Warehouse Torched By Rioters - Owner of Destroyed Stock Wins £5 Million

Civil unrest is thankfully rare in Britain, but it does occur and anyone who suffers loss as a result should contact a solicitor without delay. In a case on point, a company that lost stock worth millions in a blazing warehouse at the height of the August 2011 riots received seven-figure compensation.

The distribution warehouse burned for 10 days after a group of youths broke through a glazed fire door to loot the premises and threw two petrol bombs. The building and all the plant, equipment and stock it contained were completely destroyed. The company, which stored home entertainment media at the warehouse, lost stock with a sales value of about £40 million.

The warehouse owner's insurers paid the company about £8.3 million in respect of the loss of stock. The company, however, launched proceedings against the owner seeking compensation for other losses, including loss of profit on the goods and business interruption costs.

In upholding the company's claim, the High Court found that the owner had, amongst other things, failed in its contractual duty to keep the company's stock in a safe location and to provide its services with due skill and care.

The warehouse had suffered criminal attacks and unauthorised incursions before, yet the fire door remained an obvious weak spot in its security. It offered almost no resistance to the rioters, who gained access to the premises in less than a minute, using only a few garden implements.

There had been no security risk assessment and there was no site-specific security plan. It would have been relatively straightforward and inexpensive for the owner to strengthen the warehouse's security and, at the very least, the fire door should have been more robust and fitted with multi-locking points.

Fire precautions at the warehouse were also inadequate. There was no evidence that an assessment of the risk of arson had been carried out and, had the premises featured a sprinkler system, the fire would probably have been suppressed at an early stage and the damage limited. The owner's liability under the contract was capped at £5 million and the company was awarded that sum, plus interest.