Arson: intentional fault reduced to a minimum, April 2018
A reputable analysis laboratory, specialized in fire, has made an interesting study providing statistical data on the fires studied by its laboratory. Of the 4,500 fires analyzed, there was a rate of 52% of arson with significant differences according to the types of activity and buildings. The statistics of this laboratory should reinforce insurers in their extreme caution when it comes to accepting to cover certain risks such as rides, underground car parks, discotheques, tobacco bars etc ... where arson rates above 80% are recorded.
The size of the number of arson attacks today poses difficult questions for insurers.
From a factual point of view, insurers are aware that it is often difficult to prove the voluntary nature of a fire. Fires are characterized by significant destruction. As a result, it is difficult to establish with certainty the cause of the fire. Even if, after important work, it is shown that the fire is intentional, how to prove with certainty the identity of the author of the fire? So many questions, often complex, that judicial expertise operations do not always allow to resolve to the satisfaction of the parties.
On the other hand, while the uncertainty associated with the evidence is perfectly understandable, it is more difficult for insurers to accept to be ordered to bear the consequences of arson when their insured had, admittedly, voluntarily and intentionally set fire but had not intended to cause damage of such magnitude. This situation is, alas, at the origin of many dramatic situations since it is often impossible to control the development of a fire.
By a judgment dated March 8, 2018 (Cass., civ. 2, March 8, 2018, n ° 17-15143), the Court of Cassation reiterated this jurisprudence very unfavorable to insurers. In this case, an insured had deliberately set fire to his drinking establishment. The fire then spread to other businesses and adjoining property. The insurer of the drinking establishment, which had managed to overcome the obstacle of proof by showing that the insured had deliberately used explosive substances to destroy the drinking establishment, requested to be relieved of any guarantee obligation on the basis of wilful misconduct and/or absence of contingency. The Court of Cassation did not follow him. It notes that the insurer had referred to Article L113-1 paragraph 2 of the Insurance Code which provides that "the insurer is not liable for losses and damages resulting from an intentional or fraudulent fault of the insured". It also noted that the "multi-risk business" insurance contract taken out by the insured stipulated that "damage intentionally caused by the member or any insured person, as well as damage caused with their complicity" are excluded, but also that "damage whose event giving rise to it would not be random" is excluded. However, the Court of Cassation concludes that it has not been shown that the insured had, in this case, "had the intention to create the damage as it had occurred".
As a result, while the fire was intentional, the insurer was ordered to guarantee the damage suffered by the neighbouring property because it had not been shown that the insured had also intended the destruction of these properties.
This case law is not new. It had recently been applied in connection with a parking lot fire where a woman set fire to her ex-boyfriend's vehicle (which was voluntary) but apparently did not anticipate that the fire would develop and cause significant damage to the structure of the parking lot. As a result, his insurer was ordered to guarantee the damage suffered by the operator of the car park (Cass., civ. 2ème, 29 June 2017, n ° 16-12154).
Faced with such severe jurisprudence, what is the solution for insurers? Some insurers have included in their insurance contracts an exclusion of coverage clause broadening the concept of wilful misconduct. It would include "damage of any kind caused or caused intentionally by the insured". The damage "caused" by the insured would be the damage voluntarily caused by the latter and the damage "caused" by the insured would be that resulting from the arson but which was not originally desired by the insured which would therefore be the consequence of the uncontrolled spread of the fire.
In a judgment of 12 June 2014, the Court of Cassation ruled on these clauses and considered that they were not formal and limited and could not therefore be invoked against the third party victim (Cass., civ. 2ème, 12 June 2014, n ° 13-18844, Civil liability and insurance n ° 10, October 2014, comm. 321). However, is this case-law on exclusion clauses of general application or does it concern only the clauses thus drafted?
This question cannot yet be decided. It is necessary for insurers to review their insurance contracts and propose new wording of exclusion clauses relating to damage resulting from the spread of an arson but not controlled. We will then know whether or not the Court of Cassation wishes to make impossible any possibility for an insurer to exclude from its guarantee the damage resulting from the spread of an intentional but uncontrolled fire.