Court orders insurer to pay Bt1.977 bn for Zen arson

The Civil Court yesterday ruled that Deves Insurance must pay Central Department Store Ltd and/or the Bureau of the Royal Household a total of Bt1.977 billion in compensation, which included a penalty for refusing to accept responsibility and for its failure to respect consumer rights.

Separately, Muang Thai Insurance has been ordered by the Civil Court, in a separate trial, to pay Chulalongkorn University Bt1.78 million for two CU-owned shophouses that were damaged by fire during the riots, as well as 7.5 per cent of interest starting from December 2010, as it had failed to meet the deadline, until the completion of payment.

Chief Justice Thawee Prachuablarp, head of the Criminal Court, said the facts heard or testified to during civil lawsuits did not affect trials involving the 24 red-shirt leaders and members of the Democratic Alliance Against Dictatorship (DAAD) who have been indicted for terrorism.

The Deves Insurance vs Zen suit is a civil matter. The red-shirt leaders were individual defendants in terrorism-related trials. The evidence against them were a different set of facts, which had been compiled throughout the period of the red-shirt protests starting in early April that year, and not just on May 19 when there was widespread arson in the city, he added.

Central Department Store, which operates Zen Department Store, had filed a lawsuit demanding Bt1.712 billion in compensation under the insurance policy and the terrorism insurance policy that it had bought from Deves Insurance. The company also demanded a penalty as the amount was not more than twice the true cost of damage.

Deves Insurance fought the legal battle on the ground that the damage to Zen was a result of a political unrest provoked by the red shirts, which is exempted by the terrorism insurance policy because the arson attack case had not yet been resolved. The defendant said it had not yet paid compensation to the plaintiff because the plaintiff had not received any compensation under its all-risk insurance policy. The defendant also claimed that the plaintiff demanded an amount of compensation in excess of the actual damage.

The court ruled that the arson attack on Zen happened after the red-shirt leaders announced on the rally stage their decision to end the rally. The attack caused commotion and upheaval and went out of control, fitting the definition of a riot, hence the defendant must pay a compensation of Bt1.647 billion, the court ruled.

The court also said the plaintiff had paid insurance premiums of more than Bt10 million per year to the defendant. Since the defendant had intentionally neglected to respect consumer rights and refused to accept its responsibilities by not paying the compensation, it ruled that Deves Insurance must pay a penalty totalling Bt329 million, which is one-fifth the damage incurred, in accordance with the Consumer Case Procedures Act 2008. The court also ruled that Deves Insurance pay total compensation at an interest of 7.5 per cent per annum from May 17, 2011, and also reimburse legal expenses of Bt60,000 to the group.

Deves Insurance is entitled to appeal the judgement within 30 days. In its statement, Deves said it could not comment immediately on the verdict because details were not available. Deves had not ignored its responsibilities towards its clients and the compensation awarded by the court will not affect its financial stability, the statement added.

Central Pattana assistant finance manager Narit Choeyklin thanked the court and said the company is paying insurance premiums three times higher since the riots. On March 1, the Civil Court ruled that Deves Insurance must pay Bt2.7 billion in compensation and Bt989 million for loss of income to Thai Business Fund 4, Central Pattana, CentralWorld Co Ltd and Central Department Store Co Ltd for the arson attack on CentralWorld during the political unrest in 2010.