When a farm delayed the inspection of its sheep as requested by the Agriculture and Rural Economy Directorate, it faced restrictions on the movement of its sheep and goats, as well as a cut in its subsidy. This case study showcases how Rural Protect intervened and helped the farm see through this complex period and regain its subsidies.
Business Type: Arable Farmer
Section of Cover: Company Legal Liability
Applicable Cover: Other Wrongful Acts
Circumstance: An insured farm received a letter stating a restriction from moving sheep and goats due to non-compliance with an inspection requested by the Agriculture and Rural Economy Directorate (ARE), a division of the Scottish Government.
Legal fees value: £11,748
The scenario: The insured farm was facing an especially difficult harvest, made worse by the wet weather. They described it as the worst harvest they had experienced in their approximately 50 years of farming.
During this period, the Agriculture and Rural Economy Directorate contacted them to schedule a sheep inspection for the following day. Given their situation, the farm informed the ARE that an inspection wouldn’t be possible at that time. They explained that, due to the unfavourable conditions, they had only a two-day window of decent weather to complete the harvest.
What happened: Following their conversation, the farm received a letter from the ARE stating that they would be restricted from moving sheep or goats due to their non-compliance with the inspection request. The letter also stated that they would not receive subsidy payments for that calendar year.
As a Rural Protect policyholder, the farm was able to contact our legal partner, rradar, who assisted in appealing against the ARE’s decision. rradar assembled a counsel of specialists with the relevant knowledge to provide advice and appear at the hearing.
The outcome: As a result of rradar’s support, the appeal was successful, and only a 5% reduction was applied to the subsidy payment, instead of the full 100%.
Things to consider: Farm businesses must be aware of inspection requirements set by a government agency and the potential consequences of delays or non-compliance, even during busy periods like harvest. They should also keep detailed records of all communications with authorities and understand whether their insurance policy provides legal support in complex situations. Most importantly, farms must act promptly and notify their insurer of any claims as soon as possible to minimise financial losses.
In this scenario, any delay in informing the insurer could have resulted in a 100% cut to the farm’s subsidies, causing significant financial strain. By acting promptly the farm was able to largely retain its annual subsidy as Rural Protect covered all costs incurred by the business for their legal representation.
If you would like to know more about Rural Protect and how we can support you, call us on 01653 609090 or email enquiries@hbunderwriting.co.uk.
