Riot damage - who covers it?

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 first appeared in Law-Now, CMS Cameron McKenna's free online information service, and has been reproduced with their permission. For more information about Law-Now, click here.