Compensation for Criminal Damage
34. Compensation from public funds for criminal damage
to property has been available in Northern Ireland for many decades.[31]
The current scheme is established under the Criminal Damage (Compensation)
(Northern Ireland) Order 1977. The scheme provides a right to
claim compensation for loss suffered as a result of malicious
or wanton damage to agricultural property and, in the case of
other property, as a result of damage caused by an unlawful assembly
of three or more persons or by terrorist acts.
35. From around the time of the paramilitary cease-fires
there has been a very welcome drop in the number of major incidents—the
last town centre explosion causing major widespread damage was
the Omagh bomb in August 1998—and a corresponding reduction
in the number of claims under this scheme. The Agency explained
that:
"in the past those claims were largely generated
by large events; we are talking really about explosions where
you would have a considerable number of claims all made in relation
to the same set of circumstances. We are now seeing claims coming
in for criminal damage in relation to one-off events."[32]
The number of claims has now levelled off at between
1,500 and 2,000 per year and we note that more than half of these
claims are disallowed.
36. One of our concerns, in view of the changing
nature of claims and the very welcome absence of major incidents,
was whether the Agency, with its overall reduction in staff numbers,
will be able to retain the capacity and the expertise to cope
should a major incident occur.[33]
We were reassured both by the Agency and by the Minister that
the Agency has the capacity and the expertise to cope with a major
incident, through having a major incident team in place, and contingency
plans to draft in additional staff from other agencies if necessary.
Insurance Cover
37. The decision of the insurance industry in April
1978 that all insurance policies relating to property (other than
private dwellings) in Northern Ireland would exclude cover for
terrorist related incidents, has had a significant impact on the
scheme. The Agency has indicated that overall, approximately £1
billion has been spent throughout the period of the 'Troubles'
with the highest annual spend of £75 million in 1992-93.[34]
The Agency stated that, when asked in 2001, the insurance industry
expressed some interest in returning to this business but that
it was still too uncertain a risk.[35]
The Minister indicated his belief that, in the wake of events
such as the Al-Qaeda attacks on the US on 11 September 2001, the
insurance industry tends to be risk averse and there are no indications
that they might wish to re-enter this market at present.[36]
38. We recognise the difficulties and uncertainties
facing the insurance industry at the present time. However, in
view of the improving security situation in Northern Ireland,
we welcome the assurance from the Minister that, as part of the
planned review of the Criminal Damage Compensation Scheme, the
issue of providing cover for terrorist related incidents will
again be explored with the insurance industry.
31 Ev 16 8.1 Back
32
Q28 Back
33
QQ29, 78 Back
34
Ev 16 para 8.3 Back
35
Ev 16 para 8.2 & Ev 19 para10.5 Back
36
QQ76-77 Back
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