The Central Bank has said it expected FBD insurance to pay all "reasonable costs" of the publicans who successfully challenged the insurance company about a failure to compensate them for Covid-19 disruption.

Its position was set out in a letter from the bank read to the Commercial Court this morning.

The court has previously ruled that the costs should be awarded in the normal way, but it said this was subject to any position taken by the Central Bank.

The previous ruling would have meant the pubs were likely to receive the minimum reasonable amount they required to fight the case but they would not necessarily be reimbursed for all the costs they incurred.

The Central Bank's letter makes clear that it did not expect the publicans who took the test cases to be liable for any costs, supporting the position taken by three of the pubs in last month’s hearing.

The pub owners indicated today they would engage with FBD on the matter, but there may now have to be another hearing on costs.

The four test cases were taken by Dublin pubs, Sinnotts Bar, the Leopardstown Inn and Lemon & Duke as well as Sean’s Bar in Athlone.

A hearing to decide on the amount of damages to be awarded to the pubs is due to begin on 6 July.

Earlier this year, Mr Justice Denis McDonald found that a policy sold by FBD covered the losses sustained by the pubs having to close due to the pandemic.

The policy included a clause that cover was only valid where the pub had to close because there was an outbreak of an infectious disease within a 25 mile radius of the premises.

FBD claimed this was not valid in this case because the closures were caused by a global pandemic.

But Mr Justice McDonald said the cover was not lost where the closure was caused by nationwide outbreaks of the disease provided there was an outbreak within the 25 mile radius and that it was one of the causes of the closure.