Will life return to normal after COVID?

It has been more than a year since the first outbreak in Wuhan and many of us still remain in lockdown around the globe. The vaccine rollout is starting to happen across some countries – namely the US, UK, and Israel but doubts have arisen regarding its effectiveness. The vaccine itself may protect you from getting seriously ill but it is still unknown whether you can be a spreader and pass the disease on. You also need more than one dose to be sufficiently protected. This, along with the many variants of the disease starting to crop up, has led some to question if life will ever return to normal?

It is clear that the world has entered a new normal of some sorts; where masks, social distancing and periodic lockdowns have become a reality. It is unlikely masks and social distancing will be stopped anytime soon but there is a growing desire to get closer to answers regarding lockdown. When it will be lifted? How many more periodic lockdowns will be set in place? How long can economies and the mental health of people go on in this state? The vaccine seems to be only the route out but it is important to remember that variants of the disease will continue to mutate and that it is highly unlikely we will ever rid the planet of COVID completely. Some see the possibility of vaccination passports as the answer to returning to normality; being able to track who has been “protected” could open up bars, restaurants, and the leisure industry. Talk among airlines has already circulated about the possibility of barring future customers from travelling if they have not been vaccinated. This raises some ethical concerns, however, since limiting people’s movements based on whether they have had a vaccine or not could be seen as an infringement on personal freedoms. It is unlikely that this would pass without opposition so it would have to be done with careful consideration to those who are against the idea. If vaccination is our route out there is also always the question of time and money. The vaccination rollout in the UK and many other countries is primarily aimed at targeting the elderly and vulnerable first, leaving other groups to wait a little longer. In some ways this move makes sense – the death rate among the elderly and vulnerable is higher compared to those with no pre-existing conditions. However, it has been found that the super spreaders are the young and healthy which leads some to question the government’s stance on the vaccine rollout. Surely the vaccine should be given to the super spreaders first, especially since they are the ones most likely to mix and mingle outside their household? The majority of the vulnerable and elderly are aware of the risk and are shielded which could be a good reason to start vaccinating other groups early too.

Experts at London School of Hygiene and Tropical Medicine have also suggested that at least 50% of the population needs to be vaccinated before measures can be relaxed. With the vaccine rollout requiring multiple doses it is unlikely that the process will be a simple or a quick fix to freedom. The majority of scientists agree that the vaccination of the elderly does not mean an end to lockdown – it simply means a step in the right direction. Once the majority of the population has been vaccinated measures can start to be relaxed but even then it is a dangerous game. Stephen Evans, professor of pharmacoepidemiology at the London School of Hygiene highlights this concern and the need to remain vigilant. “I think if people take these seriously, then it’s possible for various economic activities to go ahead, but you have to make sure that you are keeping to the non-medical interventions, being aware and behaving as if every person you contact has got the virus.”[1] It is a sad but sobering truth; we are still a long way off before normality returns. However, the resilience that the human race has shown in spite of these difficulties goes to show our strength and ability to overcome obstacles. Masks and social distancing may stick around for quite some time, even after the pandemic, but the economy cannot stay closed forever. As well as the risks to mental health and the global economy, tension will begin to mount if an exit strategy is not outlined soon. There has to be other measurers of success and failure in place with regards to the virus and not just a focus on case numbers and causalities. There has to also be a greater focus on the economy, impacts on businesses, the welfare and education of our children as well as the broader impacts on mental health.

[1] https://www.sciencefocus.com/news/covid-19-vaccine-uk-when-will-life-go-back-to-normal/

© Whitestone Chambers

Could A Cashless Society Be On The Cards?

COVID 19 has caused a major change in the way people now handle money. Banks have had to transform their services to adapt to the new normal and many shops refuse cash payments altogether. The idea of a cashless society is not new but there has never been a more apt time to make the switch. Though it is unlikely cash will be phased out completely Whitestone predict that society will see a rise in the number of cashless payments being made. The pandemic has caused a shift in our attitudes towards cash with the WHO advising the public to use cashless/contactless methods to reduce the spread of the virus.[1] It is likely that these attitudes will “stick” long after the pandemic but is the world really prepared for a cashless society?

The benefits of going cashless have risen in the past 10 months with many believing that handling cash could increase the risk of transmission. The idea that money could be contaminated with the virus has led to consumers making the switch. Especially for the new plastic notes in the UK. Even before the pandemic, however, cashless payments were seen as a quick and efficient alternative to handling money. The only problem lies with security and potential fraud problems. As long as the public are using PINS and two-factor authentication methods then the risk posed remains low but the move towards contactless payment could change this. Physically entering your PIN on a card-reader holds a hygiene risk and in our new normal this will not keep up. This has led many to use contactless payment but this puts the user at a greater security risk. There is concern that contactless payment lacks the basic two-factor authentication to provide enough security to users. To combat both these concerns many card companies are looking into biometric technology to provide authorisation with a focus on hygiene. Visa is one of many companies that are trialling this technology by using biometric fingerprint cards that are fast and efficient.[2]

Despite the acceleration of cashless payments, it is unlikely cash will be phased out altogether anytime soon. Our world still is not ready for a cashless society with 1.3m people still unable to access a bank account.[3] Developed countries could probably make the transition but would still face opposition as consumer companies warn that the move could result in the marginalisation of certain groups. These could include those who are retired or low-income earners who have limited access to digital payments. COVID 19 might have changed the way we handle cash forever but it is unlikely that it will disappear. Morten Jorgensen, director of RBR, echoes a similar sentiment in his statement, “Cash is not going to disappear, but it will continue to decline, and Covid is accelerating that trend.”[4]

[1] https://www.pymnts.com/safety-and-security/2020/world-health-organization-cautions-against-cash-usage

[2] ttps://usa.visa.com/visa-everywhere/security/biometric-payment-card.html

[3] https://www.accesstocash.org.uk/media/1159/interim-report-final-web.pdf

[4] https://www.nytimes.com/2020/07/06/business/cashless-transactions.html 

© Whitestone Chambers

Insurance Claims Out of Covid-19. Supreme Court Opens The Door.

The Financial Conduct Authority (Appellant) v Arch Insurance (UK) Ltd and others; appeals to provide clarification over losses resulting from the COVID-19 pandemic.

Presided over by justices: Lord Reed (President), Lord Hodge (Deputy President), Lord Briggs, Lord Hamblen, Lord Leggatt. Judgment 15 January 2020.

Background to appeal:

The Financial Conduct Authority, (FCA), brought proceedings to court under the Financial Markets Test Case Scheme following an agreement made with eight insurance companies. The agreement set out to resolve issues of general importance on which immediately relevant English law was needed to aid guidance. The FCA proceeded to represent two policyholders with the main aim to use appeals to clarify whether a variety of insurance policy wordings cover or do not cover business interruption losses resulting from the COVID-19 pandemic and public health measures taken by UK authorities.

In response the court considered 21 sample insurance policy wordings and accepted most of FCA’S arguments about the effect of such wordings. However, not all of FCA’s appeals were accepted leading to six insurance companies appealing against the decision of the court on such matters and also responded to FCA’s appeal. Such companies included: (UK) Ltd (“Arch”), Argenta Syndicate Management Ltd (“Argenta”), Hiscox Insurance Company Ltd (“Hiscox”), MS Amlin Underwriting Ltd (“MS Amlin”), QBE UK Limited (“QBE”) and Royal & Sun Alliance Insurance Plc (“RSA”). The importance of the issues raised has led the appeals to proceed directly to the Supreme Court; bypassing the Court of Appeal.

The Supreme Court addressed the issues of appeals as follows:

  1. The interpretation of “disease” clauses (which cover business interruption losses resulting from any occurrence of a notifiable disease within a specified distance of insured premises);

Ruling – Lord Hamblen and Lord Leggett accepted the insurers arguments that each case of illness sustained by a person as a result of COVID-19 is a separate “occurrence” and (ii) the clause only covers business interruption losses resulting from cases of disease which occur within the radius and that other disease clause wording should be interpreted in the same way.

  1. The interpretation of “prevention of access” clauses (which cover business interruption losses resulting from public authority intervention preventing access to, or the use of, business premises) and “hybrid clauses” (which contain both disease and prevention of access elements) ;

Ruling: The Supreme Court rejected the court’s interpretation as to narrow and held that an instruction given by a public authority may amount to a restriction imposed if it carries the imminent threat of legal compulsion or is in mandatory and clear terms and indicates that compliance is required without recourse to legal powers. In relation to the Hiscox wording, which provided cover where business interruption loss is caused by the policy holder’s “inability to use” the insured premises, the Supreme Court agreed that inability rather than hindrance of use must be established but held that this requirement may be satisfied where a policyholder is unable to use the premised for a discrete business activity or is unable to use a discrete part of it’s premises for it’s business activities. The Supreme Court interpreters wording requiring “prevention of access” to the premises in a similar manner.

  1. The question of what causal link must be shown between business interruption losses and the occurrence of a notifiable disease (or other insured peril specified in the relevant policy wording);

Ruling: It is sufficient for a policyholder to show that at the time of any Government measure there was at least one case of COVID-19 within the geographical area covered by the clause.

  1. The effect of “trends” clauses (which prescribe a standard method of quantifying business interruption losses by comparing the performance of a business to an earlier period of trading)

Ruling: Held that these clauses should not be construed so as to take away cover provided by the insuring clauses and that the trends and circumstances for which the clauses require adjustments to be made do not include circumstances arising out of the same underlying or originating cause as the insured peril.

  1. The significance in quantifying business interruption losses of effects of the pandemic on the business which occurred before the cover was triggered (“Pre-Trigger Losses”) .

Ruling: The Supreme Court rejected the court’s approach. In accordance with the interpretation of the trends clauses, adjustments should only be made to reflect circumstances affecting the business which are unconnected with COVID- 19.