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New riot compensation law comes into force this week

New riot compensation law comes into force this week | Insurance Business UK

New riot compensation law comes into force this week
The Riot Compensation Act 2016 takes full effect this week and it is a positive development for insurers, international law firm Clyde & Co has said.
 
Coming into force on Thursday, the law creates a new scheme that allows compensation to be claimed from local police for damaged, destroyed or stolen property during a riot. It enables compensation to be claimed for uninsured or inadequately insured property, and to be reclaimed by an insurer.
 
The incoming measure abolishes the right to consequential damages and introduces a “compensation cap” of £1 million per claim.

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Following on from the Repealing the Riot (Damages) Act 1886, the new law was introduced in response to the London riots of 2011. During the course of processing claims at that time, it became evident that the old legislation was no longer fit for purpose, Clyde & Co noted.
 
Neil Beresford (pictured), partner at the law firm, said the 2016 rules set out a new streamlined claims process, addressing the problems that came to light following the riots in 2011 when claimants faced a confusing and long drawn out claims process.
 
“The Act is good news for insurers. It tidies up the scope of the compensation rules and brings an old and obscure Victorian statute up to date,” said Neil Beresford, partner at Clyde & Co.
 
“It is of primary value for insurers as a clarifying measure although there are some useful additions, such as the extension of the compensation scheme to motor vehicle damage,” he added.
 
Beresford said the language in the riot compensation law has been simplified, with the definition of “riot” now in accordance with the criminal law as set out in the Public Order Act 1986.
 
According to Beresford, the new law also clears up some of the practicalities of the adjustment process.
 
“After the London riots, many of the mainstream loss adjusters became busy or conflicted, and police authorities encountered difficulties in finding enough advisors to validate claims,” he said.
 
 
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