The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)
I thank the right hon. Member for Tottenham (Mr Lammy) for raising this subject. I am mindful that this is the first debate secured specifically on riot damage compensation, and I apologise on behalf of the Minister for Policing and Criminal Justice, who is unable to attend.
The right hon. Gentleman’s constituency, like my own, was one of the areas severely affected by the riots last August, and I sympathise with individuals and businesses in his area and others across the country that experienced losses. He has been extremely proactive in aiding his constituents in the aftermath of the riots and helping those who were adversely affected by the events last August.
The Government have come under considerable criticism, both during the recovery period and this evening, for the length of time that it has taken victims to receive compensation through the Riot (Damages) Act and for the perceived bureaucracy around processing claims, which has been singled out as the problem. Typically, this has been portrayed as a problem caused by the Home Office, with Opposition MPs for the most part helping to promulgate the myth. Most notably, as the right hon. Gentleman mentioned, it was referenced by the Leader of the Opposition in Prime Minister’s questions on 21 March.
It may help to inform the debate if I present a true and current picture of the progress that has been made, but first, in case I run short of time, I want to respond to several of the points raised by the right hon. Gentleman. He asked why the Government did not take up the insurance industry’s offer to process the Act’s claims. As the right hon. Gentleman knows, under the Act, liability for claims rests with police authorities, and passing on the handling of decision making on all claims would have required a change to primary legislation. We did not want to wait for primary legislation, and the simpler option, which took less time to put in place, was to draft in expertise from leading loss adjusters to the Home Office bureau. That did help in resolving and processing the claims.
The right hon. Gentleman asked why loss adjusters insist on continually asking for outstanding documents or evidence. I had a case myself where a constituent came to me about documents that were required for a building that had been burnt down. Documentation is important to ensure that losses are substantiated as far as possible. It is not a new issue for the insurance industry and for loss adjusters who have been employed by the police authorities and the Home Office bureau, and I can confirm that reasonable loss of documentation is taken into account in the reports produced by the loss adjusters. They are aware of the issue. That is not to say that they have not asked for documentation on occasion, but if the reply is that it has been lost or burnt, they make a reasonable adjustment.
On the question of the Prime Minister placing in the Library a document on the processes involved in processing claims, we will check whether it is in there; if it is not, it will be by the end of the week. I would be grateful if the right hon. Gentleman wrote to me with some details on the philanthropic questions that he raised, because this is not a matter that has come to my attention to date. I will be happy to look into that.
Mr Speaker
Order. I am afraid that we cannot have interventions from the Front Bench in a half-hour Adjournment debate.
Lynne Featherstone
There are two types of victim, the uninsured and the insured, although, as I will explain in more detail shortly, some overlap has been created by insurance companies repudiating claims, which can lead to further uninsured claims subsequently being submitted.
For the uninsured cases—those people who never had insurance—most of the claims originally made went to the Home Office bureau, which the Government set up in the wake of the riots in order to facilitate the process for individuals who were struggling to come to terms with the damage caused to their property and loss of possessions. The Home Office bureau received 1,261 cases. As of last week it had 68 cases left—about 5% of the original total. Of those cases, 39 have been classed as inactive. Despite repeated attempts to contact claimants or their representatives, no response has been received for a substantial period. The other 29 cases are largely waiting for documents to be submitted, which the bureau chases up regularly.
The bureau has rejected 837 cases and sent 356 to the police authorities to make decisions on payments. Typically, the reason the claims were rejected is that they were not within the scope of the Act, which covers business interruption losses, personal injury, and vehicle damage, as mentioned by the hon. Member for Nottingham South (Lilian Greenwood). In some cases, the claims were rejected because individuals already had insurance cover.
Given that the number of cases with the bureau is now relatively small, the Policing Minister has agreed that the bureau will shortly cease operations. The small number of remaining cases will be passed to local police authorities, where a more co-ordinated approach will be taken to get them resolved in the local area. The police authorities originally received 480 claims, including the 356 sent to them by the Home Office bureau. I am pleased to announce that only 26 claims are left—that is 26 too many, but nevertheless that is down to 5%. Police authorities have rejected 159 claims and settled 295 cases.
That is not the complete picture of uninsured claims, because a number of cases were subsequently received, predominantly in the Metropolitan Police Service, where insurance companies had repudiated claims or refused to pay out because their assessed value of the claim was below the policy excess; a claim under the Act was then made directly to police authorities. A specific example of that is the case, raised by the Leader for the Opposition at Prime Minister’s questions, in which an uninsured claim was not received in the police authority until December 2011. A further delay then occurred as a result of documents not being sent to the police authority until late March, after which the claim was settled in a matter of days. Unfortunately, that case is not untypical, so the delay is not always on the part of the Home Office, the Home Office bureau or the police authority.
To return to the “new” uninsured claims, I can also report that good progress has been made in resolving those cases. The Metropolitan Police Service received 642 such cases and has 133 left. Around half those cases have been delayed due to documentation that has been requested by police authorities from claimants or their representatives not being submitted. Claims made to other police authorities are negligible. The category in which the greatest amount of payments remains outstanding relates to insurance companies. The Act provides for insurance companies to seek recompense from police authorities for the compensation they pay out to policyholders.
Lynne Featherstone
I am running out of time and really want to get some of these figures on the record for the right hon. Gentleman, so the hon. Gentleman must forgive me.
Police authorities have received 3,883 insured cases, of which 1,063 remain. The police authorities have rejected 1,967 of these cases and 853, worth a total of £4.3 million, have been settled. A number of the outstanding claims, although not many, are of the higher value because they are the more complex claims. Claims for recompense from insurers do not affect the vast majority of individuals and businesses who held insurance at the time of the riots. The most up-to-date information from the Association of British Insurers indicates that more than 95% of individuals have had their claims settled in full or received an interim payment, and 92% of small and medium-sized businesses have either received an interim payment or had their claims settled in full.
Specific reference has been made in the media—I mention this because the right hon. Gentleman did—to the fact that 700 cases in London remain outstanding. Although that headline figure is correct, it is important to provide some context. Of the 707 cases outstanding in the Metropolitan Police Service, 571 are claims from insurance companies for reimbursement of payments that they have made or will make to their customers, not claims outstanding to an individual or company. Those cases do not affect the majority of individuals and businesses who made the original insurance claim, as they will already have received interim or full settlement. Of those 136 claims—707 minus 571—only three of the original claims remain; the others are new.
The Government are committed to reviewing the Riot (Damages) Act. The right hon. Gentleman is right that it is an old Act and we need to ensure that the legislation is fair and reflects a modern policing world. We are considering holding a public consultation, which will provide an opportunity for all interested parties to give their views on the current system and potential options for handling riot claims in future. He makes a powerful case and the Government want to settle all claims and ensure, as many have said, that victims are compensated as soon as humanly possible.