End of the runway for Gatwick as top court kicks out insurance lifeline
Gatwick Investment’s appeal against insurance giant Liberty Mutual has been struck down over whether insurers can deduct government furlough payments from business claims.
The Supreme Court ruled that insurers do not have to pay an estimated £1bn to the hospitality and leisure companies involved in the case that suffered financial losses during the pandemic because the furlough scheme “reduced” business expenses.
Liberty Mutual had argued that if the insurance companies had to pay out full claims to businesses without taking away the furlough support payments, firms would be paid twice for the same expense.
The court agreed and said that it is unlikely the UK government “would have intended the employer to enjoy the benefit of being reimbursed twice for the same expense”.
Siding with Liberty, the court added that the payments could be viewed as “savings,” as the government had stepped in to pay employee wages, thereby reducing the costs companies had to bear.
The loss, alongside Gatwick Investment, which operates a group of hotel companies including the Crowne Plaza London Gatwick Airport, has also hit the UK’s largest horseracing group, Arena Racing, pub chain Fuller’s, and retail company Liberty, which were part of the case.
Reed Smith counsel Catherine Lewis told City PM this is “a landmark ruling for policyholders and insurers alike”, but those in the hospitality and retail sector “will have been hoping for a different result.”
Gatwick under the legal lens
The furlough saga comes to a head as Gatwick Airport also faces legal scrutiny over its plans to use a second runway, following a £2.2bn scheme approved in September 2025 by the transport secretary, Heidi Alexander.
The High Court in January heard an environmental group argue against the government’s decision to grant approval for the airport’s Northern Runway, which it has used since 1979, to be used for a further 100,000 flights a year.