On 8 August 2011 the Sony Warehouse in Enfield, Essex, was broken into, looted, and then burned down by some 25 youths. Mitsui Sumitomo Insurance Co (Europe) Ltd, Tokio Marine Europe Insurance Ltd and Royal & Sun Alliance PLC (the insurers) paid out under material damage and business interruption insurance policies, and brought a claim against the Mayor’s Office for Policing and Crime (the Police Authority) for compensation under the Riot (Damages) Act 1886 (the Act).
The judgment decided two preliminary issues:
- did the claimed losses arise out of damage by "persons riotously and tumultuously assembled together"?
- are consequential losses (including loss of profit and loss of rent) in principle recoverable under the Act?
The judge found in favour of the insurers on the first issue, but in favour of the Police Authority on the second. It is understood that both parties have been given leave to appeal.
The finding on the first issue is good news for those with property damage claims arising from the Sony Warehouse loss, and possibly more generally, given what the judge said about what constitutes a riotous and tumultuous assembly. However, the decision on consequential loss will be very disappointing for insurers generally, as well as, of course, those with uninsured consequential losses, whose claims have been on hold pending this decision. No doubt they will be waiting with bated breath to hear whether there will indeed be an appeal on the second issue, and will follow the progress of such an appeal keenly.