Widow wins appeal for insurance payout over death of husband following assault by bouncer

The Inner House of the Court of Session upheld a decision of the Lord Ordinary that an insurance company, which was seeking to avoid paying out on the basis that its liability was excluded by criminal acts, is obliged to indemnify the security firm after Fiona Grant raised an action following the death of her late husband Craig Grant.

Murder trial

The Lord President, Lord Carloway, sitting with Lord Brodie and Lord Drummond Young, heard that Mr Grant died after being ejected from the Tonik Bar in Aberdeen on 9 August 2013 and restrained by a bouncer until the police arrived. He died at the scene and a post mortem examination certified the cause of death as “mechanical asphyxia”. 

The first defender Jonas Marcius was subsequently charged with the murder but, following a trial at Aberdeen High Court he was convicted of assaulting the deceased by seizing him on the neck, forcing him to the ground, placing him in a neck or choke hold and restricting his breathing; and in January 2015 he was sentenced to a community payback order.

The pursuer raised an action for damages claiming that the death of her husband was caused by the “fault and negligence” of the first defender at common law, for which his then employers Prospect Security Ltd (second defenders) and bar owners Blu Inns Ltd (third defenders) were both “vicariously liable”, and against international Insurance Company of Hanover Ltd (fourth defenders) - which provided public liability insurance to the security firm - in terms of the Third Party (Rights against Insurers) Act 2010.

The action against the first and third defenders was abandoned, while the second defenders, who were now in liquidation, did not enter an appearance. But the fourth defenders, which stepped into the shoes of the second defenders, argued that they were not obliged to indemnify the company. 

The principal submission for the fourth defenders was that their liability to indemnify was “wholly excluded” by clause 14 of the public and employer’s liability insurance policy, which stated that the insurers were not liable for “deliberate acts wilful neglect or default”.

‘Contra proferentem’

But the judge, Lord Uist, ruled that the fourth defenders were obliged to indemnify the second defenders in respect of their liability to the pursuer arising out of the death of the deceased, and that the second defenders’ right to indemnity had been transferred to and vested in the pursuer under sections 1 and 3 of the 2010 Act.

Applying the “contra proferentem” rule, and adopting the approach in Hawley v Luminar Leisure [2006] PIQR P17, the Lord Ordinary held that exclusion clause only applied when the outcome giving rise to liability, ie the death, was the intended objective - in this case, death had been an unintended consequence of the assault.

Appealing against that decision, it was argued that, on the proper interpretation of “deliberate acts wilful default or neglect”, the acts of the doorman had to be construed from the perspective of the insured employer, to whom the employee’s state of mind could not be attributed. 

In the present case, there was a deliberate “blameworthy act” which caused the death, and there was no liability for such an act unless it amounted to “wrongful arrest” in terms of the extension of the policy.

Alternatively, if the act was not to be classified as deliberate, it was was within the wrongful arrest extension as the first defender had been restraining the deceased pending the arrival of the police, meaning the clause limiting liability to £100,000 applied.

However, on behalf of the pursuer it was submitted that the words in the policy ought to be construed according to their ordinary meaning.

The claim was not for damages arising out of a wrongful arrest, but for “negligently caused death” as a result of the assault on deceased by the first defender, who was at the material time acting “in the course of his employment” with the second defenders, who were insured by the fourth defenders. 

‘Deliberate act’

Refusing the appeal, the judges held that the policy excluded acts which deliberately caused particular losses otherwise covered by the policy. 

In a written opinion with which the other judges agreed, the Lord President said: “The principal question is whether, as a matter of the proper construction of the insurance contract, the death of the deceased, which (despite the jury’s verdict) was admittedly a result of the first defender’s assault upon him, was caused by the ‘deliberate acts wilful default or neglect’ of the first defender. 

“One important element of the context in this case is simply that this is an insurance contract. Its focus is on the loss claimed and whether it is covered by the policy. The loss is the death of the deceased. 

“The other important contextual element is that the policy was undoubtedly intended to cover the acts and omissions of the door stewards who were employed by the second defenders.

“Although some purely accidental incidents might occur as a result of carelessness, the public liability cover which would obviously be required was that which would deal with incidents at the doors of bars. These would commonly involve acts preventing persons entering, or removing them from, the premises; all of which would be almost bound to involve deliberate physical acts of one kind or another. 

“The general cover offered in the policy is ‘accidental injury’. That is contrasted with the excluded ‘deliberate acts wilful default or neglect’.” 

What was being excluded in the present case was “an act deliberately causing particular losses otherwise covered by the policy”. 

“Approached at in this way,” he continued, “the phrase ‘deliberate acts’ in the policy is intended to cover acts which involve the insured, or his employees, doing something with the deliberate intention of bringing about a particular objective, notably the creation of liabilities for losses covered by the policy. 

“Seen in this light, the exclusionary phrase does not cover a deliberate act of an employee, intended as one of restraint, which accidentally causes injury or death to the person restrained. For the exclusion to operate, the employee must have deliberately intended to cause the death of, or at least serious injury to, the deceased. That is not the situation in this case.”

He added that the wrongful arrest exclusion and extension clauses did not apply to the present circumstances. 

Lord Carloway explained: “Wrongful arrest, or detention, is a claim for damages to compensate for an interference with, and loss of, a person’s liberty and any consequent affront to the person’s dignity. The losses claimed are not of this type. There is no basis upon which a claim for wrongful arrest might have been made. In all these circumstances, the reclaiming motion should be refused and the court should adhere to the interlocutor of the Lord Ordinary dated 5 April 2018.”