Constable v Bedfordshire Police Authority
| Jurisdiction | England & Wales |
| Judgment Date | 12 February 2009 |
| Date | 12 February 2009 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal, A3/2008/1609
Longmore, Hooper and Peter Gibson LJJ
G Kealey QC and A Wales (instructed by Reynolds Porter Chamberlain LLP) for the syndicate; C Edelman QC and A Burns (instructed by Eversheds LLP) for the Police Authority
Whether liability under the Riot (Damages) Act 1886 fell within the ambit of the public liability section of a police authority's insurance policy
By the Riot (Damages) Act 1886 police authorities are liable for theft or destruction of certain types of property in their area caused by "any persons riotously and tumultuously assembled together".
The Police Authority and Chief Constable together took out insurance for the period 1 April 2001 to 31 March 2002 under policies which were in 2 layers. A primary layer included public liability cover for amounts up to £2M. A Lloyd's syndicate insured the Authority on an excess layer which included public liability cover for amounts greater than £2M million and up to £38M. The policies were intended to insure the Authority and its employees, and the Chief Constable and police officers reporting to the Chief Constable, against public liability for "accidental" injury or damage falling within the extent of the cover. They provided for an indemnity in respect of "all sums which the ASSURED may become legally liable to pay as damages... for ... (b) accidental DAMAGE to PROPERTY ...occurring within the Geographical Limits during the Period of Insurance arising out of the BUSINESS".
On 14 February 2002 an outbreak of violence at the Yarls Wood Detention Centre within the Authority's police area, along with a fire which broke out during the course of the violence, was associated with various types of injury to or theft or destruction of property. Claims were made against the Authority under the 1886 Act in respect of damage to property that occurred in the course of the violence. ARC accepted that any liability on the part of the Authority to meet these claims fell within the Underlying Policy. The syndicate declined to accept that this was so as regards the Excess Policy.
The syndicate accepted that the claims were for "accidental" damage, on the basis that the damage in question was not intentionally caused by the assured. However the syndicate denied that these claims were within the extent of the cover. This was because (i) liability under the 1886 Act was not for "damages" within the meaning of the policy which covered only liability to pay damages to members of the public for
actionable wrongs committed by the assured, typically tortious liability, (ii)(a) the liability only arose if the accidental damage arose out of the business (as opposed to the legal liability to pay arising out of the business), and (ii)(b) the damage resulting from the violence did not arise out of the business.
The Authority sought a declaration that the syndicate was obliged to provide an indemnity against any liability to pay compensation under the 1886 Act. At first instance the Authority succeeded: [2008] Police LR 240. The syndicate appealed.
Longmore LJ:
Introduction
1. The issue in this appeal is whether a police authority's obligation, under the provisions of the Riot (Damages) Act 1886, to compensate property owners for damage to their property caused by a riot is covered by the public liability section of an insurance policy, which promises to indemnify the assured authority in respect of sums which the authority "may become legally liable to pay as damages for accidental damage to property arising out of the business" of the authority. This requires an analysis of the insurance policy and of the Riot (Damages) Act 1886 ("the 1886 Act") in the light of what happened at Yarls Wood Detention Centre ("Yarls' Wood") in February 2002.
2. Yarls' Wood is in the geographical area of the Bedfordshire Police Authority ("the BPA") and is a contracted-out immigration detention centre operated by Yarl's Wood Immigration Ltd ("YWIL") who, with the agreement of the Home Secretary, sub-contracted their obligations to GSL UK Ltd ("GSL"), a company formerly known as Group 4. Persons
detained at the centre are held there pursuant to powers contained in Sched 2 of the Immigration Act 1971 which entitles the Home Secretary to detain persons pending decisions to give or refuse them leave to enter the UK and pending decisions about their removal from the UK. On the night of 14th February 2002 there was a major disturbance at the Centre which caused property to be destroyed by "persons riotously and tumultuously assembled together", to use the wording of the 1886 Act. Almost half the premises were destroyed by fire and some millions of pounds of damage resulted. YWIL and GSL have brought claims for compensation against the BPA pursuant to the 1886 Act. The present status of those claims is that they have been rejected first by the BPA and now by Beatson J mainly on the basis that the 1886 Act, on its true construction, confers rights on private citizens in relation to their property, not on those who were themselves responsible for maintaining law and order at the property. Permission to appeal has been given. Although the BPA has so far prevailed, they consider it would be helpful for the position in relation to their own insurers to be resolved before deciding whether and how to react to YWIL and GSL's appeal.
The Insurance
3. The defendant liability insurer is an excess insurer who has provided insurance in the same terms as the underlying cover. That cover defines the Assured as the Bedfordshire Police Authority and the Chief Constable of the Bedfordshire Constabulary and defines Business as:-
"the usual activities of the ASSURED as a Police Authority which is held to include"
and then a number of incidental examples are set out.
4. Section 1 of the Casualty segment of the policy is the Public Liability section and cover is there afforded in the following terms:-
"The COMPANY will indemnify the ASSURED in respect of all sums which the ASSURED may become legally liable to pay as damages and claimants' costs and expenses for:
(a) accidental Injury to any person (other than an EMPLOYEE if such Injury arises out of and in the course of employment by the ASSURED).
(b) accidental DAMAGE to PROPERTY:
(i) not belonging to nor in the custody or control of the ASSURED.
(ii) not in the custody or control of an EMPLOYEE.
(iii) which has been the subject of illegal distraint.
……
(d) accidental DAMAGE to buildings including their fixtures and fittings which are leased, hired or rented by the ASSURED but excluding:
(i) DAMAGE to their contents.
(ii) Liability assumed by the ASSURED under a tenancy or other agreement which would not have attached in the absence of such agreement.
(iii) The first £100 of each claim for DAMAGE unless caused by fire or explosion.
occurring within the Geographical Limits during the Period of Insurance arising out of the BUSINESS."
5. The long title of the 1886 Act in its original form was "An Act to provide Compensation for Losses by Riots." This preceded a preamble in the following terms:
"Whereas by law the inhabitants of the hundred or other area in which property is damaged by persons riotously and tumultuously assembled together are liable in certain cases to pay compensation for such damage, and it is expedient to make other provision respecting such compensation and the mode of recovering the same:"
6. Section 1 sets out the short title: "The Riot (Damages) Act 1886".
7. Section 2 has a marginal note, "Compensation to persons for damage by riot". As amended it reads:
2(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 herein-after 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...
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