Where the person making a claim for fire damage under a policy had started the fire himself, if would be contrary to public policy, the general law of insurance and the specific terms of the policy to uphold that claim. In the case of Raymond Porter v Zurich Insurance Co  EWHC 376 (QB), the court held that, unless the claimant could establish that his mental state was so impaired that he did not know the nature and quality of the act he was doing or, if he did know it, that he did not know that what he was doing was wrong, then the exclusion for wilful and malicious acts set out in the policy would apply. To read the judgment, click here.
Porter v Zurich: The claimant, Mr Porter, made a claim against the defendant insurers, Zurich, under the terms of an insurance policy to recover losses arising out of a fire at his home. By a policy of insurance, Zurich had agreed to indemnify Mr Porter against loss of, or damage to, his home and contents. The policy included a general exclusion clause, applying to "any wilful or malicious act by a member of the family or by a person lawfully at or in the home". While suffering from a persistent delusional disorder and an alcohol problem, and after a series of disastrous life events, Mr Porter attempted to kill himself by setting fire to the house. Having set the fire, Mr Porter changed his mind and managed to escape unharmed, but the house was severely damaged and was rendered uninhabitable. Mr Porter claimed under the policy for the fire damage.
Zurich submitted that because Mr Porter had started the fire deliberately, he could not recover under the policy, because that would be contrary to public policy or the general law of insurance, or because the fire arose from his wilful or malicious act and was therefore excluded by general exclusion clause. Mr Porter argued that his mental illness meant that he was not acting as a free agent when he started the fire, and that he had therefore not started it deliberately, wilfully or maliciously. He argued that neither public policy nor the contractual exclusion clause prevented him from recovering under the policy.
The Court concluded that a claimant who sought to recover pursuant to a policy of insurance for losses caused by a fire which he himself had started was faced with the difficulty that his claim was contrary to public policy and contrary to general principles of insurance law. Moreover, Mr Porter's policy specifically excluded claims arising out of any wilful or malicious act. Whether an act was wilful or malicious depended on the perpetrator's state of mind, and it was sufficient if he was aware that what he was about to do risked damage of the kind that gave rise to the claim, or if he did not care whether there was such a risk or not. In order to succeed on the fire claim, Mr Porter had to prove on the balance of probabilities that, when he set the fire, he was insane within the meaning of the M'Naughten Rules, meaning that his mental state was so impaired that he did not know the nature and quality of the act he was doing or, if he did know it, that he did not know that what he was doing was wrong. Mr Porter had failed to prove such matters. Rather, the evidence made it plain beyond any doubt that he knew both what he was doing and that it was wrong. He was therefore unable to recover for losses caused by the fire.
A separate claim for 3 thefts from the property after the fire was upheld, despite the fact that Mr Porter had failed to cooperate with loss adjusters in the investigation of those claims. The court concluded that his failure to comply with the policy condition requiring him to cooperate in the investigation of the claim did not prevent him from recovering anything for the 3 thefts. Unless Zurich could prove that, had it been able to investigate the claims, it would have been entitled to reject them, Mr Porter's claims would not be bound to fail. Rather, the precise consequences of his failing to cooperate, so that Zurich faced real difficulties in assessing the merits of each of the claims, would have to be assessed at the quantum hearing.