Burnett v International Insurance Company of Hanover Ltd (Scotland) [2021] UKSC 12

A door steward employed by a security company applied a fatal neck hold to Mr Grant during an ejection from a bar. His widow claimed against the company's insurer after the company entered liquidation. The Supreme Court held the policy's 'deliberate acts' exclusion required intention to injure, which was not established on the facts.

Facts

On 9 August 2013, Craig Grant was killed following an assault by Jonas Marcius, a door steward employed by Prospect Security Ltd to work at the Tonik Bar in Aberdeen. Mr Grant, who was intoxicated, had been ejected from the premises and became involved in an altercation with door staff. Mr Marcius applied a neck hold to Mr Grant for up to three minutes, causing his death by mechanical asphyxia. Mr Marcius was convicted of assault but acquitted of murder, with the trial judge accepting his actions were ‘badly executed, not badly motivated’.

Mrs Grant, the deceased’s widow, brought proceedings claiming damages under the Damages (Scotland) Act 2011. The security company’s insurer (International Insurance Company of Hanover Ltd) was joined as fourth defender after the company entered liquidation. Mrs Grant relied on the Third Party (Rights against Insurers) Act 2010 to pursue the insurer directly.

Issues

Primary Issue

Whether the insurer could rely on clause 14 of the policy, which excluded ‘liability arising out of deliberate acts’, to avoid indemnifying the security company for its vicarious liability.

Secondary Issue

Whether, if liability existed, it was limited to £100,000 under the ‘Wrongful Arrest’ extension rather than the £5m public liability limit.

Judgment

The Supreme Court unanimously dismissed the insurer’s appeal. Lord Hamblen delivered the leading judgment, with which Lord Reed, Lord Briggs, Lord Leggatt and Lord Burrows agreed.

Interpretation of ‘Deliberate Acts’

The Court accepted the insurer’s argument that ‘deliberate acts’ in clause 14 means acts intended to cause injury, rather than the specific type of injury which results. Lord Hamblen reasoned:

If, as is common ground, it is not the act which gives rise to the injury that has to be deliberate, the most natural interpretation of the clause is that it is the act of causing injury which must be deliberate.

The Court rejected an interpretation requiring intention to cause the specific injury suffered, noting this would lead to ‘unsatisfactory and arbitrary results’ where coverage would depend on ‘the happenstance of whether a targeted injury does or does not result’.

Recklessness

The Court rejected the insurer’s argument that ‘deliberate’ should be interpreted to include recklessness. Lord Hamblen stated:

The starting point is the natural meaning of deliberate acts. This connotes consciously performing an act intending its consequences. It involves a different state of mind to recklessness.

Application to the Facts

Crucially, the Court held that no intention to injure had been established on the facts. The criminal conviction for assault did not establish such intention, and the trial judge’s acceptance that Mr Marcius’s actions were ‘badly executed, not badly motivated’ was inconsistent with an intention to injure.

Implications

This case provides important guidance on the interpretation of ‘deliberate acts’ exclusions in public liability policies, particularly for businesses involving security services. The judgment clarifies that:

• Such exclusions require proof of intention to cause injury, not merely intention to perform the physical act;
• ‘Deliberate’ does not encompass recklessness;
• The burden lies on the insurer to establish the requisite intention;
• A criminal conviction for assault does not, without more, establish intention to injure for insurance purposes.

The decision affirms that public liability insurance for security businesses will generally cover vicarious liability for employees’ tortious acts unless specific intention to injure is proven, preserving meaningful coverage for the risks inherent in such businesses.

Verdict: Appeal dismissed. The insurer was liable to indemnify under the public liability section of the policy. The clause 14 exclusion for ‘deliberate acts’ did not apply as there was no established intention to injure on the facts.

Source: Burnett v International Insurance Company of Hanover Ltd (Scotland) [2021] UKSC 12