The issues raised as a result of the UK riots which took place in 2011 has resulted in the Home Office publishing a draft riot bill to deal with them, however, there are concerns raised by insurers and lawyers that suggest claimants could be left out of pocket.
The Riot Compensation Bill replaces the Riot Act 1886 which is outdated and would offer a more modern way for the public to make a compensation claim for any loss as a result of civil unrest.
Included in the proposals are plans to put a cap on the claim limit for those damages that were caused by the riots at £1 million. The new proposal is a move away from the £2 million turnover cap that was previously proposed.
The Riot Act 1886 is no longer suitable for the 21st Century and the new bill will bring in a system that is flexible and has the ability to meet the requirements of any compensation claims made in the future. The government should support the small and medium sized businesses that form the heart of the community when they experience loss or damaged. The bill will offer a form of protection for businesses but it also protects the public from having to foot the bill for compensation claims.
However, the proposals have raised concerns as the draft bill does not cover the loss of trade for those businesses as well as the loss of rent for landlords along with costs for alternative accommodation following a riot. There is also an issue surrounding the Police and Crime Commissioners as they decided what disturbance can be classed as a riot but the PCCs are responsible for paying the cost of damage which means that there is a potential conflict of interest – an independent decision could get around this.
The new draft riot bill is still the responsibility of the police as they have to provide compensation for any damage caused during a riot, this means that businesses and insurers do not have to cover the cost- which is a proposal made following the riots which would have led to an increase in premiums as well as seeing riots being removed from some insurance cover. The introduction of the compensation cap which puts a limit on the amount claimant can claim for damages could leave businesses and insurers unprotected. The new draft bill removes a proposal that would mean that only those businesses with a turnover of less than £2 million would be able to claim but those who have claims of more than £1 million would not receive compensation over this amount.
It is also clarified in the proposed legislation that those businesses and insurers will receive no compensation from police authorities for any consequential losses and it removes any confusion as to what consequential losses are not recoverable.