The world watched in disbelief as a wave of lawlessness swept from Tottenham on 6 August 2011 throughout London and across the UK. For many, homes, premises and livelihoods have been wiped out in a matter of days. As the UK counts the costs of repairing the damage, we set out below a guide to making a claim under the Riot (Damages) Act 1886.
Introduction
The Riot (Damages) Act 1886 (the Act) places a strict liability on the police fund to compensate any person (including corporate bodies) who/that has sustained losses as a result of acts of theft or damage to their property arising from a riot. Ordinarily, claims must be made within 14 days of the damage or theft taking place and must follow the format prescribed in the Riot Damage Regulations 1921 (the Regulations). However, on 11 August 2011, the UK Government announced an extension of the deadline to 42 days for claims to be submitted. In addition, a simplified Riot Damages Act Claim Form has just been released.
What is a riot?
"Riot" for the purposes of the Act is defined by Section 1 Public Order Act 1986 which provides:
"(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.
(2) It is immaterial whether or not the 12 or more use or threaten unlawful violence simultaneously.
(3) The common purpose may be inferred from conduct.
(4) No person of reasonable firmness need actually be or likely to be, present at the scene.
(5) Riot may be committed in private as well as in public areas."
At the time of writing, the Metropolitan Police has not declared the disturbances as a riot. If a riot is not declared by the police the burden will rest on a claimant to provide sufficient evidence to satisfy the definition and enable recovery under the Act. In any event, each incidence of damage would need to be assessed on a case-by-case basis.
Based on an assumption that recent incidents would satisfy the requisite definition of "riot", the key aspects of the claims process that arise under the Act are outlined below.
Who can claim?
Section 2(1) of the Act provides as follows:
"Where a ... house, shop or building ... has been injured or destroyed, or the property therein has been injured, stolen or destroyed, by any persons riotously and tumultuously assembled together ... compensation 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 should be had to the conduct of the said person ..."
It follows that any owner of property damaged by a riot is entitled to compensation direct from the police fund in that area, irrespective of any negligence or blame which may or may not attach to the policing of said riot. Where such losses have been indemnified by insurers, Section 2(2) of the Act enables the insurer to claim directly for such losses.
What losses may be claimed?
The Act only compensates for physical damage to a "house, shop or building" and the theft or damage of any property contained therein arising from the riot. "House, shop or building" includes any premises attached or annexed to the property which enhances said property or its use.
It is unlikely that a claimant would be able to claim for losses arising from personal injury or for any property which is not located within the confines of a building. For example, a claimant would not be able to claim for a car parked on the street although it would be able to claim under the Act if this same car was parked in a garage.
Pursuant to the provisions of the Act, when assessing the claim the Compensating Authority shall "fix such compensation as appears to them just". If a claimant has insurance then this must be stipulated on the form and credit must be given in the form of a deduction from the amount claimed, which represents the amount of indemnity that would be available. No legal costs can be claimed under the Act.
When and how is the claim made?
Ordinarily, all claims must be made within 14 clear days after the day of the damage and/or theft. However, following pressure from the ABI (amongst others) the Government has extended the deadline to 42 days.
Claims may be made on the claim form prescribed by the Regulations, or on the new, simplified claim form which has just been released. A copy of the new Riot Damages Act Claim Form is attached to this briefing note.
A claimant may be required to verify the claim by making a statutory declaration and may have to procure additional declarations to satisfy the police authority that the provisions of the Act are satisfied and that the amount of compensation claimed is just.
As a precautionary measure, it is advisable that claims are submitted on behalf of both insureds and insurers (where appropriate). Where insurers are ultimately entitled to do so, they should bring a claim in their own name. However, waiting until such time as the insurer actually suffers a loss, that is when any degree of an indemnity has been made under the policy, may lead to delay beyond the prescribed deadline.
Who should the claim be made to?
Section 3(1) of the Act provides that claims for compensation should be made to the compensation authority of the police area in which the events took place. The relevant compensation authority for Greater London will be the Metropolitan Police District Fund, and claims relating to the Metropolitan area should be addressed to the Director of Resources (currently Anne McMeel). For areas outside of London, claims should be addressed to either the clerk to the County Council, or the clerk to the local police authority, depending on the county involved.
Right of Appeal
In circumstances where a claim is either refused by the compensation authority, or the amount of an award is unsatisfactory, a claimant can pursue a civil claim against the compensation authority to recover the amounts in dispute, up to the value of the original claim, but would be liable to pay any adverse costs in the usual way.
Business Interruption
Whilst it is clear that physical property loss or damage may form part of a claim under the Act, the position in relation to Business Interruption (BI) losses is less clear. BI losses, such as loss of rent or trade, are not specifically provided for in the claim form prescribed by the Regulations or in the new, simplified claim form. However, until this ambiguity is resolved, BI losses should be included in the claim form to err on the side of caution. There is growing speculation that such losses may well be covered although it remains to be seen whether such losses will ultimately be accepted by the compensation authority.
In the event that BI losses are rejected by the compensation authority, the precise wording of any relevant policy will need to be scrutinised to determine the extent of such cover. Policies that include extensions for Contingent Business Interruption or loss of attraction will likely make recovery of such losses more straightforward.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
