My Lords, first, I thank the noble Lord, Lord Trefgarne, for bringing this Bill before the House today. After being on the statute book for 130 years and in that time rarely used, it is not surprising that the Riot (Damages) Act 1886 is no longer fit for purpose.
The riots in August 2011 were a terrible event which I hope will never happen again. They resulted in five people losing their lives, criminality, theft and violent disorder on an unprecedented scale in recent years, and in London alone the damage was estimated to be half a billion pounds. As we have heard, the language of the Act is not what we expect today, which makes it difficult for people to understand and helps no one, as the noble Lord, Lord Trefgarne, said. There are of course important omissions in the Act; for understandable reasons there is no mention of motor vehicles, no consideration of interim compensation for victims while claims are processed, no consideration of “new for old” replacement of damaged goods, and no powers for the police to delegate the administration of the compensation process.
The present legal framework for compensating victims of riots has simply proved inadequate, so it is right that we carefully consider how the financial burden of any future riot is managed. As we have heard, there is an established principle that the police are liable for damages incurred during riots. The thinking here is of course that there is an implied contract between the public and the police, which again, the noble Lord, Lord Trefgarne, referred to.
In the other place my honourable friends Mr Steve Reed and Mr David Lammy have worked tirelessly on this issue. Both their constituencies were badly affected by the 2011 riots. Mr Reed used the Freedom of Information Act to show that, three years after the riots, 133 victims in London had yet to receive a penny in compensation from the police. Victims are still waiting for £40 million to be paid, which is unacceptable. The Prime Minister of course promised that no one would not be left out of pocket but some of the victims have been waiting far too long already for that promise to be met.
The Government have recognised the problems that people have had in receiving compensation, commissioning the independent review chaired by Neil Kinghan. The Kinghan review was published in September 2013 and made a series of recommendations, including that the principle that the police are strictly liable for damages incurred during riots should be maintained.
It recommended that legislation ought to protect insurers so as not to deter people from taking out insurance policies, or to inflate insurance costs. It recommended that payments to insurance firms should be limited to businesses insured with an annual turnover of less than £2 million, and it suggested that legislation should allow the police to delegate the administering of claims to a body made up of insurance professionals rather than having to do it themselves. A further important recommendation was that allowance be made for compensating at the cost of replacement goods; that is, “old for new”, as is the case in many modern insurance policies. It was judged by the review that the Act should be replaced.
While we support the principle that the police ought to be strictly liable for damages incurred during the course of a riot, it is important that our police forces are not asked to promise a blank cheque. It is impossible for police forces to plan and budget for the possibility of having to compensate victims of riots without some understanding of the likely costs they will have to bear. To deal with this problem, the Kinghan review originally proposed that insurers would be able to claim only for businesses with an annual turnover lower than £2 million. The Bill instead of course places a £1 million cap on the total claim that can be made, and removes any reference to company turnover, which we think is right.
As I said at the start of my remarks, we welcome the Bill, notwithstanding the very valid points made by noble Lords in this debate. The present arrangements for dealing with compensation after riots are clearly inadequate and a new legal framework is required. We must not fail victims of any future riots as, unfortunately, so many victims of the 2011 riots have been let down and are still waiting for proper redress today.
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