Friday, April 23rd, 2021
Burnett or Grant (Respondent) v International Insurance Company of Hanover Ltd (Appellant) (Scotland) 2021 [UKSC] 12
On 9 August 2013, Craig Grant was killed as a result of an assault on him by Jonas Marcius, a door steward at the Tonik Bar in Aberdeen. Mr Marcius was charged with murder but only convicted of assault. The sentencing judge accepted that Mr Marcius’ actions were badly executed, not badly motived.
A civil action was then raised by the widow and child of Mr Grant and the question arose as to whether the actions of the door steward were covered by the public liability insurance policy (the employer have gone out of business). The policy included an exclusion which provided that “liability arising out of deliberate acts” of an employee was excluded from the policy’s coverage. The Insurer sought to have the claim dismissed on the basis that it was not liable to indemnify under the policy as Mr Marcius’ actions fell within the exclusion of “deliberate acts” in clause 14 of the policy. It was further argued 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.
Mrs Grant’s claim succeeded before the Lord Ordinary and the Insurer’s appeal was dismissed by the Inner House. The appeal to the Supreme Court has now also been dismissed.
On the first issue, it was held that the policy, like any other contract, is to be interpreted objectively by asking what a reasonable person, with all the background knowledge which would reasonably have been available to the parties when they entered into the contract, would have understood the language of the contract to mean. This involves a consideration of the words used in their documentary, factual and commercial context. In the present case the relevant context included that, whether the injury was “accidental” is to be considered from the perspective of the employer rather than the doorman (see Hawley v Luminar Leisure Ltd EWCA Civ 18). It also included the fact that the policy is provided in respect of door stewards or bouncers. There was a clear risk that door stewards will use a degree of force in carrying out their duties. 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. Against that background, the critical issue was what is meant by “deliberate acts”. The Insurer’s case was that it means acts which are intended to cause injury, or acts which are carried out recklessly as to whether they will cause injury. Mrs Grant’s case was that it means acts which are intended to cause the specific injury which results, in this case death or at least serious injury, but that on any view it does not include reckless acts.
The Supreme Court held that “deliberate acts” in clause 14 of the policy means acts which are intended to cause injury, but rejected the contention that the clause extended to recklessness. It is not the act which gives rise to the injury that has to be deliberate, but the act of causing injury itself. The natural meaning of “deliberate” acts is the conscious performance of an act intending its consequences. This involves a different state of mind to recklessness. An exemption of reckless acts would seriously circumscribe the cover provided, as it would lead to a very wide and commercially unlikely exclusion.
On that basis, the clause 14 exclusion did not apply on the facts as found. There was no finding by the courts below of intention to injure, or even recklessness. The conviction for assault did not establish any intention beyond an intention to perform the act of assault, namely the neck hold. The sentencing judge concluded that what was done was “badly executed, not badly motivated,” which was inconsistent with such an intention.
Given the finding that clause 14 did not apply, the second issue did not arise. However, the Supreme Court agreed with the reasoning and conclusion of the Inner House that the losses claimed do not relate to wrongful arrest and so the limitation to £100,000 would not apply.
Robert Milligan QC and James Hastie, Advocate, both of Compass Chambers, appeared for the Pursuer and Respondent. Robin Cleland, also of Compass Chambers, was junior counsel for the Defender and Appellant. A copy of the Judgment can be found here.