![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales High Court (Commercial Court) Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just Β£5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Bedfordshire Police Authority v Constable & Ors [2008] EWHC 1375 (Comm) (20 June 2008) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2008/1375.html Cite as: [2009] Lloyd's Rep IR 39, [2008] EWHC 1375 (Comm) |
[New search] [View without highlighting] [Printable RTF version] [Help]
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
||
B e f o r e :
____________________
BEDFORDSHIRE POLICE AUTHORITY |
Claimant |
|
- and - |
||
David CONSTABLE (sued on his own behalf and on behalf of all other members of Syndicate 386 at Lloyd's) |
Defendant |
____________________
Mr Gavin Kealey QC and Mr Andrew Wales (instructed by) for the defendant
Hearing dates: 28, 29, 30 April 2008
____________________
Crown Copyright ©
Introduction
The facts
The issues
The COMPANY will indemnify the ASSURED in respect of all sums which the ASSURED may become legally liable to pay as damages for (b) accidental DAMAGE to PROPERTY occurring within the Geographical Limits during the Period of Insurance arising out of the BUSINESS.
[Words in block capitals were defined in the General Definitions section of the Underlying Policy; for convenience they appear later in this judgment with only the initial letter in capitals.]
The 1886 Act and its predecessors
the inhabitants of the hundred in which such damage shall be done, shall be liable to yield damages to the person or persons injured and damnified by such demolishing or pulling down wholly or in part; and such damages shall and may be recovered by action to be brought in any of his Majesty's courts of record at Westminster
the Inhabitants of the Hundred, Wapentake, Ward, or other District in the nature of a Hundred, by whatever name it be denominated, shall be liable to yield full Compensation to the Person or Persons damnified by the Offence
shall make an Order for Payment of the Amount of such Damage
Whereas by law the inhabitants of the hundred or other area in which property is damaged by persons riotously and tumultuously assembled together are liable in certain cases to pay compensation for such damage, and it is expedient to make other provision respecting such compensation and the mode of recovering the same:
2. - (1.) Where a house, shop, or building in any police district has been injured or destroyed, or the property therein has been injured, stolen, or destroyed, by any persons riotously and tumultuously assembled together, such compensation as herein-after mentioned shall be paid out of the police rate of such district to any person who has sustained loss by such injury, stealing or destruction; but in fixing the amount of such compensation regard shall be had to the conduct of the said person, whether as respects the precautions taken by him or as respects his being a party or accessory to such riotous or tumultuous assembly, or as regards any provocation offered to the persons assembled or otherwise.
(2.) Where any person having sustained such loss as aforesaid has received, by way of insurance or otherwise, any sum to recoup him, in whole or in part, for such loss, the compensation otherwise payable to him under this Act shall, if exceeding such sum, be reduced by the amount thereof, and in any other case shall not be paid to him, and the payer of such sum shall be entitled to compensation under this Act in respect of the sum so paid in like manner as if he had sustained the said loss, and any policy of insurance given by such payer shall continue in force as if he had made no such payment, and where such person was recouped as aforesaid otherwise than by payment of a sum, this enactment shall apply as if the value of such recoupment were a sum paid.
3. (1.) Claims for compensation under this Act shall be made to the police authority of the district in which the injury, stealing, or destruction took place, and such police authority shall inquire into the truth thereof, and shall, if satisfied, fix such compensation as appears to them just.
(2.) A Secretary of State may from time to time make, and when made, revoke and vary regulations respecting the time, manner, and conditions within, in, and under which claims for compensation under this Act are to be made, and all claims not made in accordance with such regulations may be excluded. Such regulations may also provide for the particulars to be stated in any claim, and for the verification of any claim, and of any facts incidental thereto, by statutory declarations, production of books, vouchers, and documents, entry of premises, and otherwise, and may also provide for any matter which under this Act can be prescribed, and for the police authority obtaining information and assistance for determining the said claims.
(3.) The said regulations shall be published in the London Gazette, and every police authority shall cause the same to be published in their police district, and copies thereof to be at all times sold to any applicant at a price not exceeding sixpence for each copy.
4. (1.) Where a claim to compensation has been made in accordance with the regulations, and the claimant is aggrieved by the refusal or failure of the police authority to fix compensation upon such claim, or by the amount of compensation fixed, he may bring an action against the police authority to recover compensation in respect of all or any of the matters mentioned in such claim and to an amount not exceeding that mentioned therein, but if in such action he fails to recover any compensation or an amount exceeding that fixed by the police authority, he shall pay the costs of the police authority as between solicitor and client.
(2.) If the amount of compensation for which such action is brought does not exceed one hundred pounds, the action shall be brought in the county court for any district in which any part of the police district is situate.
deemed to be the persons who have sustained loss from such injury, stealing, or destruction, and claims may be made by any one or more of such persons in relation both to the building and to the property therein, and payment to any such claimant shall discharge the liability of the police authority to pay compensation, but shall be without prejudice to the right of any person to recover the compensation from such payee.
The expression "police district" means one of the districts set forth in the first column of First Schedule to this Act; and the expressions "police authority" and "police rate" mean, as respects each police district, the authority and rate respectively mentioned opposite to that district in the second and third columns of that Schedule, and the expressions defined in that Schedule shall have the meanings thereby assigned to them:
Determining meaning: the task and the evidence
the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
The parties' approaches to construction
9. The proper approach is to analyse the meaning of the policy, specifically the relevant coverage provision, and, having gained an understanding of its meaning, then to ascertain whether the particular putative liability on the part of the assured falls within its scope.
10. When construing the relevant coverage provision, it is wise not to fracture the sentences or phrases too much. The words and phrases in the sentences take their colour not only from (i) the established legal background of meaning against which they came to be agreed and the commercial background associated with public liability policies , but also from (ii) their immediate context and the inter-relationship between them. One should endeavour to construe the provision as a whole, while also taking into account the established meaning of words and the commercial background.
An "established legal background of meaning"
It is also necessary that the court should have regard to previous decisions of the courts upon the same or similar wording. Parties to a commercial contract are to be taken to have contracted against a background which includes the previous decisions upon the construction of similar contracts.
essentially a principle of construction. Thus the court is trying to ascertain the intention of the parties in using the expression deployed in the contract. Where a contract has been professionally drawn, as in the case of the Institute Clauses, the draftsman is certain to have in mind decisions of the courts on earlier editions of the clause. Such decisions are part of the context or background circumstances against which the particular contract falls to be construed. If the draftsman chooses to adopt the same words as previously construed by the courts, it seems to me to be likely that, other things being equal, he intends that the words should continue to have the same meaning.
The word 'damages' is one which to an English lawyer conveys a sufficiently precise meaning. .. it is necessary in my opinion, in construing a document of this kind, to give to the word 'damages' its ordinary meaning in English law. 'Damages' to an English lawyer, imports this idea, that the sums payable by way of damages are sums which fall to be paid by reason of some breach of duty or obligation, whether that duty or obligation is imposed by contract, by the general law, or by legislation.
The usual meaning of the word 'damages' is as stated in Halsbury's Laws of England, 2nd Ed vol 10 p 82, where it is said: 'Damages may be defined as the pecuniary compensation which the law awards to a person for the injury he has sustained by reason of the act or default of another, whether such act or default is a breach of contract or tort; or, put more shortly, damages are the recompense given by the process of law to a person for the wrong that another has done him.'
Commercial background of public liability policies
is quintessentially insurance against liability typically tortious liability - to pay damages to members of the public for actionable wrongs committed by the assured
A public liability policy provides cover against liability to the public at large. By contrast private liability arises from contracts entered into between individuals. Public liability in this sense arises in tort; it does not and cannot arise only in contract. As a general rule a claim in tort cannot be founded upon pure economic loss. So the judge was right to say that the fact that this was public liability insurance was important and that such policies do not generally cover liability in contract for pure economic loss. It is a strong pointer to the meaning of the words used.
Context and inter-relationship of words and phrases
I think that in some cases the notion of words having a natural meaning is not a very helpful one. Because the meaning of words is so sensitive to syntax and context, the natural meaning of words in one sentence may be quite unnatural in another. Thus a statement that words have a particular natural meaning may mean no more than that in many contexts they will have that meaning. In other contexts their meaning will be different but no less natural.
The general principle is that the proper construction is to be determined by the ordinary and natural meaning of the words used in the contractual and commercial setting in which the words appear. The niceties of language may have to give way to a commercial construction which is more likely to give effect to the intention of the parties.
Argument on Issue 1: "liable to pay as damages"
Although I accept Mr. Glasgow's submission that the natural and ordinary meaning of "compensation" in the context of a legal liability to pay damages is one which excludes any element of exemplary damages, I cannot accept that this meaning is wholly clear and unambiguous. On the contrary it involves very much a literal, lawyer's understanding of the term and is one which would not command universal acceptance. Many, including no doubt most recipients, would regard compensation to mean instead all damages (of whatever character and however calculated) payable to the victim of a tort.
The first question was whether the phrase "all sums which the insured shall become legally liable to pay as compensation" applied on its true construction to cases where exemplary or punitive damages were awarded. The Court of Appeal held that it did, since all damages in tort, whether compensatory or punitive, go to the plaintiff by way of compensation. The primary consideration was that the policy expressly included cover for torts, which by their nature, attracted claims for exemplary damages and that, if insurers were correct, cover would be excluded for all claims where exemplary damages were sought, even though the claim for such damages might be roundly rejected. A secondary consideration was the difficulty of handling claims if insurers' construction were correct, because it would be difficult, if not impossible, to separate out the punitive element as opposed to the ordinary compensatory element even after award, let alone before award, when the insured would want insurers to take over their defence.
It is of course true that the policy with which I am concerned does not expressly cover torts which, by their nature, attract awards for exemplary or punitive damages. Nevertheless, both the above considerations have some bearing on the present case. I cannot differentiate sensibly between the phrases "compensation" and "compensatory damages". "Compensatory damages" is equally a phrase which cannot be accepted as being "wholly clear and unambiguous"
In these circumstances it seems to me that the phrase "compensatory damage" must be given a broad meaning, viz that the damages, if they are to be recoverable, must be claimed by or on behalf of a person in respect of loss which that person has suffered, rather than a sum claimed by an entity, such as the State, (or perhaps the court, to use the wording of Article 180 itself), which has suffered no personal loss.
A resounding definition of the term damages would make for a fitting opening of a work on the law of damages and in their first sentence earlier editions have done just this. But it has become more and more difficult, as time has moved on to construct, a definition of damages which is satisfactory and which is comprehensive. So many exceptions to and qualifications upon, once solid, clear, unadulterated rules have appeared, perfectly sensibly, that a clear-cut definition is no longer feasible; the, arrival of restitutionary damages and of human rights was the last straw. The impossible search for a clear-cut, comprehensive definition is therefore abandoned. Instead, the definition from earlier editions, a definition which still represents the norm, is taken but it is qualified to indicate that it applies generally but not invariably, thus:
Damages in the vast majority of cases are the pecuniary compensation, obtainable by success in an action, for a wrong which is either a tort or a breach of contract, the compensation being in the form of a lump sum awarded at one time, unconditionally and in sterling.
I now turn to consider both the meaning of the words and the question as to whether the words "riotously and tumultuously" from their history are to be read as cumulative requirements, differing in character. Until very recently the victims of crime had, in general, no claim to be compensated for the injury they suffered as a consequence of the crime. Compensation for loss caused by a riot was a special case. This raises the question: Why was it made a special case? If a crowd of people collect in angry and threatening fashion this should become obvious to the local forces of order, and it would then become their duty to prevent the crowd from becoming a riot. This is a duty which has been recognised for centuries, and which until the 19th century was put upon the local administrative area, the hundred or wapentake, or whatever name it might be called; and there was a duty upon them to compensate for damage which was done by persons assembled riotously and tumultuously. The Act of 1886, in fact, did no more than modernise the mode of obtaining compensation and transferred the burden from the inhabitants of the hundred or wapentake to the local police authority. There is nothing secret or furtive about a crowd of people who are acting riotously and tumultuously. It seems to me that the right to compensation from public funds was given because public authority had failed to protect the public who were menaced by a threat which was, or ought to have been, obvious to the forces of law and order as they existed from time to time. In my judgment, the word "tumultuously" was added to "riotously" for the specific reason that it was intended to limit the liability of compensation to cases where the rioters were in such numbers and in such state of agitated commotion, and were generally so acting, that the forces of law and order should have been well aware of the threat which existed, and, if they had done their duty, should have taken steps to prevent the rioters from causing damage.
Moreover, these aspects were considered with great care, and after a full citation of all the authorities, by Mr Justice Lyell in the most recent of the cases to which we were referred, JW Dwyer Limited v- Metropolitan Police District Receiver [1967] 2 QB 970, [1967] 3 WLR 731. Mr Justice Kenneth Jones followed that case and I would do exactly the same, because it is an admirable judgment on this very section
I would accept the analysis of the phrase "riotously and tumultuously" assembled together" of Mr Justice Lyell in Dwyer's case. Looked at in that way, there is no error in concluding that "tumultuously adds something more than mere noise to the minimum assembly of three people required to constitute a riot.
The other point which Mr Poulton took was that Mr Justice Lyell's suggestion that what matters is whether or not the police should have been alerted was satisfied in the present case, since there was a great deal of noise. He said that this should have attracted the attention of the police. I do not accept that. It is certainly not the kind of picture which Mr Justice Lyell had in mind when he gave his impression of a "riotous and tumultuous assembly". After all, this was not a case of a crowd which had assembled and which should have attracted the attention of the police by its very presence. On the contrary. These robbers drew up in a van quietly and then stormed out, no doubt making a good deal of noise, but in the minimum time possible. And they then vanished as quickly as they could. The whole nature of the raid was one of furtiveness at the beginning, and then surprise and speed of departure thereafter. In my view that is far from a "riotous and tumultuous assembly".
I would also like to express my complete agreement with the judgment of Mr Justice Lyell in Dwyer's case.
an action to recover compensation under the statute; it was not brought to recover damages for any default on the part of the police authority; it was simply an action to recover such an amount as the county court judge might think right to allow as compensation for the damage done to the plaintiffs' property".
In this case the plaintiffs claim damages against the Receiver for the Metropolitan Police District for part of the damage suffered when their premises were the scene of a robbery, The claim is brought under section 2 of the Riot (Damages) Act, 1886. [page 974, italics added] The plaintiffs claim that they are entitled to recover such part of their loss as was not covered by insurance, as compensation due to them under section 2 of the Riot (Damages) Act, 1886. [page 976, italics added]
(a) "There must be judgment for the plaintiff, and the question of the quantum of damages must be referred": Ford v Receiver for the Metropolitan Police District [1921] 2 KB 344 per Bailhache J at 351;
(b) "The fact that the damage has been done in spite of the care and protection of the police or because of the negligence of the police does not affect the right of the claimant to have compensation. It is a right which is given to the individual who is hurt by a riot to have his damages shared by the whole of the community, and the community for the purpose of this sharing is the police district within which the building injured or destroyed is situated.": Pitchers v. Surrey County Council [1923] 2 KB 57 per Swift J at 65;
(c) "It has been agreed between the parties, subject to the legal points, that a further sum of 1250l. should be fixed as damages": Jarvis v. Surrey County Council [1925] 1 KB 554 per Finlay J at 558;
(d) "The second plaintiffs had paid some £5,000 for that theft; and for their respective losses these plaintiffs sought to recover damages under the Riot (Damages) Act, 1886": Bearmans Ltd v Metropolitan Police District Receiver [1961] 1 All ER 384 per Sellers LJ at 386.
108 The core meaning of the term "damages" in English law is perhaps most conveniently summed up in Halsbury's Laws of England, 4th edition, 1998, Vol.12(1) para. 802 :
"'Damages' are the pecuniary recompense given by process of law to a person for the actionable wrong that another has done him."
109 Furthermore, at least in the field of marine insurance, it seems to me to be quite clear that this is the meaning which will normally be attributed to the word. Indeed, in that particular context, an even narrower construction has been adopted, even in the absence of an express term to that effect, since it will normally exclude any damages payable by the insured pursuant to contract.
110 I can see no obvious reason why a different approach should be adopted in relation to other forms of public liability insurance. The essential purpose of such policies is to provide an indemnity in respect of certain types of tortious liability. That is reflected in the choice of the word "damages" in the insuring clause of the Policy in this case.
Actions claiming money under statutes, where the claim is made independently of a wrong which is a tort or breach of contract, are not actions for damages.
Then what is compensation? The expression "compensation" is not ordinarily used as an equivalent for "damages." It is used in such Acts as these in relation to a lawful act which has caused injury."
But it is said that the police had no control over the soldiers and that they were helpless to do anything. I do not think that that contention is right. I think that the police had the right of control directly a felony was committed in their presence. Of course they had not the power of exercising control. I have stated what opinion I have formed of the three police officers who gave evidence before me. I have not the slightest doubt that they had sufficient courage to try to stop the disturbance; they would, however, have been foolish men had they attempted to do so, as it could not possibly have done any good and they might have been very seriously hurt if not actually killed in endeavouring to quell the disturbance, but the fact that it may not be physically possible for the police to quell a disturbance does not affect the question of their legal rights. I am far from being satisfied that if the police in the neighbourhood of a military camp see the soldiers breaking it up they have not a legal right to apprehend them for the breach of the peace or for the felony which they are committing.
The right to compensation does not seem to me to be in the least degree dependent upon any action or inaction on the part of the police. It is quite clear that it would have been physically impossible for all the police in Surrey, who I think numbered 280 at this time, to have taken control of that camp without the assistance and support of the military authorities. It would have been a physical impossibility for them to have reduced some hundreds of rioters, many of whom I suppose were armed or had access to arms, to such a state that they could say that the riot was quelled. But no one here suggests any neglect or impropriety on the part of the police. Every one who has heard this case I should think has come to the conclusion that they acted with great discretion and great propriety in the matter. But the Act of Parliament does not give a citizen a right to compensation for damage by riot on any principle of blaming the police over the matter. The fact that the damage has been done in spite of the care and protection of the police or because of the negligence of the police does not affect the right of the claimant to have compensation. It is a right which is given to the individual who is hurt by a riot to have his damages shared by the whole of the community, and the community for the purpose of this sharing is the police district within which the building injured or destroyed is situated. The plaintiff is entitled to have the wrong which was done to her shared by all the contributors to the police fund in the police district of Surrey.
Extent of cover: "arising out of the Business"
Analysis of issues 1 and 2
(i) So far as the police authority and the police force are concerned, causation is irrelevant. Liability exists irrespective of any conduct or knowledge on the part of either body; and (iv) Foreseeability of harm is irrelevant. These are features of strict liability torts, and are thus not inconsistent with or dissimilar from tortious liability.
(ii) Only certain types of loss and damage qualify for compensation. In particular there is no compensation of personal injury, or personal property except of the type expressly referred to in the statute: see sections 2(1) and 6(b); and (iii) No provision is made for any forms of loss consequential upon property damage (let alone personal injury, loss of earnings etc.). The protection of only certain types of property interest is a feature of some torts, for example conversion, and this is accordingly not inconsistent with or dissimilar from tortious liability.
(v) The period within which compensation must be claimed is 14 clear days, extendable for special cause shown to 42 days; and (vi) All claims must be made in a specified form; and (vii) No costs may be recovered by the claimant. These are all procedural matters which do not affect the substantive nature of the claim.
Conclusion