06 07 2023 Insights Insurance

Amendment to Occupiers Liability on the Horizon: Benefits to Occupiers and Insurers alike

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The Courts and Civil Law (Misc. Provisions) Bill 2023 having passed through both houses of the Oireachtas was sent to the President on 3 July 2023 to be signed into Law.

The Bill is extensive and seeks to reform a number of areas to include insurance, court processes and legal services. Whilst the key focus of the Bill is to amend the terms of the Occupiers Liability Act 1995 (which has the express intention of seeking to reduce insurance costs associated with certain activities) it also amends the Civil Liability Act 1961 (in particular Sections 51H through to L) introducing a new ‘period payment index’ for damages awarded by way of periodic payments.

Civil Liability Act, 1961 Amendments:

As insurers will be aware Section 51 of the 1961 Act deals with the award of damages by way of periodic payments made by the Court.

The key amendment to these sections relates to the substitution of “periodic payments index” for “the harmonized index of consumer prices as published by the Central Statistics Office (CPI)”. In addition, the Bill provides that the Minister may specify another index should it be more appropriate (Section 51L). There has been debate recently in respect of rates of return to be applied on periodic payments with a suggestion that the Irish Legislature might look toward the UK. The Bill seeks to address same and provides that the Minister may make provision for the following matters in its specific index to include specification in different indices for different goods and services in respect of which (a) Period Payment Order may be made, (b) a fixed percentage increase for the purpose of providing amount of periodic Payments Order (which reflects inflation and this is to include wage inflation within the State going beyond CPI) and (c) incidental and supplemental as well as consequential provisions which appear to the Minister which may necessary expedient so catch all at the end of same.

The Minister has a broad range of considerations to take into account when making the regulations to include the relevance of the good and services, the loss and expenditure including cost of care and medical expenses. It will also consider the body which will be calculating the index in place and whether or not the index is accessible at the same time or times during each year. There is also an obligation under the Act to carry out a review of this section in 5 years.

Occupiers Liability Act, 1995 Amendments:

As mentioned above one of the key focus’ of the Bill is a bid to lower insurance costs through amendments to the Occupiers Liability Act 1995. This is set out at part 6 of the 2023 Bill.

As occupiers and insurers will be aware, the Occupiers Liability Act is intended to amend the law in relation to liability of occupiers of premises “in respect of dangers existing on such premises or for injury or damage to persons or property whilst on such premises”.

The new 2023 Bill amends Section 3, 4 and 5 of the Act.

Section 3 relates to the duty owed to visitors. The amendment is a new subsection after Section 3 (1). Section 3 (1) sets out the common duty of care which an occupier owes towards a visitor. The amendment now provides that in determining the extent of the common duty of care regard should be had to the following:

(a) Probability of a danger existing on the premises,

(b) Probability of an occurrence of an injury to or damage suffered by a visitor by reason of a danger existing on the premises,

(c) Probable severity of an injury to a visitor that might result from a danger existing on the premises,

(d) The practicability and cost of precautions or preventative measures,

(e) Where applicable social utility of the activity or the conduct which gives rise to the risk of injury.

This is useful in that it identifies when considering whether or not the common duty of care has been complied with by the occupier a court will have regard to the probability of danger, what that danger is, and the steps taken (if there is such danger identified by the occupier). In addition (e) is significant where it refers to the social utility of the activity or conduct which will have to be considered.

Section 3(A) has also been amended in respect of occupiers liability which deals with a person entering a premises for the purpose of committing an offence and notes that the occupier will now not be liable for breach of duty imposed under the Act unless a court otherwise determines same in “the interest of justice”.

The Amendment to Section 4(2) relates to the removal of ‘reckless’ as a basis for liability to the occupier in respect of a danger. Previously Section 4(2) referred to liability on foot of knowledge of a danger or where an occupier “was reckless as to whether” a danger existed. That has now been amended to provide that an occupier “knew or had reasonable grounds for believing that a danger existed on the premises.” The amendment is followed throughout Section 4 and the Bill provides that the occupier’s duty owed to recreational uses and trespass the occupier now has to have reasonable grounds for believing that a danger existed on the premises, or they had reasonable grounds to believe that the person was likely to be in the vicinity of where the danger existed. This is of benefit to the occupier removing the ‘reckless’ element and an occupier now would have to reasonably believe that an individual would be in the vicinity of the danger in order to owe a duty towards the recreational user or, indeed, a trespasser.

Section 4(4) has been amended similarly to Section 3 and the occupier now has to consider whether not there is a probability of danger existing the probability of the occurrence of injury as a result of same. The severity and probability of same these are all useful in that it allows the occupier to be in a position to demonstrate that they have considered all of the possible dangers and probability of same and has taken reasonable care to maintain a structure and safe condition in respect of its obligations under Sections 4(4) and (5).

Perhaps the most significant is the new Section 5(A) regarding a voluntary assumption of risk. From an occupiers perspective this Bill provides that the common duty of care under Section 3 (referred to previously) will not impose on an occupier any obligation to a visitor in respect of risks that they willingly accepted where that visitor is capable of comprehending the nature of those risks. This is key where individuals for example attend on site, functions, participate in activities.

The determination in relation to voluntary assumptions of risk is whether or not the visitor or recreational user has been communicated with those risks; has had an interaction with the occupier; or has had an interaction with the occupier of the premises which would demonstrate that the visitor or recreation user was aware of same. The Bill provides (Section 5(A)(4)) that the Civil Liability Act shall not apply in relation to making a determination where a visitor or recreational user has willingly accepted a risk. Again, this is key in circumstances where occupiers (and insurers) will be aware of difficulties that arose in respect of recreational users and visitors.

Therefore in relation to the Occupiers Liability Act the new legislation for the benefit to occupiers (in particulars in light of the new Section 5A) and it is expected that it will rebalance the duty of care owed by occupiers to visitors and recreational users.

It also limits the circumstances in which a court shall impose liability on an occupier of a premises where a person has entered onto the premises for the purpose of committing an offence. Finally, the Bill provides for a number of scenarios whereby a visitor or recreational user has voluntarily assumed a risk which subsequently results in harm hopefully making meaningful the waivers that are signed (for example) by individuals who enter onto a premises and/or individuals who enter onto a premises in order to commit an offence subject to assessment of the occupier of its risks.

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