POLICE – DAMAGES
COMPENSATION : CONSEQUENTIAL LOSS : DAMAGE TO PROPERTY : POLICE AUTHORITIES : RIOT : TUMULTUOUS ASSEMBLY : RIOT (DAMAGES) ACT 1886 s.2(1)
The Riot (Damages) Act 1886 s.2(1) provided compensation only for physical damage to property and not for consequential losses such as loss of profits or rent.
The appellant police authority appealed against a decision ( EWCA Civ 682,  Q.B. 180) concerning its liability to pay compensation for losses caused by riot damage.
The appeal arose from three conjoined claims brought against the police authority pursuant to the Riot (Damages) Act 1886 s.2(1). During a period of rioting in August 2011, a gang of youths had broken into a distribution warehouse, looted it and burnt it down. The owner of the warehouse, its occupier and three companies which had stored goods there all sustained losses as a result of the looting and the fire. Their losses included the physical loss of the warehouse and its contents together with consequential loss including business interruption losses, loss of profits and loss of rent. The respondents, who comprised the three companies and the insurers of the owner and occupier, sought to recover those losses from the police authority under s.2(1). At first instance, the judge held that s.2(1) provided compensation only for physical damage to property and not for consequential losses such as loss of profits or rent. The Court of Appeal reversed that finding.
The police authority argued that it had been wrong to do so.
HELD: The words of the 1886 Act should be construed in the light of the prior legislation. The Riot Act 1714 used open-textured wording, requiring the payment of “damages” to persons injured or damaged by the demolition of their houses. The courts’ liberal interpretation of that Act extended the liability of the “hundred” (hundreds being predecessors of police authorities) to cover physical damage to household goods and furniture but no further. That limited extension was incorporated into the Seditious Meetings Act 1817. Over time, statutory innovations extended the scope of the compensation to cover agricultural buildings, mills, commercial and industrial buildings, the contents of those buildings, and mines and collieries. There was nothing in the wording of the 1886 Act that supported an intention to extend the scope of the compensation to cover consequential loss. The wording suggested a contrary intention. There was no provision for compensation for personal injury or for injury to property other than buildings and their contents; that indicated that it was not correct to interpret the words “sustained loss by such … destruction” in s.2(1) as creating an unqualified causal test to which the normal rules of causation in tort could readily be applied. There was also an unusual provision for compensation to be reduced according to very broad assessments of the conduct of the person seeking compensation. The Act’s provisions supported the conclusion that it, like its predecessors, created a self-contained statutory scheme which did not mirror the common law of tort (see paras 16, 34 of judgment).