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‘TOWIE’ Nightclub Fire £1 Million-Plus Damages Payout

Published: 02 November 2014, in categories: Legal Updates | Commercial Litigation Updates | News and Updates

A fire at well-known nightclub The Sugar Hut – where television show ‘The Only Way is Essex’ (TOWIE) was subsequently filmed – led to a rash of High Court litigation and a million-pound-plus damages award against insurance brokers.

The nightclub, in Brentwood, was described by its boss as 'a beautiful place teeming with beautiful people'. However, it went up in flames on the night of 13 September 2009 in what fire investigators concluded might well have been an arson attack.

The 'ornate and extravagant' venue, famed for its Thai artefacts, velvet drapes and exotic flowers, was shut for almost a year. Its then owner, Sugar Hut Group Limited, initially launched proceedings against its insurers after they refused to pay out under the club’s 'all risks' property damage and business interruption policy.

That claim was dismissed by a judge in 2010 after the insurers argued that there had been breaches of warranty and a failure to disclose relevant facts before the policy came into effect. Sugar Hut then sued its insurance brokers, who were accused of giving negligent advice which rendered the policy worthless.

The brokers admitted some, but not all, of the negligence allegations and had resisted Sugar Hut's claim. However they ultimately agreed to cover 65 per cent of the group's proven losses. Following a detailed debate relating to loss of profits arising from the fire, business interruption and other matters, the Court awarded Sugar Hut total damages of £1,090,021, which was substantially less than it had claimed.

The fire had broken out the year before TOWIE hit the airwaves. However, Sugar Hut had argued that the venue was attracting 'big spenders' and was on an upward trajectory even before the 'TOWIE effect' led to a dramatic increase in the venue’s fame and revenues.

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