Patrick v. Royal London Mutual
The Court of Appeal concluded that the term "wilful act" in an exclusion to an insurance policy meant something more than a deliberate act but less than damage deliberately caused and consciously intended. In the context of this policy, the court equated wilfulness with recklessness but held that the exclusion did not apply to a fire in pallets started by an eleven-year-old boy in circumstances where he was unaware that his fire might burn down the whole adjacent property
DMC Category Rating: Developed
This case note is based on an Article in the May 2006 Edition of the ‘(Re)insurance Bulletin’, published by the Insurance/Reinsurance teams at the international firm of lawyers, DLA Piper Rudnick Gray Cary. DLA Piper is an International Contributor to this website.
On 27 May 1997, Christopher Patrick (aged 11) and a friend started a fire in the derelict part of the property. The boys had built a den out of pallets and, as they were leaving, set fire to it. Their aim was only to burn the den itself. They did not think the fire would lead to the whole property being burnt down.
The policy exclusion
"All persons insured are covered for legal liabilities
arising…in a personal capacity from incidents occurring in the British Isles…during
the currency of the policy resulting in…
Ronson claimed that the fire destroyed their stock. There was some dispute over this, as police attending the scene had found traces of other fires at the property. For the purpose of this hearing, however, the court was only concerned with the insurance coverage issue.
The insurers argued that the exclusion applied. "Wilful" in this context simply meant deliberate and this fire had been started deliberately. But the insured said that, for the exclusion to apply, Christopher Patrick had to have consciously intended to cause the sort of damage that, in fact, occurred.
At first instance, the judge agreed with the insured. Simply construing the word as meaning a deliberate act would deprive the liability extension of much, if not all, of its value to the insured. There had to be some sort of conscious intent. On the evidence, it was not suggested that Christopher Patrick had intended to cause extensive damage to the property so the exclusion did not apply.
In this case, the exclusion applied to incidents involving "any wilful or malicious or criminal acts". This suggested that a wilful act must be something blameworthy and, if so, it had to be more than deliberate. But it did not have to go as far as an intention to cause damage of the kind in question. To fall within the exclusion, it was enough if the insured was reckless as to the consequences of his act. If the insured was aware that he was about to do something that risked causing damage of the kind that gave rise to the claim, or did not care whether there was such a risk or not, he would be acting recklessly if he went ahead and did it.
Equating wilfulness with recklessness in this way focused upon the state of the insured's mind when he carried out the act rather than on its intended consequences. This interpretation fell somewhere between that put forward by insurers and that found by the first instance judge.
It did not, however, affect the result. Having regard to his age and to his statement given in evidence, the Court of Appeal did not think Christopher Patrick had been reckless. His conduct might be described as stupid, but that was not enough. He was unaware of the risk that his fire might burn down the whole property and there was nothing to show that he did not care whether it did so or not. The exclusion did not apply and the appeal was dismissed.
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