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Zurich Claims Journal: Reading the riot act

At a glance

  • Following the widespread riots in the UK in 2011, it was clear from a legislation perspective that reform of the Riot Act was needed
  • Zurich's Paul Redington is a claims handler in our major loss team and worked closely with the ABI to reform the act
  • This article was featured in our newly launched Zurich Quarterly Claims Journal

The Riot Damages Act had been in existence and largely unaltered since 1886, and provided compensation to victims for material losses sustained in a Riot, as designated by local Police authorities. It also allowed Insurers to recover claims payments in a similar manner. The Act was however archaic in nature. This, combined with pressures relating to the Police’s own administration of claims, led to delays, uncertainty and legal challenge, following the widespread Riots of 2011. Reform was needed.

Following the 2011 events the Government commissioned an independent consultant, Neil Kinghan, to conduct a review which included the prevailing legislation. Paul Redington, Senior Claims Adjuster in Property was asked to meet with Mr Kinghan and present Zurich’s views. Paul was also handling our largest claim from the 2011 Riot.

The Kinghan report was published in 2013 and was followed by a public consultation. Zurich were able to provide input with the help of Colin Prince from our Commercial Underwriting team. It was clear that a key driver for the Government was to protect the public purse. They did however wish to continue to compensate individuals and ensure that SMEs were not discouraged from trading in high risk areas. A proposal was therefore presented to allow only businesses with smaller turnovers to recover compensation from the Police.

Paul comments, “It was clear that the turnover cap originally proposed would have prevented many of our customers from claiming compensation for future riots”.

Representation by Zurich helped quash these proposals, and led the Government to look at alternative options as it considered repealing the original legislation and introducing a new Act. The Riot Compensation Act 2016.

New legislation was eventually announced in 2016 and formally introduced on 6 April 2017, together with the accompanying Riot Compensation Regulations 2017 which clarified the operation of the revised statute.

The key aspects of the new legislation are:

  •  The principal of recovering compensation for property losses from the Police following a designated Riot is maintained
  •  Police & Crime Commissioners will be responsible for deciding whether an event constitutes a Riot, and according to a revised definition
  •  The original turnover proposal was dropped in favour of a new £1 million per claim cap
  • Only one claim per postal address is admissible
  •  A claim must be made within 43 days and supporting evidence presented to the Police within 91 days
  •  Consequential losses (such as business interruption) are not recoverable
  •  Replacement property will be compensated on a new for old basis, with the exception of motor vehicles, and stock
  •  There is provision for alternative accommodation for individuals displaced from their homes subject to a 132 day maximum period

Certain aspects of the Act are subject to some interpretation and further clarity, but it is widely acknowledged that new statute is a marked improvement in most areas.

“Fortunately, riots are rare, but as we saw in 2011, they can be incredibly damaging to businesses and communities when they do occur. In the aftermath of those costly events, there was a real risk that the original Act would be swept away and not replaced. The new provisions mark a real step forward in modernising the legislation whilst, crucially retaining the right to compensation from the responsible authorities.”

Riot Claims Bureau/ Compensation Procedures
The new legislation also introduced a provision for the Secretary of State to put in place a Riot Claims Bureau (RCB) to handle riot compensation claims if widespread civil disturbances occur in the future. The CII New Generation Group including further Zurich Claims expertise from our own Gavin Strathern have helped with the production of a compensation handling guide which can be used by a future Bureau, or by the Police themselves in the event of further Riots. In the meantime, Paul has continued to liaise with the ABI, the Home Office, and Police authorities as further consideration is given to compensation handling processes and to help ensure that any future event may lead to swifter compensation to Riot victims.

“The willingness of the Government and the Police to consult with Insurers has been admirable. Ultimately a common driver has been to ensure that future compensation processes are improved for the benefit of all, but most importantly for the victims of Riots, many of whom are and will be Zurich customers”.

This article was published as part of our first Commercial Claims Quarterly Journal. Click here to download the full journal. 

 

Image © Getty

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