Striking a new balance | Changes to occupiers’ liability - an insurance perspective

The Courts and Civil Law (Miscellaneous Provisions) Act 2023 (the Act) was signed into law by the President on 5 July 2023. The Act includes new provisions governing an occupiers’ duty of care under the Occupiers’ Liability Act 1995. The part of the Act relevant to occupiers' liability was commenced on 31 July 2023.

The Act aims to create a new balance between: the rights of occupiers of premises and the duty of care owed to entrants. ‘Entrants’ are divided into three categories: visitors, recreational users and trespassers.

By reducing the legal burden on occupiers in some respects and clarifying the obligations of entrants (and the duty of care owed to them), the changes are intended to have the effect of reducing uncertainty on issues of occupiers’ liability. The Minister for Justice has expressed the hope that this may ultimately lead to more affordable insurance coverage for businesses. 

The extent to which the new legislation will have a practical and immediate/longer term impact in this regard, as the courts begin to apply it, remains to be seen.

This re-balancing of the duty of care forms part of an insurance sector focus under the current Programme for Government. On 28 June, the Minister of State with responsibility for Financial Services, Credit Unions and Insurance noted that the legislative change would bring Ireland more closely in line with other EU Member States’ approaches to claims environment and a personal responsibility culture.

Key elements of the Act from an insurer and coverage perspective include:

Reckless disregard

Occupiers have a duty not to act with reckless disregard for recreational users or trespassers.

The Act raises the threshold for holding an occupier liable (on grounds of reckless disregard). Previously, an occupier acted with reckless disregard where they knew or had reasonable grounds for believing that a danger existed on the premises. Under the Act, an occupier is only deemed to have acted with reckless disregard where they knew or were reckless as to whether that danger exists.

Extent of duty of care

The Act limits the extent of the duty of care owed by an occupier towards an entrant.

In assessing whether an occupier has complied with their duty of care towards an entrant, regard will be had to several additional factors including:

• probability of the danger existing and injury/damage being suffered
• probable severity of injury/damage if suffered and
• practical and policy-based considerations such as cost of taking preventative measures and social utility of the conduct creating the risk in the first instance

Voluntary assumption of risk

The key change is that an occupier does not owe a duty of care to visitors or recreational users who voluntarily consent to (and are able to understand) the risks. Notably, consent to the risk does not require proof of communication with the occupier. It can be implied from words/conduct.

Significantly from an insurance coverage perspective, occupiers are entitled to assume that entrants can normally look after their own welfare and will take all reasonable care for their own safety while on the occupier’s premises.

Entry with intention to commit an offence

Previously, a court could award damages to a recreational user or trespasser who entered an occupier’s premises for the purpose of committing an offence (or, once present, commited an offence), where it believed the award to be in the interest of justice.

The Act restricts occupiers’ liability in this context to ‘exceptional circumstances, having regard to matters such as the nature of the offence, the extent of [occupier] recklessness…or the fact that the person was not a trespasser’.

What next – practical tips

Some practical steps that insurers might take will include review of product offerings to consider how to reflect the changed position for occupiers wishing to avail of coverage that is more tailored to the new balance of rights. This includes terms and conditions, inclusions and exclusions, disclosures material and similar. Existing policies covering occupiers’ liability will have been crafted with the previous duty of care in mind.

In conjunction, insurers, as well as intermediaries, are likely to be assessing impact for their product oversight and governance processes. This includes engaging with those in the distribution channel and potentially the target market and ensuring appropriate policyholder communication. 

The new balance on occupiers’ liability may increase competition in the Irish market. Media sources have reported that new entrants have already been attracted to the Irish insurance market ahead of the anticipated change.   

For advice or for further information on this topic please contact James Grennan, Partner, Laura Mulleady, Partner, Sinéad Lynch, Partner, Emma Martin, Of Counsel, Niall Guinan, Associate, or any member of the A&L Goodbody Insurance & Reinsurance team.

Date published: 13 July 2023

Updated: 4 August 2023