A (not so) happy ever after? Engaged Couples v Wedding Venues v Insurers

Disputes / 23 September 2020

Before COVID-19, the wedding industry in the UK had a value of £10 billion each year. The Government’s varying restrictions in response to COVID-19 with strict lockdown and limited capacity has already had a major impact on the ability of wedding venues to generate revenue.  The Government’s latest announcement to limit weddings to a maximum of 15 guests, which could potentially last six months.  This will inevitably cause further concern for many couples who have booked a wedding venue, perhaps leading them to try to cancel entirely. But where does this leave the wedding venue?

At every good wedding, everyone wants to have their cake and to eat it. In the present circumstances it seems that all parties (the engaged couple, wedding venues and insurers) also want the same:

• Engaged couples want the flexibility of cancelling or postponing their wedding date (but also want to get their full deposit back if the wedding cannot go ahead due to the government’s restrictions);
• Wedding venues are facing significant losses if almost all their trade ceases (but continue to have on-going overheads which may be a real issue when the government’s furlough scheme ends and other critical dates hit, such as rent quarter day next week) and retaining a contractual deposit goes a little way to help counteract these losses. They will probably also have advised their customers to obtain wedding insurance to cover them against these or similar situations;
• Insurers are pushing back against claims under those wedding insurance policies asserting that policyholders should seek to recover their deposits from the wedding venue – or insurers are threatening to bring claims themselves on behalf of the policyholders against the wedding venue for recovery of deposits.

This vicious circle is also against the backdrop of non-binding advice on ‘cancellations and refunds in light of the pandemic’s impact on weddings’ issued by the Competition & Markets Authority. This advice seeks to protect consumers’ interests and potentially assists – but it is general advice that will be subject to individual contract terms agreed between venues and couples. Also relevant is the clarification now given for many businesses, including wedding venues, in being able to recover losses incurred under business interruption insurance cover following the recent test case decision. You can see our  summary of the decision here.

We have a stellar reputation in advising businesses within the hospitality sector, including wedding venues. We are acting for a number of these venues in protecting their position in the current climate, based on solid legal arguments relating to individual contracts, express terms and other relevant factors.

If you are a wedding venue who has received multiple claims from customers in respect of postponed or cancelled weddings, please do get in touch. Taking strategic advice now is key.