Claims for compensation under the Riot (Damages) Act 1886
September 7, 2011
The Riot (Damages) Act 1886 is designed to compensate people and businesses which suffer losses following riots. It also enables insurance companies which have paid out claims under policies to recover the cost of such claims from the relevant police authority in charge at the place of the riots. The thinking behind the Act appears to be that it is right and proper that where, as a society we put in place a system to protect us from riots (ie, the police), and that system, for whatever reason, fails to do so, then it is appropriate that that system compensates us, the public.
There has been much debate in the press, as well as within the insurance and legal industries, as to whether businesses can claim compensation under the Act for consequential losses, ie for losses other than damage to property, such as loss of profits. The government has, perhaps unsurprisingly, stated that only damage to property can be compensated under the Act. If consequential losses were to be allowed then the cost of the riots to the police and, by extension, the taxpayer would rise exponentially.
However, having reviewed the Act and the relevant Regulations, it is unclear on what basis consequential losses would be excluded.
The Act states:
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…
Claims for compensation under this Act shall be made to the compensation authority of the police area in which the injury, stealing or destruction took place, and such compensation authority shall inquire into the truth thereof, and shall, if satisfied, fix such compensation as appears to them just
It is in our view arguable that loss arising from the destruction of property can properly be said to include consequential loss. Further, the only restriction on the calculation of the loss is limited to what appears “just”, albeit what is “just” is to be determined by the compensation authority itself leading, perhaps, to a conflict of interests.
In any event, until the issue is decided, businesses may wish to include consequential losses in claims for compensation made to the body set up by the government in Glasgow for the purpose of handling the claims but ensure that they do so within the 42 day time limit from the date of the damage to property during the riot.
10 things you need to know about the law
May 27, 2010
1. If you have a small claim against a financial services professional:
Financial Ombudsman Service: www.financial-ombudsman.org.uk
Part XVI of the Financial Services and Markets Act 2000: www.opsi.gov.uk/acts/acts2000/ukpga_20000008_en_19#pt16
2. If your insurer refuses a claim unfairly:
Chapter 8 of the FSA’s Insurance Conduct of Business Sourcebook: www.fsahandbook.info/FSA/html/handbook/ICOBS/8/1
3. If you have a claim for less than £5,000:
The Small Claims Court: www.hrothgar.co.uk/YAWS/framecpr/part27.htm
4. If your employer has treated you unfairly:
Employment Tribunal: www.opsi.gov.uk/si/si2004/20041861.htm#sch1
5. If you’ve bought something that doesn’t do what it says on the tin:
Unfair Contract Terms Act: www.opsi.gov.uk/RevisedStatutes/Acts/ukpga/1977/cukpga_19770050_en_1#pt1-ch1-pb4-l1g9
6. If you’re being strong-armed by someone who’s provided you with a poor service:
The Unfair Terms in Consumer Contracts Regulations 1994: www.opsi.gov.uk/si/si1994/Uksi_19943159_en_1.htm
7. If you need free general advice:
Citizens’ Advice Bureau advice Guides: www.adviceguide.org.uk/
8. If they can’t help, try Delia Venables’ really useful website: www.venables.co.uk/individualorg.htm
9. If you want to find a solicitor to make a claim:
Professional negligence: www.fenchurchlaw.co.uk
Insurance: www.fenchurchlaw.co.uk
Commercial disputes: www.fenchurchlaw.co.uk
Employment: www.josephsuttonsolicitors.com
Personal injury & clinical negligence: www.priceandslater.co.uk
10. When all is lost and you just need a good laugh: www.buglear-bate.co.uk
Financial Services Act 2010 – class actions removed
April 26, 2010
The Financial Services Act 2010 received Royal Assent on 08.04.2010, being amongst the last few pieces of legislation rushed through parliament before it was dissolved.
One of the most interesting and controversial parts of the bill had been the introduction of collective actions for consumers allowing them to bring American style class actions against financial services firms, including banks and insurers as well as smaller firms providing financial advice.
However, these proposals received stiff opposition from Tory peers and the government dropped the measures in order to see the bill through parliament.
What has been included in the Act though is an amendment to previous legislation which now allows the FSA to draw up consumer redress schemes where it considers there has been “widespread or regular failure” from financial services firms and that as a result consumers have lost, or may lose, money. Previously such schemes had to be approved by the Treasury before being implemented.
Appetite remains high amongst the Labour party though for such class actions and redress schemes and it has been suggested that the proposals would be looked at again in the new parliament. How they would fare in an increasingly likely hung parliament is difficult to predict though.
Third Parties (Rights Against Insurers) Act 2010
The Third Parties (Rights Against Insurers) Act 2010 which received Royal Assent on 25.03.2010 has amended previous legislation governing the relationship between insurers and claimants. Its intention is to make it easier, quicker and cheaper to make a claim against the insurers of insolvent defendants.
The previous Act required a claimant to establish an insolvent defendant’s liability before being able to pursue a claim against insurers. This meant issuing proceedings against the defendant before being able to issue (separate) proceedings against the insurer. The 2010 Act now allows claimants to issue proceedings directly against the insurer in which all issues, including the defendant’s liability, can be established.
Insurers are now no longer entitled to rely on conditions in the policy made impossible by the insured’s insolvency or terms which render the policy ineffective due to the insured’s insolvency. The insurer is still though entitled to rely on defences against the claimant which it could have used against its own insured.
Quinn Insurance enters administration
March 31, 2010
Irish insurer Quinn Insurance, which has a substantial London Market presence, has gone into administration, leaving their policyholders in a potentially precarious position. Solicitors may be particularly at risk.
Quinn is reported to insure in the region of 2,000 firms of solicitors. However, if Quinn is removed from the Law Society’s list of approved insurers (which only includes insurers which are able to meet certain criteria, including being solvent), those solicitors will be required to find alternative insurance elsewhere, or face being placed into the Assigned Risks Pool. In either case, policyholders are likely to find the cost of obtaining alternative insurance to be prohibitive.
Also under pressure as a result of Quinn entering administration are the insurance brokers who recommended that their clients buy policies from Quinn. So far as their clients incur additional costs as a result of having to find cover with alternative insurers or, in the worst case, if Quinn becomes unable to pay policyholders’ claims, the brokers that placed insurance with Quinn are likely to face mis-selling claims from their clients.
Our comments on film finance schemes for the Financial Times
March 8, 2010
Film finance schemes are back in the news for the wrong reasons, with HMRC investigating claims for tax relief by investors. For our article on the problems facing investors from last weekend’s Financial Times, please click on the following link: http://www.ft.com/cms/s/2/74d48790-287c-11df-a0b1-00144feabdc0.html
Our thoughts on the Jackson review
February 24, 2010
Lord Justice Jackson’s review of litigation costs has two interrelated, but distinct strands. Firstly, he makes recommendations which are aimed at reducing the cost of the litigation process overall. Secondly, he makes recommendations which are aimed at shifting the burden of what costs remain from one place to another.
The first strand (reducing costs overall) is in the interests of both claimants and defendants, and Lord Justice Jackson’s recommendations should be welcomed by everyone involved in the dispute resolution process. However, Lord Justice Jackson’s approach to the second strand (shifting the burden of what costs remain) is, in our view, of real concern.
At present, the cost of litigation is borne primarily by defendants whose actions have caused others (successful claimants) to suffer loss. Many of Lord Justice Jackson’s recommendations will, if implemented in their current form, have the effect of shifting the costs burden from (unsuccessful) defendants to (successful) claimants.
The difficulty with this approach is that many defendants (employers, professional advisers, property owners etc) are able to spread the cost of any claims which they may face by insuring against them. In this respect, the defendants “stand together”. Claimants, on the other hand, “stand alone”, as we do not, in this country, have a viable market for allowing potential claimants (i.e. all members of the public) to insure against the risk of suffering a loss due to someone else’s actions, and having to incur the cost of pursuing a claim. As a result, whereas defendants are, in many cases, able to spread the cost of becoming involved in a dispute, claimants are unable to do so.
Unless commercially appropriate ”before the event” insurance becomes widely available, the only way to spread the costs of the litigation process in a way that is financially manageable for those involved, is for those costs to be borne primarily by those who are able to stand together, as opposed to those who necessarily stand alone.
For these reasons, it is our view that the recommendations from the Jackson report which are aimed at shifting costs from one place to another are socially undesirable, and should be opposed.
Financial Services Bill progress
February 16, 2010
The Financial Services Bill is due to receive its second reading in the House of Lords (when all aspects of the bill will be debated) on 23.02.2010. In its current form the Government bill, which has so far remained intact throughout its progress through the House of Commons, proposes to allow consumers to join together to bring claims against FSA-regulated professionals (such as financial advisers and insurance brokers) in cases where there has been a mass failure of practice which has affected significant numbers of consumers. If the proposals become law, they will reduce the cost to consumers of making claims against financial services professionals which arise out of endemic (as opposed to “on-off”) mistakes or bad advice.
We’ll be tracking the progress of the bill until it receives Royal Assent on the Fenchurch Law twitter feed.
Fenchurch Law twitter feed
February 8, 2010
The Fenchurch Law twitter feed is now live! From now on, we’ll be tweeting daily, helping to keep you up to date on new developments in the law relating to professionals and insurance. We’ll be highlighting key cases and changes to the CPR, and we’ll also be keeping tabs on ongoing processes such as the Law Commissions’ review of insurance contract law, and the follow-ups to Lord Justice Jackson’s report on costs.
Welcome to Fenchurch Law
February 5, 2010
Welcome to the Fenchurch Law website. We are a new law firm, built on a wealth of experience. As you’ll see from looking around the site, we’ve spent most of our careers to date acting for insurers, and defending professional negligence claims. At Fenchurch Law we will be focusing exclusively on pursuing professional negligence claims on behalf of claimants, and on acting for policyholders in relation to insurance coverage disputes.
We believe that we have assembled a team whose knowledge of the insurance market is unrivalled amongst Claimant lawyers. And we have close ties with After the Event insurers that gives us an un-matched ability to protect our clients from the costs-risks involved in the litigation process. Furthermore, we are committed to ensuring that if our clients’ claims are valid, our clients won’t pay us any more than we are able to recover from their opponents.
If you have a problem that we may be able to help with, please give us a call.
David & Rob
