Keeping our business partners up to date on market changes that matter
This update highlights the legal and regulatory developments which impact the Australian Hotels, Hospitality and Leisure industries.
Importantly, this update centers around the influential findings and report by the Insurance Council of Australia; ‘A Sustainable Public Liability Insurance Market in Australia: The Case for Civil Liability Reform’ (the CLA Reform Report).
The CLA Reform Report signifies a turn of the times within the public liability insurance space and will most certainly gain traction. The Insurance Council of Australia voiced concerns regarding rising small business insurance premiums to a Federal Parliamentary Inquiry, noting that rising costs are attributable to “outdated liability laws, ballooning legal costs and government red tape” [1]. The Federal Parliament will issue its findings on 27 October 2026. Otherwise, this update focuses on the upcoming legislative reforms relevant to the industries noted above.
There has been little development in case law during the first half of the year. This might be attributable to an environment where parties have become reluctant to proceed to trial where legal spend might outweigh any likely award.
Legislative and Regulatory Developments
New South Wales
The Civil Liability Act 2002 (NSW) underpins the scope that claims in negligence operate within in New South Wales, and importantly it codifies the common law of negligence statute. During the early 2000s, the landmark ‘Review on the Law of Negligence’ (coined the Ipp Report) uncovered the Australian insurance crisis in which public liability insurance premiums were becoming unaffordable and various areas of cover unavailable. The Ipp Report was two decades ago, but the recent CLA Reform Report emanates a sense of legislative déjà vu. The CLA Reform Report suggests that the Ipp Report’s effectiveness has ‘eroded’ over time due to judicial activism, rising litigation, aggressive plaintiff lawyers and rising claims costs.
The CLA Reform Report found that, since 2019, the average cost of public liability insurance had increased by 55-60%. For example, live music venues saw premiums rise from as much as $20,000 to $160,000 with small businesses and not-for-profits subject to the most significant premium increases. The Australian Prudential Regulation Authority suggested that the increase in premiums was attributable to rising claim costs (largely due to social inflation, increased legal spend, rising psychological injury and nervous shock claims and inflated medical costs).
The CLA Reform Report concluded that there were two solutions to combat rising insurance cost:
- Civil Liability Review; and
- Risk Management.
Risk Management alone is unlikely to be effective, particularly with respect to high-risk businesses which are inherently unable to remove certain types of risks. In our view, legislative reform is likely the only meaningful remedy to address a looming insurance affordability crisis.
Relevant reforms proposed in the CLA Reform Report are outlined below:
- inclusion of broader range of activities under ‘active recreational activity’.
- simplification of requirements for notices, warnings and waivers.
- more stringent test for discoverability where a claim is brought three years post-injury;
- injured person’s legal representatives to provide notification to the insurer within three months of being retained; and
- long stop limitation period of six years.
- uniform caps on legal fees across Australia (with uniform indexation).
- physical injuries and psychological injuries should not be combined, and be assessed on which is greater;
- whole person impairment disputes must be determined by a psychologist panel; and
- psychological injuries to be treated 12 months post-incident.
- higher thresholds for nervous shock to access economic loss.
- imposing a threshold dependent on the severity of the injury before non-economic loss can be claimed;
- consistent caps on non-economic loss equal to statutory schemes; and
- adding consistent injury scales to determine whole person impairment.
- gratuitous care be calculated on average minimum wage rather than a commercial rate;
- limit awards to circumstances where commercial care has been required/used; and
- awards to be subject to an injury threshold.
- removal of this head of damage. Alternatively, restrict to the most significant situations.
For insurers and businesses, the proposed reforms would mitigate rising claim costs and provide greater underwriting confidence within the NSW market. For businesses, it would reduce unaffordable premiums and potentially reduce claim costs and numbers.
The Vibrancy Reforms have ensued since 2023, aiming to improve the night-time economy of NSW. This year, a third instalment of Vibrancy Reforms was added by the 24-Hour Economy Legislation Amendment (Vibrancy Reforms) Act 2025 (the Vibrancy Act) which will impact most of 2026.
The changes introduced by the Vibrancy Act are as follows [3]:
- a new exemption allowing liquor licensees to discretionarily allow an intoxicated person to remain on premises if they require medical care or transport home (the Premise Care Exemption);
- a new ground for cancellation or suspension of liquor licenses where a licensee fails to prevent ‘significant risks’ to staff or patrons;
- live music and performance venue incentives – two hours longer trading and an 80% discount on liquor license fees for:
- metropolitan venues hosting 10 live performances per month; or
- regional venues which have a predominantly used live music space and 104 live performances per year;
- special events extended trading hours to be approved 24 hours before and after an event takes place;
- clubs to apply to hold functions outside of the main club site; and
- proactive review and removal of restrictions on glassware if there is no reasonable expectation of alcohol related harm.
The Music Bill 2026 is being considered by Parliament but, in essence, it is being utilised to address the overregulation of live music venues and festivals as well as the music industry as a whole. The Music Bill proposes the following reforms:
- a new dispute process where mediation must occur prior to Court Proceedings in live music venue disputes;
- a new noise assessment methodology which reduces the number of noise pollution breaches;
- a three-tier live venue accreditation scheme which extends trading hours and grants; and
- guidelines to improve timely Government agency approvals.
For insurers, the key takeaway is that the government is trying to cut red tape that holds back organised entertainment and nightlife, but, potentially at a cost. For instance, the Premise Care Exemption in the Vibrancy Act may cause a duty of care dysfunction, given pubs and clubs did not breach any duty owed by throwing out intoxicated patrons as they were protected by statute. Now the Premise Care Exemption introduces a discretion to throw out intoxicated patrons, which may disregard the duty of care owed should the circumstances prevail. In a better light, the Music Bill’s proposed mediation requirement would see faster, more confidential and cost-effective resolutions to music venue disputes.
The NSW Parliament passed the Work Health and Safety Amendment (Digital Work Systems) Act 2026 (NSW), which now makes employers responsible for risks posed by digital work systems to employees. The amendment results in the following changes to work health and safety laws in NSW:
- the expansion of an employer’s primary duty of care to not place workers at ‘risk from the use of digital work systems’;
- the definition of digital work systems includes artificial intelligence systems, algorithms, automations and online platforms;
- unions with WHS permits have the power to investigate digital work systems; and
- the duty of care also implicates employers that allocate work by digital work systems and requires employers to consider the risk of unreasonable workloads, metrics or monitoring caused by the system’s allocation.
The scope of the duty only extends to workers; whether it extends to third parties or independent contractors will be determined possibly in future.
For insurers the amendment demonstrates a legislative attitude to label artificial intelligence (AI) as a workplace hazard. While psychosocial hazards are already extensively covered under WHS legislation, the amendments thwarts employers from claiming that AI and other digital systems are out of their control.
On 2 December 2025, the Victorian Parliament passed the Crimes Amendment (Retail, Fast Food, Hospitality and Transport Worker Harm) Act 2025. The Act created some new offences:
- a person who assaults or threatens to assault a retail, fast food, hospitality or transport worker, will commit an indictable offence with a maximum penalty of five years’ imprisonment;
- summary offences for lower-level assaults and threatening or intimidating conduct (including profane, obscene or insulting language) carry penalties of up to six months’ imprisonment; and
- ram raids are now recognised as a form of aggravated burglary.
As of 1 December 2025, a new regulatory framework has been implemented in Queensland’s Office of Liquor and Gaming Regulation. Key provisions include:
- cheques no longer being the default method of payment for certain gaming machines;
- venue operators being permitted to leave gaming machine doors open after gaming has ended for the day to deter break-ins, theft and damage by clearly showing when there is no cash in the machine; and
- reduced red tape for licensees to undertake renovations and alterations at gaming premises.
In December 2025, the WA Parliament passed an amendment to the Liquor Control Act 1988. Relevantly:
- alcohol may now be served with or without a meal on Good Friday and Christmas Day;
- trading hours on Good Friday, Anzac Day and Christmas Day will now be allowed from 10am to midnight; an increase of up to four hours;
- digital ID is now permitted to show proof of age;
- capacity limit for small bars lifted from 120 people to 150; and
- banned Drinkers Register in the Kimberley, Pilbara, Goldfields, Carnarvon and Gascoyne Junction to become permanent.
On 4 May 2026, the Workplace Protection (Personal Violence) Act 2025 will commence operation. Under this Act, businesses will now be able to apply to the courts for a Workplace Protection Order (WPO), which would prevent individuals who have engaged in personal violence in relation to the workplace from entering or being within a particular distance of a workplace. WPOs will last for 12 months, and breach involves a maximum penalty of two years imprisonment, or five years if the breach involves violence. This follows a similar scheme which operates in the ACT, with NSW considering the introduction of similar legislation.
The Tasmanian Government has announced its intention to implement harm minimisation methods in relation to electronic gaming machines (EGMs). These include:
- increasing the mandatory 4-hour daily closure period to 7 hours;
- introduction of a “Ticket In Ticket Out” system;
- a ticket can only be loaded into a gaming machine to a maximum of $200;
- an EGM can only be loaded with a maximum of $100 at any given time;
- a reduced cap on the number of EGMs;
- facial recognition technology will be mandatory with images of all registered excluded patrons obtained through the Tasmanian Gambling Exclusion Scheme; and
- venues will be permitted to host an ATM onsite under the condition that it is fitted with facial recognition technology with restrictions on the number of withdrawals every 24 hours.
The Northern Territory Liquor Commission has introduced new restrictions on Alice Springs pubs, commencing 18 February 2026. The restriction applies to more than 20 licensed venues in the town, limiting full-strength alcohol service to 11:30am – 3pm subject to service of a full meal. The decision is part of the Commission’s ongoing efforts to reduce alcohol-related harm in central Australia. The Commission also recommended that the Northern Territory Government update its legislation to allow the sharing of drinking-related information and introduction of on-site ID systems to prevent people with banning orders from being served.
The Federal Budget presents as a great outcome for Australia’s Hospitality and Leisure industry which experienced approximately 11.2% business failures in the past year. Aspects of the Budget are positive for the sector, some of which include (starting from 1 July 2026):
- companies with up to $1 billion in annual turnover are eligible to offset current-year revenue losses against taxes paid in the previous two years to claim a cash refund; and
- a permanent and instant $20,000 write-off deduction for small businesses on eligible assets to help improve cashflow and reduce compliance costs.
Parts of the Budget which may have a negative flow-on impact for the industry include the introduction of a $10 Passenger Movement Charge increase, coupled with a $50 million funding cut to Tourism Australia for the next four years.
From 1 July 2026, hospitality businesses are required to introduce Country of Origin labelling under changes to the Australian Consumer Law. Print menus, menu boards, other signage, websites and apps must label every dish containing seafood based on its origin (i.e. Australian (A), International (I) and Mixed (M)).
