The Metropolitan Police has won its case at the Supreme Court today to limit compensation payments following looting and arson during the 2011 London riots. The ruling will likely save the taxpayer upwards of £80 million.
The Supreme Court considered whether the Metropolitan Police was liable to pay compensation for the 'consequential losses' of property destroyed over and above the cost to replace it, such as loss of profit.
The Supreme Court judgment unanimously reversed an earlier decision of the Court of Appeal which ruled that, under the Riot Damages Act, the Metropolitan Police should compensate affected claimants for both the replacement cost of property destroyed and the 'consequential losses' associated with its destruction.
Chris Owen, head of disputes at UK law firm TLT which represented the Metropolitan Police at the Supreme Court said:
"With many claims for consequential loss dependant on the outcome of this case, today's Supreme Court decision will likely save the UK taxpayer upwards of £80 million.
"The law was unclear in this area and largely written for a different era. The Supreme Court ruling today has clarified that the compensation payable by the Metropolitan Police is limited to the costs of repairing the damage done to property during the 2011 London riots. The legislation is in the process of being updated."
This case involved a dispute between the Mayor's Office for Policing & Crime (the Metropolitan Police) and the Insurers of those affected by the destruction of an Enfield warehouse during the 2011 London riots. The Insurers involved in this case included Mitsui Sumitomo Insurance Co (Europe) Ltd, Tokio Marine Europe Insurance Ltd and Royal & Sun Alliance Insurance plc who had insured Sony and Cresta Estates.
The case centred on the interpretation of the 1886 Riot Damages Act, which stipulates that the police must pay for the costs of any damage to property incurred during a riot. In its ruling, the Supreme Court clarified that the 1886 Act is a self-contained scheme for compensation for damage to property caused during a riot, which does not mirror other areas of law where consequential losses are recoverable.
The insurers claim for consequential loss was initially dismissed by the High Court in 2013 but reversed on appeal by the Court of Appeal in 2014.