Tommy Gill has owned the Wild West play centre in Westport, Co Mayo with his wife, Tish, since 2020. The pair are in the process of building up the business again following Covid disruption, but insurance is the biggest issue they face.
“When it comes to a business in the play or leisure centre, anything to do with insurance is the most important thing. Wondering if you can even get insurance is the biggest question,” he says.
The business, which has a sensory room, a children’s play area and a cafe, has had no claims, but still struggled to get public liability cover, a necessary step for the premises to operate. Insurers have a perception, he says, that the sector is high risk due to “excessive” litigation in recent years.
He, as chief executive of Play Activity Leisure Ireland (Pali), an organisation of 130 member businesses in the sector, approached a broker for a group scheme to get coverage, which proved to be successful.
However, he says if things don’t change, he fears there will be few options for children’s play areas in the future.
“We’ve already seen places shut down because of this, or community playgrounds not going ahead because of compensation concerns. There will be a lot of issues going forward if this continues,” he says.
Businesses, particularly those designed for children or young people, have for years raised concerns about the impact of personal injury litigation on their services. There are regular reports of court cases or settlements which show the extent to which damages are awarded for those who are injured in public or private premises.
On Monday, a child who fractured his elbow when he fell off a playground’s monkey bars seven years ago settled his High Court action for €50,000. The boy was in a plaster for six weeks after the incident, which happened at the playground at Naas racecourse, but has since fully recovered.
Earlier in the month, a boy who suffered burns to his hip, thigh and foot when coffee spilled on him at a play centre settled a High Court action over the incident for €60,000.
In April 2021, the Government took steps to reduce the extent of damages paid out in response to these claims by introducing personal injury guidelines. Before this, a 2018 report by Justice Nicholas Kearns found payments for soft tissue injuries in Ireland were 4.4 times higher than that in the UK.
It was hoped the payout guidelines would reduce the number of claims made, and, in turn, reduce the cost of premiums for businesses to ensure their viability. There has been some progress in this regard.
Data from the Courts Service shows new personal injury claims initiated in the High Court averaged 223 per month in the first nine months of last year, about one-third of the 666 monthly average for 2019.
A report from the Personal Injuries Assessment Board (PIAB), published in November, found the average value of compensation awards for personal injuries has dropped by 38 per cent since new guidelines were introduced.
However, if litigation on a case was initiated prior to the implementation of the guidelines, they are subject to the previous Book of Quantum, as has been the case with the recent high-profile settlements.
According to the court’s service, there was a “spike” in claims lodged just before this deadline. Sources working in the sector say they expect it will be 2024 before the impact of the guidelines can be properly assessed as pre-guideline cases are continuing to work their way through the courts.
As a result of most existing High Court personal injury cases being initiated before the guidelines, there are few decisions to date indicating how judges may apply them.
Insurance Ireland, the representative body for insurance companies in the State, says while “good progress” has been made in overall market reform, it is “essential” that outstanding measures in the Government’s action plan are concluded.
“These are the elements which we believe will help to take the volatility out of the employers, public and commercial property liability market segments, making them more viable for insurers and attracting more competition,” a spokeswoman says.
“The latest data from PIAB shows a more positive trend emerging in 2022 in terms of claimants accepting PIAB awards, but the proportion of cases going through litigation remains far too high. In order to bring about further premium reductions, it is important that more cases are resolved through PIAB and less through litigation.”
Peter Boland, director of the Alliance for Insurance Reform, says while there are obvious repercussions of these play-related claims for businesses, there are also societal consequences if compensation claims continue in this area.
“Recent play-related personal injury settlements illustrate the disproportionate amounts of money still to be made by claiming when an incident happens, and the unbearably high duty of care still being imposed on the owners and operators of children’s play facilities, both public and private,” he says.
“The ultimate, inevitable outcome of the current system is that Irish children will no longer be allowed to engage in the risky play essential for personal development, and we will have a population unable to assess personal risk because sufficient play facilities are no longer available and have been wrapped in a legal bubblewrap for all of their formative years.”
Boland says the Government has a “pivotal role” to play in avoiding this scenario through the “robust defence” of the judicial guidelines and through the “urgent enactment and commencement of promised duty of care reforms”.
According to the Government’s most recent progress report on insurance reform, published in November, some 90 per cent of actions in its plan for the sector are completed or are ongoing.