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Public Must Pay for Warehouse Gutted in Summer Riots

Published: 18 September 2013, in categories: Legal Updates | Commercial Property Updates | News and Updates

In a ruling of central importance to property owners whose premises are damaged or looted during public disturbances, the High Court has ruled that a public policing authority must bear much of the multi-million-pound cost after a warehouse was gutted and its contents stolen or destroyed during the August 2011 riots.

However, in giving up-to-date guidance on the correct interpretation of the Riot (Damages) Act 1886, the Court found that the right to public compensation only extended to physical damage to the warehouse and its contents and not to other consequential losses, including loss of profit or rent.

The warehouse was raided by a group of around 25 youths at the height of the summer riots. The mob smashed its way its way into the premises using a variety of makeshift weapons and ran through the building, looting stock. Petrol bombs were thrown and the building was left to burn. Although the incident only lasted around three minutes, the warehouse blazed for 10 days and was totally destroyed.

Insurers who had to pay out for the loss, as well as uninsured owners of destroyed or stolen stock, sued the Mayor’s Office for Policing and Crime (the MOPC) for more than £60 million, arguing that they qualified for public compensation under the Act. It was submitted that the incident undoubtedly amounted to the criminal offence of riot and that the damage had been caused by ‘persons riotously and tumultuously assembled’ within the meaning of the Act.

In resisting the claims, the MOPC insisted that the incident was a planned criminal enterprise that did not fit the requirements of the Act. The raiders had co-ordinated their activities by mobile phone; their approach to the warehouse had not been furtive and there had been little likelihood of opposition, let alone large-scale confrontation with the police or others.

Ruling in favour of the claimants, the Court noted that the ‘frenetic, agitated, chaotic’ incident had involved a substantial group, with some raiders ‘almost dancing around’ as others broke their way into the warehouse. A large group had ‘swarmed’ into the building once entry was achieved and the ‘wanton’ violence was such as would have caused a person of reasonable fortitude to fear for their personal safety.

The Court accepted that the law enforcement authorities ‘could notionally have responded’ to the incident and that the principal rationale for the provision of compensation under the Act was satisfied on the facts of the case. However, the Court went on to rule that, on a proper construction of the Act, the compensation payable by MOPC was limited to physical damage to the warehouse and the stock it contained and that the right to public compensation did not extent to loss of profits, loss of rent or other consequential losses.

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