Ruling could impact Bartoline

Bedfordshire Police Authority v Constable (Queen's Bench Division - 20 June 2008)

Under the Riot (Damages) Act 1886 police authorities are obliged to pay "compensation" to owners of property damaged by persons "riotously and tumultuously" assembled within their area. Following such an event in 2002 Bedfordshire Police paid substantial sums under the 1886 Act to the owners of Yarls Wood Detention Centre, and then sought to recover such sums under their public liability policy, which afforded indemnity against "all sums which the assured may become legally liable to pay as damages for ... accidental damage to property."

Insurers argued that such wording only covered liability - typically tortious - to pay "damages" for actionable wrongs committed by the assured and thus did not respond to statutory compensation schemes such as that created by the 1886 Act. The judge disagreed, holding both that the parties (absent an exclusion) must have intended that "compensation" payable under the Act would be covered and that in any event the Act did create "a liability for an actionable wrong amounting to a breach of duty".

Comment

Of immediate interest only to insurers of police authorities this decision might also be seen as throwing doubt on the recent Bartoline case, which decided that similar wording did not cover liability to pay "clean-up" costs, following pollution, under the Water Resources Act 1991. The courts are increasingly regarding "damages" as, effectively, synonymous with "compensation." - Philip Vallance QC, BLM London.

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