Public liability insurers of a security company have been found liable to meet a claim by the widow of a man who died after being assaulted by an employee of the company, acting as a door steward at a bar in Aberdeen.
Five judges in the UK Supreme Court dismissed an appeal by International Insurance Company of Hanover against a decision of the Court of Session, which ruled that the insurers could not rely on an exclusion in the policy for "liability arising out of deliberate acts".
The case arose from the death on 9 August 2013 of Craig Grant, who was assaulted by Jonas Marcius during an altercation after Mr Grant was ejected from the Tonik Bar, Aberdeen. Mr Marcius applied a neck hold to Mr Grant, causing mechanical asphyxia. Mr Marcius stood trial for murder but was convicted only of assault. The sentencing judge accepted that his actions were badly executed, not badly motived, and imposed a non-custodial sentence.
Prospect was insured by the Appellant in this appeal ("the Insurer"), under a policy covering public liability. The policy included an exclusion which provided that "liability arising out of deliberate acts" of an employee was excluded from the policy’s coverage.
Mr Grant's widow brought a claim for damages which was ultimately maintained only against the insurers. The security company, Prospect, was in liquidation, and she claimed the right to be indemnified under the Third Parties (Rights against Insurers) Act 2010. The insurers argued that Mr Marcius’ actions fell within the exclusion of "deliberate acts" in clause 14 of the policy, and further that any liability to indemnify arose under extension 3 of the policy, which provided coverage for public liability for wrongful arrest limited to £100,000. The Lord Ordinary and the Inner House both rejected these arguments.
Lord Reed, Lord Briggs, Lord Hamblen, Lord Leggatt and Lord Burrows unanimously dismissed the insurers' further appeal.
Lord Hamblen, with whom the other judges agreed, said the policy, like any other contract, had to be interpreted objectively by asking what a reasonable person, with all the background knowledge which would reasonably have been available when the parties entered into the contract, would have understood its language to mean.
Here the relevant context included that whether the injury was "accidental" was to be considered from the perspective of the employer rather than the doorman. It also included the fact that the policy was provided in respect of Prospect’s business, which it described as "Manned Guarding and Door Security Contractors".
There was a clear risk that door stewards would use a degree of force in carrying out their duties. As the Court of Session recognised, the required cover for public liability was that which would deal with such incidents at the door of bars. Otherwise, the policy would be stripped of much of its content.
The court accepted the insurer’s argument that "deliberate acts" in clause 14 meant acts intended to cause injury, but rejected the contention that the clause extended to recklessness. It was not the act which gave rise to the injury that had to be deliberate, but the act of causing injury itself. That was the most natural interpretation of the clause, and the terms of the policy did support an interpretation which drew distinctions between an intention to cause different kinds of injury, or serious and less serious injuries. Therefore, the application of the exclusion did not depend on the particular type or extent of injury involved. It was sufficient if the causing of the injury was deliberate.
The natural meaning of "deliberate" acts was the conscious performance of an act intending its consequences. This involved a different state of mind to recklessness. The insurers had not been able to produce any case in which "deliberate" had been held to include recklessness. If, exceptionally, "deliberate" was intended to include recklessness, one would have expected that to be made clear. Such an exemption would seriously circumscribe the cover provided, given the nature of Prospect’s business.
There was no finding by the courts below of intention to injure, or even recklessness, and the conviction for assault did not establish any intention beyond an intention to perform the neck hold. The conclusion that what was done was "badly executed, not badly motivated" was inconsistent with such an intention.
The insurers therefore had no defence to the claim made under the main insuring clause. However the court also agreed with the Court of Session that the losses claimed did not relate to wrongful arrest.