Section 2 of the Riot (Damages) Act 1886 made the police liable to pay compensation to anyone who suffered uninsured loss through injury to or destruction of a house, shop or building, or injury to or theft or destruction of any property, caused by “any persons riotously or tumultuously assembled together”. This spread the risk of riot damage across the local community, as police forces were then funded mainly from local taxes. However, in the course of the 20th century the funding burden shifted progressively to central taxation, so all taxpayers now pay for compensation under the Act. In 2001 the Government launched a review of the Act following compensation of millions of pounds being paid to people who suffered in riots in Bradford, Burnley and Oldham.
In 2002, inmates of a privately run immigration detention centre rioted and a fire caused serious damage. Yarl's Wood Immigration Ltd. (YWIL), which had built and ran the centre under contract with the Government, was insured, and had employed Group 4 Security Ltd. (GSL) to maintain order. Nevertheless, YWIL, GSL and their insurers claimed compensation from the local police under the 1886 Act. This heightened concern about the effect of the Act. During the passage of the Police Reform Bill, the House of Commons Select Committee on Home Affairs recommended repealing the Act; and Lord Bradshaw moved an amendment to repeal the 1886 Act, but withdrew it on the Minister's undertaking to report back to the House of Lords when the Government's review of the Act was complete: HL Deb. vol. 632, cols. 804–805 (12 March 2002). A public consultation began in July 2003: Home Office, Riot (Damages) Act 1886: Consultation on Options for Review (London 2003); but no consensus on the way forward emerged. The Act remains in force, so the courts have to decide whether, and if so how, to adapt the Act to modern methods of providing public services by contract with commercial providers.
In Yarl's Wood Immigration Ltd. v. Bedfordshire Police Authority [2008] EWHC 2207 (Comm), [2009] 1 All E.R. 886, Beatson J. decided that the Act's purpose was to allow property owners to claim compensation from the body responsible for protecting them against riots, not to create a strict liability scheme allowing one public authority with responsibility for maintaining order to obtain compensation from another public authority with “broadly equivalent, but not identical, responsibility for order in that area” (at [159]). YWIL's obligation to maintain order, shared with the police, was regulated by a Protocol agreed between YWIL, the police, and the Government. Before YWIL had formally handed responsibility for dealing with the riot to the police in accordance with the Protocol, YWIL and GSIL were public authorities exercising a public function and responsible for order. His Lordship therefore decided that YWIL and GSL were not “any person” entitled to compensation under section 2.
The Court of Appeal reversed the decision: [2009] EWCA Civ 1110, [2010] 2 W.L.R. 1322. The Act on its face contained no restriction on the kinds of people who could claim under it, and section 7 expressly provided for bodies which would today be regarded as public authorities to secure compensation: Rix L.J. at [63]. The normal approach to statutory interpretation (applying the intention expressed in the statutory words construed in the light of the whole scheme of the Act, unless that gives rise to results so ludicrous that it could not be assumed that Parliament intended such an outcome) produced no manifest anomaly, so YWIL fell within section 2.
But how does one decide whether a possible outcome would be absurd or anomalous? The court considered whether the framers of the Act in 1886 would have regarded the result as absurd, but were also influenced by an obiter dictum of Atkin L.J. in Pitchers v. Surrey County Council [1923] K.B. 57, C.A., to the effect that the Crown might be able to claim compensation under the Act from a police authority for loss suffered through a riot on land occupied by the Crown's armed forces.
However, from the perspective of the modern constitution was it not anomalous for YWIL, operating a detention centre for profit under a commercially negotiated contract with the Government (representing the state), with a contractual responsibility (over and above the common-law duty of all citizens) to uphold order there, to be indemnified by another arm of the state when a foreseeable risk of riot eventuated? It looks even stranger when, under the Protocol, the police could not enter the centre until YWIL formally handed over responsibility to them. In this specific case, insurers will have to indemnify the police authority against any liability to YWIL (see Bedfordshire Police Authority v. Constable [2009] EWCA Civ 69, [2009] 2 All E.R. (Comm.) 200, C.A.) so the litigation was really between two sets of insurers; but in future insurers may be less willing to cover the police against public liability if the 1886 Act carries with it a duty to indemnify against riot damage people who operate volatile, closed institutions such as Yarl's Wood.
The case prompts a further question as to the date at which one should seek the “purpose” of a statute. Should one examine the circumstances surrounding its enactment, or the circumstances of its modern application? Beatson J. adopted a distinctly modern constitutional perspective, taking account of ideas about the nature of public authorities and public functions drawn from contemporary judicial review and Human Rights Act jurisprudence which might not have resonated with legislators in 1886. This raises the possibility of treating the purpose of an Act as independent of the purposes of the people who took part in making it, changing as the conditions to which the Act applies change. The Court of Appeal criticised this, and Beatson J. himself has expressed concern extra-judicially that non-literal interpretation such as that required by section 3 of the Human Rights Act 1998 makes statute law less accessible and intelligible: Sir Jack Beatson, (2006) 27 Statute Law Review 1–14. Nevertheless, separating the source of an Act's legal authority (parliamentary sovereignty) from the Act's current purpose could usefully help courts to assess outcomes for absurdity and anomaly in the light of changing political and social circumstances.
