Can Australian Music Survive in the Age of Spotify?
The Insurance Council of Australia has just released an important report highlighting that live music venues have been disproportionately affected by rising public liability insurance premiums – sometimes up to 16 or 17 times previous premiums.
These increases are driven by:
• Rising claims costs
• Legal and litigation expenses
• Psychological injury claims
• Delayed claim notifications
• Complex liability settings
Key Recommendations for national Tort refoRelevant to Live Music Venues
1. Psychological Injury Claims Reform
Issue: Psychological injuries are increasingly claimed alongside physical injuries, inflating costs.
Recommendations:
• Assess damages based on the greater of physical or psychological injury—not both.
• Require treatment within 12 months of the incident to claim psychological injury.
• Use independent psychologists for impairment assessments.
2. Dangerous Recreational Activities Legislation Review
Issue: Current laws inadequately protect venues offering leisure activities.
Recommendations:
• Broaden definitions to include activities like live music events.
• Clarify and simplify waiver and risk warning requirements.
• Reinforce legal protections for venues when risks are obvious and warnings are provided.
3. Worker-to-Worker (WTW) Claims Reform
• Issue: WTW claims (e.g., subcontractors injured at venues) are costly and complex.
• Recommendations:
• Introduce proportionate liability between employers and third parties.
• Limit recovery actions to within 3 years of the incident.
• Require early notification of intent to recover costs.
4. Limitation Periods and Notification Requirements
Issue: Claims are often lodged years after incidents, making defense difficult.
Recommendations:
• Tighten the discoverability test to limit late claims.
• Require legal representatives to notify insurers within 3 months of being retained.
• Introduce a 6-year long-stop limitation period.
5. Legal Costs Oversight
Issue: Legal fees often consume a large portion of settlements.
Recommendations:
• Cap legal fees at 20% of claim value for claims up to $300,000.
• Index caps to inflation to maintain effectiveness.
6. Claim Farming Ban
Issue: Unsolicited claim solicitation inflates claim frequency and costs.
Recommendations:
• Enact uniform national laws banning claim farming.
• Empower regulators to enforce bans across all jurisdictions.
Priority Actions for Immediate Impact
The report identifies three urgent reforms that would most benefit sectors like live music:
1. Psychological injury claim reform
2. Review of dangerous recreational activity legislation
3. Worker-to-worker claim reform
These actions are expected to reduce premium pressures, improve insurance availability, and support the viability of live music venues and similar businesses.
