In the wake of the violence witnessed in English cities in the
last few days, the Prime Minister has confirmed in a Commons
statement this afternoon that any individual, homeowner or business
that has suffered property damage in a riot can seek compensation
under the Riot (Damages) Act 1886, whether they are insured or
not. Further, the period for making a claim under the Act
will be extended from 14 to 42 days.
The extension of time will be welcomed by insurers who will, at
this stage, be busy trying to ascertain their exposure, including
whether or not their property damage/business interruption policies
provide cover. (There may, for example, be riot or other civil
unrest exclusions which exclude these losses.) The extension
will also allow time to address the detail of the claim form which
anyone seeking compensation under the Act is required to
submit.
The Riot (Damages) Act 1886
The Act affords a 'person' whose property has
been damaged by people 'riotously and tumultuously
assembled together' a right to compensation on a strict
liability basis from the local police authority. Importantly,
'person' includes a corporate body, such that the
Act effectively gives an insurer, which pays losses that fall
within the remit of the Act, a statutory right of subrogation
against the local police authority.
The Act last received publicity following the major fire and riot
at Yarl's Wood Immigration Detention Centre in 2002. CMS
Cameron McKenna acted for the property damage insurers of
Yarl's Wood in submitting the necessary claims under the
Act. Among the issues we successfully dealt with in
submitting those claims are the following:
The Requirements of 'Riot' and 'Tumult'
The meaning of 'riot' is contained in the Public Order Act 1986. Section 1 states that:
'(1) Where 12 or more persons who are present together use or threaten unlawful violence for a common purpose and the conduct of them (taken together) is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety, each of the persons using unlawful violence for the common purpose is guilty of riot.'
Amongst other things, this means that it will be necessary to show that those involved in the recent disturbances were, in fact, pursuing a common purpose rather than separate individual purposes. Riot, of itself, will not be sufficient to trigger the Act in any event; there must also be 'tumult'. Dwyer v Metropolitan Police Receiver [1967] considered this to be a group of '...considerable size...an assembly in which the persons taking part are indulging in agitated movement; an excited, emotionally aroused assembly'.
Practical Steps for Insurers
If the requirements of damage to property, riot and tumult are all met, then certain rules must be complied with when claiming. These include the following:
- All claims must be made in writing and delivered to the relevant authority, within (following today's announcement) 42 clear days after the day on which the damage occurred. Both the start date and the applicable addressee will depend on the location of the riot;
- All claims must be made using a statutory prescribed form. This form is detailed and requires a breakdown (including accurate quantum) of the loss suffered.
Consideration will also need to be given to ascertaining the
identity of the proper claimants, particularly where the property
damaged is leasehold, and the appropriate measure of
compensation. Where the claimant is a lessee it is prima
facie the diminution in value of the leasehold interest.
While the extension will be welcomed by those seeking to submit
claims under the Act, 42 days is still a tight deadline, especially
given that, in our experience of dealing with these claims, it is
absolutely crucial that the application is completed as fully and
as accurately as possible.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 11/08/2011.