In light of the recent rioting taking place across the UK this note explores the general legal position in relation to compensation.
THE RIOT (DAMAGES) ACT 1886
- General Principles
Section 2 of the Riot (Damages) Act 1886 (the "Act"):
"(1) Where a house, shop, or building in [a police area] has been injured or destroyed, or the property therein has been injured, stolen, or destroyed, by any persons riotously and tumultuously assembled together, such compensation as hereinafter mentioned shall be paid out of [the police fund] of [the area] to any person who has sustained loss by such injury, stealing, or destruction; but in fixing the amount of such compensation regard shall be had to the conduct of the said person, whether as respects the precautions taken by him or as respects his being a party or accessory to such riotous or tumultuous assembly, or as regards any provocation offered to the persons assembled or otherwise.
(2) Where any person having sustained such loss as aforesaid has received, by way of insurance or otherwise, any sum to recoup him, in whole or in part, for such loss, the compensation otherwise payable to him under this Act shall, if exceeding such sum, be reduced by the amount thereof, and in any other case shall not be paid to him, and the payer of such sum shall be entitled to compensation under this Act in respect of the sum so paid in like manner as if he had sustained the said loss, and any policy of insurance given by such payer shall continue in force as if he had made no such payment, and where such person was recouped as aforesaid otherwise than by payment of a sum, this enactment shall apply as if the value of such recoupment were a sum paid."
- Under the Act the police (and thus ultimately local taxpayers) are required to compensate individuals and organisations who suffer loss or damage as a result of a riot.
- The definition of a riot is found in Section 1 of the Public Order Act 1986: "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…"
- The level of compensation that the police may have to pay under the Act to a person who has suffered riot damage is not capped, but may be reduced if he has in any sense contributed to the damage.
- Compensation is available to all persons and organisations who suffer a riot-related loss whether or not they are insured, and regardless of the perceived adequacy of the police response.
- Businesses which have insurance for the damage should claim on it in any event. Insurers are in turn able to claim under the Act for the amount of any claims they have to pay out to their policyholders in respect of riot-related losses and damage, by the doctrine of subrogation.
- The Act does not cover consequential losses arising from any damage to property. Therefore, whilst it is likely that business interruption insurance will provide a right to recover for those who have it, those who do not will have to bear this wider loss.
- Compensation must normally be claimed within 14 days (but see below).
- Recent Case Law
In Bedfordshire Police Authority v. D.A. Constable & Others  EWCA Civ 64, the owner of a detention centre sought to recover the costs of repair following a riot in 2002 from the Police Authority under the Act. Longmore LJ stated:
"Once one appreciates that the reason for the 1886 Act placing the burden of paying compensation to the victims of riot damage on the police authority is that the police are responsible for law and order and that they are (notionally) in breach of that responsibility, it seems to me, as an English lawyer, that the compensation payable is a sum which the police authority is liable to pay as damages."
In the related case of Yarl's Wood Immigration Ltd v Bedfordshire Police Authority  EWCA Civ 1110, the Court of Appeal ruled that the private operators of an immigration detention centre were entitled to bring a claim against the local police authority for compensation under the Act in respect of riot damage within the detention centre.
- Businesses affected by the recent riots will need to review their own insurance policy's terms and conditions.
- The ABI has written to the Home Secretary requesting that she instruct the police to issue a direction stating that the compensation claim notification period under the Act is extended from 14 to 42 days.
- The impact of the Civil Contingencies Act 2004, which allows the government to impose a wide range of emergency powers, may need to be considered if rioting continues for any length of time or gets worse; however, it seems unlikely that this will provide a rapid response to the present level of disorder.