Hosts sued by a party guest, who was set alight by another guest in a drunken prank gone wrong, have won an appeal ruling which a lawyer says is a relief for the insurance industry. 

A Queensland farming family hosted a 21st party for their son when a guest found a jerry can in an unlit shed, poured a small amount of petrol on the sleeping guest and set him alight with a cigarette lighter. 

Charles Dearden, who suffered burns to his upper body and limbs, sued party hosts Terrence and Nicole Ryan for damages for personal injury. The Ryans subsequently brought third proceedings against Robert Taylor, the guest who set Dearden alight. 

A Supreme Court judge found the Ryans and Taylor liable, awarding Dearden $600,797.55 and apportioning 70% of the liability to Taylor. The court said Dearden was owed a duty of care and reasonable steps should have been taken to minimise the foreseeable risk. Taylor separately pleaded guilty to a criminal charge of causing grievous injury. 

A Court of Appeal subsequently set aside the ruling. The judges considered that if occupiers were under a legal duty to take steps to prevent harm being caused to another by a third party from the misuse of things kept in an ordinary way on their properties, the burden would be intolerable. 

Meridian Lawyers principal Matthew McDonald told insuranceNEWS.com.au the decision in the first instance “had the potential to bring to an end the time-honoured backyard birthday party”. 

Mr McDonald says the Ryans held a farm policy, but the issue could equally apply to a home and contents policy. 

If the Ryans were found liable it would impose a burden on people hosting a party to have security guards. 

“As the judge said, it would make the burden on a party host intolerable,” he said. 

This could have required insurers to refine or limit the scope of coverage under an eligible policy which would respond to such an incident, or increase premiums. 

“However, the Queensland Court of Appeal has confirmed that the duty of care owed by a party host does not extend to protecting partygoers from the criminal acts of third parties in the absence of a special relationship. In so doing, the party can start again,” he said. 

“From an insurer’s point of view, if the decision at first instance was to stand, the potential for claims resulting from incidents in residential party venues would likely dramatically increase.” 

Dearden has filed an application for special leave to appeal to the High Court.