In the wake of the riots of August 2011, the government took steps to update and overhaul the Act then governing the provision of compensation following a riot, namely the Riot (Damages) Act 1886 which, for example, contained no provision for compensation for damage to a car, because they’d barely been invented. The Riot Compensation Act 2016 (“the Act”) received Royal Assent in 2016 and will come into force on 6 April 2017.
For our comment in more detail on the aftermath of the riots in 2011, click here for our newsflash The London Riots: An 1886 Statute Grappling with a 21st Century Problem. We considered the legislative framework as it was in 2011 and set out the journey through the courts of the dispute between insurer Mitsui and the Mayor’s office for Policing and Crime to the Supreme Court as to what recovery could be made from the police following the riot at the Sony Distribution Warehouse in Enfield.
The Riot Compensation Regulations 2017
The Riot Compensation Regulations 2017 (“the Regulations”) which also come into force on 6 April 2017, are the result of a consultation with the police in December 2016, the ABI and large insurance companies. They provide for the practical implementation of the main provisions of the Act, including in particular, the setting out of the claims procedure for ordinary claimants and insurers. Such claims are for the recovery of direct loss of property subject to a £1million cap; there’s no recovery for consequential losses.
The Regulations make one adjustment to the definition of property which will now be covered by the Act, amending and expanding section 2(3) of the Act. The effect is that damage to motor vehicles or trailers, or devices intended to be attached to a motor vehicle, will be covered by the Act such that damages will be recoverable, as long as the conditions within Schedule 1 of the Act are met.
What do the Regulations mean for you?
The Regulations provide further detailed technical requirements to ensure that the claims are properly processed.
Key points to note are:
- Two or more people can make separate claims in respect of the same property if they can show that they have a legal interest in it (reg 3);
- No person may make more than one claim relating to property at the same address, i.e. the claims cap of £1million cannot be circumvented by splitting out elements of a claim (reg 4);
- A claim must generally be made within 43 days of the end of the riot and supporting evidence provided within 91 days with some provision for those limits to be extended (reg 6);
- Replacement goods and property are allowed on a new-for-old basis for most property, with the exception of motor vehicles, business stock and second-hand stock which either are subject to depreciation or valued on a replacement basis (reg 9-12);
- If a claimant’s home has been damaged to the extent that they need to move to alternative accommodation, this is limited to a 132 day maximum period from the date on which their home was made uninhabitable (reg 15); and
- A claim made by someone who took part in the riot or the destruction of property may be refused (reg 16) and there are further provisions to reject fraudulent claims.
Whilst the Regulations largely achieve their aim of creating a simple and easily applied framework within which to bring these claims, there is still scope for dispute, for example, in whether a claimant has had extenuating circumstances allowing them to present a late claim, or in the definition of a postal address; would property left in the common parts of a building be considered under the same postal address as an apartment within it?
Ultimately, the test of both the Act and regulations will only come following another riot or major civil disturbance. In the meantime, insurers may wish to look to see whether their policy wording mirrors the recovery under the Act to ensure that if they do have to indemnify their insureds, they maximise their chances of making a recovery under the Act.