The insurance dispute turned on two different intentions. A door steward had meant to restrain a customer, but had he meant to cause injury? The answer determined whether the employer’s insurer could rely on a policy exclusion after the customer died.
Craig Grant died after a door steward used a neck hold to restrain him outside an Aberdeen bar. The steward was employed by Prospect Security Ltd, whose public liability policy covered its door-security business.
The steward was convicted of assault. The conviction established an intentional act of restraint. There was no finding that he had intended to cause injury or death.
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Mr Grant’s widow sought damages. Prospect was in liquidation, so she pursued the employer’s right of indemnity against its insurer under the legislation governing third parties’ rights against insurers.
The policy and the defence
Prospect’s business was manned guarding and door security. Its public liability cover indemnified it against legal liability for compensatory damages arising out of accidental injury, including death, up to £5 million. Clause 14 excluded liability arising out of deliberate acts, wilful default or neglect by an employee, apart from certain extensions that did not assist here. Wrongful arrest was taken out of the main cover and restored by an extension limited to £100,000. Wrongful arrest included unlawful physical restraint and assault and battery committed while making or attempting an arrest.
The insurer said that the neck hold was a deliberate act, so clause 14 excluded indemnity altogether. Alternatively, it said that any indemnity was capped at £100,000 because the incident was a wrongful arrest.
The courts below
The Lord Ordinary held that the exclusion applied only where death, the outcome giving rise to liability, was the intended objective. That intention was neither established nor pleaded. He also held that the wrongful-arrest extension was irrelevant because no such action had been brought. He declared that the insurer was obliged to indemnify Prospect in respect of its liability arising out of the death, and that the right had transferred to Mrs Grant.
The Inner House upheld the declaration in Mrs Grant’s favour. Its judges gave different reasons about the degree or kind of harm the steward would have had to intend. The Supreme Court therefore had to settle what the exclusion required.
The meaning of “deliberate acts”
Lord Hamblen gave the judgment of the Supreme Court; Lord Reed, Lord Briggs, Lord Leggatt and Lord Burrows agreed. The policy was to be interpreted objectively, by asking what a reasonable person, with the background knowledge available to the parties, would have understood its language to mean in its documentary, factual and commercial context. That approach applies to exclusions. A construction against the insurer is relevant only where the words are genuinely ambiguous.
Two points of context were important. Cover for “accidental” injury in this type of policy is assessed from the employer’s perspective, so an employee’s deliberate act may still be accidental so far as the insured is concerned. Door security also carries a clear risk that stewards will use force and that the employer will be liable for their wrongful acts. The insurer accepted that negligent acts causing injury had to be covered, or the policy would be stripped of much of its content. It also accepted that “deliberate acts” could not mean every act a steward meant to perform: many negligent acts are intentional in that sense. Mr Marcius intended to apply the neck hold, but that was not the relevant act.
Lord Hamblen accepted the insurer’s argument that the natural reading is an intention to cause injury, rather than an intention to cause the particular injury that resulted or an intention to cause serious injury. The insured peril is liability for injury, without distinguishing kinds or degrees of injury. Making cover depend on whether a targeted injury happened to result would be arbitrary and would turn on chance. There was no foundation in the wording for requiring an intention to cause serious injury, or for matching the indemnity exactly to the full range of an employer’s responsibility for an employee’s deliberate wrongdoing.
The Court rejected the further argument that “deliberate” included recklessness. Deliberate naturally means consciously performing an act and intending its consequences, a different state of mind from recklessness. “Wilful”, which qualifies default or neglect in the same clause, can have a wider meaning in some settings, particularly where it describes a breach of duty, and has sometimes been treated as including recklessness. That did not make the two adjectives synonymous. No case was shown in which “deliberate” included recklessness, and the policy did not say which of the possible meanings of recklessness would apply. Excluding reckless acts causing injury would also cut down the cover far more than was commercially likely for this business.
The facts as found
Even on that reading, the insurer failed. There was no finding below of an intention to injure, or of recklessness, and it was not for the Supreme Court to find facts. The assault conviction established that the neck hold was a deliberate act of assault, not a wider intention to cause injury. The trial judge’s acceptance that the conduct was badly executed rather than badly motivated was inconsistent with an intention to injure, and also pointed away from recklessness. Clause 14 therefore did not apply.
The insurer consequently had no defence under the main insuring clause. It was unnecessary to decide whether the death fell within the wrongful-arrest extension. Lord Hamblen nevertheless agreed with the Inner House: the losses claimed did not relate to wrongful arrest, and the factual basis for such a claim was not made out.
Verdict: The Supreme Court unanimously dismissed the insurer’s appeal. The employer’s right to indemnity had transferred to Mrs Grant and the deliberate-acts exclusion did not apply. The claim succeeded under the main cover without the £100,000 limit on the separate wrongful-arrest extension.
Source: Burnett or Grant v International Insurance Company of Hanover Ltd [2021] UKSC 12
