UK riot compensation woes linger

2012-08-07 09:06

London - They saw their homes and businesses destroyed in the English riots one year ago - but for many people the nightmare was just beginning as they fought to receive compensation.

Many of the victims of the orgy of looting and vandalism in London and other cities complain of delays in receiving payouts from British authorities and insurers, or of only being offered partial damages.

Siva Kandiah, whose convenience store in the Hackney district of east London was ransacked, said that last month he finally received £45 000 of the £85 000 that had been promised to him via an endowment from London's Metropolitan Police.

"I had to take the money as I was desperate," said Kandiah, aged 40, who has two children aged seven and three.

"The bank has started to put me under pressure - at first they helped me by extending my interest-free overdraft but they've now said that will change."

Kandiah said support from the local community had helped him pull through the bleak early days after the riots, and that business is now almost back to normal.

'A year too late'

"I'm back to 80% of the turnover compared with before the riots," said Kandiah, who has run his business for 12 years.

"The second day after it happened I wanted to give up - but then you see how much people love you and support you. If people hadn't helped me I'd be on the street."

In the deprived north London district of Tottenham, where the riots first broke out after a local man was shot dead by police on 5 August 2011, businesses say they have also suffered from delays in receiving compensation.

"The money's coming through but it's a year too late," said Moaz Nanjuwany, who is the chairperson of the traders Tottenham Traders Partnership and also runs an opticians.

"It should have happened much sooner after the riots so we could have seen footfall back."

Nanjuwany praised local lawmaker David Lammy - a rising star of the opposition Labour party who won praise for his efforts to calm the local community - for pushing the insurers to make their payouts.

95% claims settled

"Lammy put pressure on the insurance companies to stop messing about," Nanjuwany said.

"One or two of them [traders] had some problems until he intervened."

The Association of British Insurers (ABI) said it had settled 95% of the more than 3 000 claims that were made after the riots, and 87% of those made by small businesses in particular.

They said they would receive a total of £200m in compensation.

The insurers' association also blamed what it called an out-of-date law - the 1886 Riot Damages Act under which compensation claims are processed - and the police for the delays in payouts.

It said the "lack of a standard approach" towards claims within the Act "caused unacceptable delays and confusion".

Blame game

"Insurers are asking the government to review the Riot Damages Act to simplify, speed up and improve the claims process to reflect the demands of modern society," the ABI said.

It also said police had not reimbursed them for payouts under the terms of the act.

But the Metropolitan Police blamed the insurers for the delays, saying that they had failed to provide the correct paperwork.

"Some insurers have indicated that they will be unable to provide details of claims and paperwork until 2014," the force said.