Mitsui Sumitomo Insurance Co (Europe) Ltd and Others v Mayor’s Office for Policing and Crime: CA 20 May 2014

The appellant had suffered damage in a riot, and, under the 1886 Act, the respondent was liable to pay compensation.
Held: The MOPC was liable to pay compensation by way of indemnity. Analysis of section 2(1) suggested compensation for loss ‘sustained . . by such injury, stealing, or destruction’. This was loss that was caused by (i) damage to or destruction of a building, or (ii) damage, destruction or stealing of property in the building. Such loss could as a matter of linguistic analysis include consequential losses, such as the loss of rent while an owner repaired his building. Other provisions in the 1886 Act, including the did not counter this view, and case law precedent on earlier legislation suggested that remedial statutes should be given a liberal interpretation. That case law also suggested a principle that the relevant community, which was then the hundred, stood as sureties for the trespassers. There was no reason to think that a rioter would not have been liable in tort for consequential losses before Parliament legislated in 1714. Thus the local authority incurred such liability under statute. The 1886 Act did not depart from what the Court of Appeal described as ‘the fundamental ‘standing as sureties’ principle’.
The court rejected any reliance on the regulations as an aid to the interpretation of the 1886 Act, and also rejected for lack of evidence a submission on behalf of the MOPC that there was a settled practice of interpreting the 1886 Act as excluding compensation for consequential losses.
The court also considered that there was an anomaly if the 1886 Act did not cover consequential loss. An owner of a commercial building which was damaged in a riot might choose to sell it in a damaged state and claim as his compensation the diminution in value caused by the physical damage. Where a building was valued by reference to its capacity to generate income, part of that diminution in value could be attributable to loss of rent or loss of profits that the purchaser would suffer pending the completion of remedial works. By contrast, if an owner decided to repair the building and suffered a loss of rent or a loss of profits while the remedial works were carried out, he could not recover such losses if the 1886 Act did not extend to consequential losses. There was no rational basis for imputing to Parliament an intention to allow recovery for such losses as part of a claim for diminution of value but to exclude a free-standing claim for losses of the same character. Finally, the court derived no assistance from parallel Scottish legislation, namely section 10 of the Riotous Assemblies (Scotland) Act 1822 (3 Geo IV, c 33) because of its use of different language.

Lord Dyson MR, Moore-Bick, Lewison LJJ
[2014] EWCA Civ 682, [2014] 2 All ER (Comm) 785, [2015] 1 QB 180, [2014] WLR(D) 230, [2014] 3 WLR 576, [2014] Lloyd’s Rep IR 612, [2014] 4 All ER 540
Bailii, WLRD
Riot (Damages) Act 1886 3
England and Wales
At ComCMitsui Sumitomo Insurance Co (Europe) Ltd and Another v The Mayor’s Office for Policing and Crime ComC 12-Sep-2013
In the lead case, Sony’s warehouse at Enfield had been severely damaged in what were said to be riots in August 2011. The court considered preliminary issues as to whether the events constituted a riot within the 1886 Act, and the extent of damages . .
CitedThe Kate 1899
The Kate was totally lost in a collision with the defendants’ ship, whilst on the ballast leg of a charterparty. The issue was whether in a case of total loss as opposed to partial loss of a ship without a cargo, the plaintiffs could recover only . .

Cited by:
At CAThe Mayor’s Office for Policing and Crime v Mitsui Sumitomo Insurance Co (Europe) Ltd and Others SC 20-Apr-2016
The Court considered the quantification of damages to be awarded to a business suffering under riots under the 1886 Act, and in particular whether such recoverable losses included compensation for consequential losses, including loss of profits and . .

Lists of cited by and citing cases may be incomplete.


Updated: 03 December 2021; Ref: scu.525636