Tom Corrigan, partner, Beachcroft LLP

For the first time in English law, the courts have considered the correct test to be applied when an insured, suffering from mental illness, deliberately damages their property and claims for the damage.

The facts in Porter vs Zurich are straightforward. On 27 March 2001, Raymond Porter attempted to kill himself by setting fire to his property. Once the property was ablaze, he changed his mind and escaped. Porter brought a claim against Zurich for an indemnity under his insurance policy for the damage caused by the fire.

It was accepted evidence that, leading up to the fire, Porter had suffered a series of disastrous events in his business and personal life.

Zurich defended the claim on the grounds that Porter started the fire intentionally, relying on a clause in the policy which excluded “any wilful or malicious act by a member of the family or by a person lawfully at or in the home”. They also argued that any recovery would be contrary to public policy and the general law for insurance.

In response, Porter alleged that his mental illness at the time of the fire was such that his “thoughts and judgment were grossly impaired and that he was not acting as a free agent”; that he had not set the fire “deliberately, wilfully or maliciously”.

Zurich was successful on all points. The judge concluded that a claimant seeking to recover for the consequences of his own act in setting a fire would need to prove, on the balance of probabilities, that he was insane within the meaning of the McNaghten Rules at the time of the fire. Porter, therefore, needed to establish both that he did not know the nature and quality of the act he was committing and that he did not know that what he was doing was wrong.

The decision establishes the legal test when an insured makes a claim for damaging their own property while suffering from a mental disability. Any mental condition short of insanity will result in an insured remaining legally responsible for their actions and unable to recover.

Tom Corrigan is a partner in the commercial & property risks group at the commercial law firm Beachcroft LLP