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Exclusions of liability: deliberating on "deliberate"

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An exclusion in an insurance policy for “deliberate acts” by employees did not exclude liability for assault in the context of a “Manned Guarding and Door Security Contractors” business: Burnett v International Insurance Company of Hanover.

In trying to eject an intoxicated Craig Grant from a bar, door steward Jonas Marcius applied a neck hold, ultimately leading to Grant’s death by asphyxiation. During criminal proceedings, the jury convicted Marcius only of assaulting Grant. The judge accepted that his actions were “badly executed, not badly motivated”.

Hanover insured Marcius’ employer, Prospect, under a policy that covered public liability. Grant’s widow claimed damages against Hanover, on the basis that Hanover would be liable to indemnify Prospect, which was by then in liquidation.

Crucially, the policy excluded liability arising out of “deliberate acts” by Prospect’s employees. The key issue, then, was whether Grant’s death was caused by a “deliberate act” by Marcius, such that Hanover’s liability to indemnify Grant’s widow was excluded.

The Supreme Court held that, as with any contract, the policy must be interpreted objectively by asking what a reasonable person, with all the background knowledge reasonably available to the parties when they entered into the contract, would have understood its language to mean. The words must be considered in their documentary, factual and commercial context.

In the context of insuring a “Manned Guarding and Door Security Contractors” business, there is a clear risk that door stewards will use a degree of force in performing their duties. Prospect was inherently likely to incur vicarious liability for such tortious acts, so the parties must have intended the policy to cover these incidents.

As for the meaning of “deliberate acts”, the most natural interpretation is that it is the act of causing injury which must be deliberate. The policy did not distinguish between different kinds of injury, nor is it rational to suppose that the parties intended to cover only incidents where the specific injury intended was that which was caused. “Deliberate” in this case must mean an intention to cause injury; recklessness is insufficient. Given the nature of Prospect’s business, an exemption for recklessness would create a wide and commercially unlikely exclusion.

The conviction for assault did not establish an intention to injure, only an intention to perform the act of assault. Indeed, the finding that Marcius’ actions were “not badly motivated” was inconsistent with such an intention. The exclusion clause therefore did not apply. 

N.B. Although this is a Scottish case, the Supreme Court expressly noted that Scottish and English law are the same in relation to the issues raised.


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