Equine insurers are being warned that an Appeal Court ruling has opened the way for a massive increase in the cost of claims.
The Court of Appeal has ruled that horse owners are under a strict liability if their horses escape from fields and cause accidents or damage when panicked, even if their enclosures are secure.
Equestrian liability specialist David Miles of Gates Adjusting Partnership said the new interpretation of the Animals Act 1971 had serious consequences for insurers.
"This is going to hit insurers hard and must be of grave concern for all firms involved in equine policies," he said.
"It would now seem to be extremely difficult to defend cases involving the escape of animals where they cause damage whether or not due to negligence on the part of the owner or keeper as a result of the horse panicking or being frightened.
"Furthermore, it may well be argued that the keeper will be liable even when the horse is under proper control but is then spooked or frightened and then causes damage."
The ruling was made by the Court of Appeal in the case of Mirvahedy v Henley. The case involved three horses which escaped from a field, breaking through an electric fence and a barbed wire fence before making their way up a track to a minor road and then onto the A380 Torquay to Exeter Road.
One of the horses was in collision with a car, seriously injuring the driver, Hussain Mirvahedy, and a second vehicle was in a collision with another of the horses, injuring a passenger. Both horses were killed.
It was held at first instance that the owner of the horses, Dr A Henley, had not been negligent. For some unknown reason the horses had escaped from a field which was adequately fenced.
However, the Court of Appeal found that there was a strict liability under Section 2(2) of the Animals Act and found for Mr Mirvahedy.
"The Court of Appeal, on a somewhat tortuous interpretation, have decided that it is in the character of a horse to panic and possibly cause damage if frightened and that keepers were aware of this and so under the Animals Act were strictly liable for any damage caused," said Miles.
"Although some may think the judgement nonsensical there is no doubt that insurers will now have considerable difficulty in repudiating claims where horses manage to escape, even if it is due to deliberate acts of third parties."
