigues), and Beraha (Marseille), in disputes between them and AXA. The court also censured a decision of 25 February 2021, favourable to the Marseille company Le Phoenix.

The Court of Cassation referred the case to the “differently composed” Aix Court of Appeal, which will have to rule again. “There will be a new debate before the referring judge and this one can align or not align: he has a freedom of appreciation,” declared Didier Le Prado, who defended the four restaurateurs.

“The decision is obviously favourable to AXA but the debate is not closed, since it is a decision with referral,” he summarised, according to Time News.

The French court of appeal decided that AXA’s exclusion clause in the “professional multi-risk” contracts taken out by the catering companies was valid, which means that AXA does have to compensate the firm’s losses caused by state-ordered lockdown.

AXA reportedly welcomed this “important” decision, which it said “establishes the validity of (its) standard contract”. A spokesperson reportedly, however, confirmed that there are currently 50 other appeals before the Court of Cassation, meaning that the story does not end here.

“Faced with the unprecedented legal situation, where the disagreement on both sides was in good faith and the first instance and appeal decisions were shared, we reached out to our insured restaurateurs in 2021 with an amicable financial solution,” continued the group. AXA had reportedly offered some €300m to compensate 15,000 restaurateurs amicably.

“Accepted by 80% of them, this outstretched hand has supported the resumption of activity in a context of exit from Covid, while strengthening the links between the restaurant profession and the distribution networks of AXA France throughout the territory,” said Patrick Cohen, general manager of AXA France, in the statement.

The plaintiffs’ lawyer Guillaume Aksil, counsel to some 400 restaurateurs, reportedly said he was “quite surprised” by an “unexpected setback in case law”. The lawyer pointed out that the Court of Cassation has shown “a tendency, in recent years, to invalidate the exclusion clauses of insurance policies when they lack clarity”.

The lawyer told Time News he believes that seven Courts of Appeal (Paris, Lyon, Bordeaux, Agen, Pau, Reims, Angers) have validated the exclusion clause and five others have invalidated it (Bourges, Aix-en-Provence, Rennes , Toulouse, Poitiers).