Covid-related losses: Court of Cassation rules in favor of Axa against restaurateurs

Nearly three years after the start of the Covid-19 epidemic, insurance company Axa saw confirmation in the Court of Cassation of its refusal to compensate for operating losses suffered by restaurateurs during the administrative closure, while spending 300 million euros on amicable dispute resolution.

In its judgments, the Court set aside a total of four judgments of the Aix-en-Provence Court of Appeal, three of which dated 20 May 2021 in favor of Alpilles Events, headquartered in Mouriès, À La Bonne Franquette (Martigues), and Beraja ( Marcel), in disputes between them and Aksa. She also condemned the February 25, 2021 decision in favor of the Marseille company Le Phoenix.

The Court of Cassation transferred the case to the “different composition” of the Court of Appeal of Aix, which will have to decide again. “There will be a new debate before the guiding judge, and this one can agree or disagree: he has the freedom to evaluate,” said Didier Le Prado, who defended the four restaurateurs. “The decision is clearly in favor of Axa, but the discussion is not closed, since this is a decision with a reference,” he concluded.

After contacting Beraha and À La Bonne Franquette, they did not want to respond immediately.

Exclusion clause

France’s highest court upheld the exclusion clause of the “professional multiple risks” insurance contract entered into by these food service companies, which Axa relied on to not recover its operating losses due to the administrative closure. -19 epidemic.

These contracts cover the risk of operating losses following “an administrative closure by order due to infectious disease, homicide, suicide, epidemic or poisoning.” But the clause provides that the insured person loses the guarantee if “another institution is subject to administrative closure for the same reason” as those listed.

For the Court of Cassation, this exclusion clause is indeed “formal and limited” and “does not lead to the deprivation of the guarantee of its substance”, contrary to what the restorers have argued, as confirmed by several court decisions in the first and second instances.

“An unexpected twist in jurisprudence”

Axa immediately welcomed this “important” ruling by the Court of Cassation “which establishes the validity of (her) standard contract,” the insurer said in a statement. However, there are currently 50 more appeals in the Court of Cassation, a spokeswoman for the insurance company said.

“Faced with an unprecedented legal situation where disagreements on both sides were in good faith, and first instance decisions and appeals were common, in 2021 we reached out to our insured restaurateurs with an amicable financial solution,” the group continues. Axa put a €300 million global envelope on the table to amicably compensate 15,000 restaurateurs.

“This outstretched hand, accepted by 80% of them, supported the reopening of activities in the context of the exit from Covid, while strengthening the links between the restaurant profession and Axa France’s distribution networks throughout the territory,” said Patrick Cohen, general manager of Axa France, in this statement.

For his part, insurance lawyer Guillaume Axille, an adviser to some 400 restaurateurs, says he is “quite surprised” by the “unexpected setback in case law” as the Court of Cassation has “a tendency in recent years to invalidate insurance exclusion clauses.” policies if they lack clarity. But “to the best of my knowledge, seven courts of appeal (Paris, Lyon, Bordeaux, Agen, Pau, Reims, Angers) upheld this exclusion clause, while five others annulled it (Bourges, Aix-en-Provence, Rennes, Toulouse, Poitiers) . ), so it’s good that it’s not clear,” he concludes.