Loaning a horse, what is it and what are some of the issues involved?
It is in fact a common practice in the equestrian world which allows a loaner who was is the owner of the horse to retain ownership whilst a borrower the loanee takes on the daily care and costs.
It starts off as a friendly arrangement, but the legal reality is complex, and a clear horse loan agreement is essential to protect both parties without a robust framework.
It is also important to consider for any owner before entering into any loan agreement as to whether it is the right arrangement for the horse. Owners need to consider the horses needs and welfare and consider the age of the horse, whether it is very old and needs special care or perhaps is quite young but with an injury which will rule out it being ridden, then these factors need to be taken into account before entering into any loan agreement.
So, let’s have at a look at loaning a horse …
Have a well drafted loan agreement
Currently in the UK we do not have a specific "Horse Loan Act". Instead, the arrangement is governed by contract law and the law of bailment. It is important to note that verbal agreements are notoriously difficult to enforce. It is strongly advised that every loan be underpinned by a comprehensive signed written agreement.
A standard "one-size-fits-all" template may not cover the specific needs of a particular horse such as dietary restrictions or specific exercise limits. A well drafted agreement should therefore clearly define and state the following:
Useful tip: Consider having the horse vetted in the same manner as you would as if you were buying a horse. This will show to the loaner as well as the loanee any defects the horse has.
The need of a passport
Under UK law the horse’s passport must ALWAYS accompany the animal. If a horse is moved to a new yard under a horse loan agreement, the borrower must take possession of the original passport. Owners are legally required to ensure their horse is microchipped and that their details are up to date with the relevant Passport Issuing Organisation (PIO). It is best practice for the owners of the horse to notify their PIO when a horse goes out on loan, though they should retain a photocopy of the passport for their own records.
Liability and insurance
Then we have the issue of liability and insurance, as the "keeper" of the horse, the borrower may be held responsible for any damage or injury the horse causes to third parties or their property.
Ensure when agreeing the loan, that the horse is insured!
Most frequent disputes
So, you might be wondering … well Monica where do the most frequent disputes occur from loan agreements?
Well commonly it is concerning the condition of the horse upon its return to their owner or over the loan period. If the borrower fails to provide adequate care or if the owner takes the horse without notice it is a breach of contract!
To mitigate these risks, owners should visit the proposed new home and check references before the loan begins. Likewise, borrowers should trial the horse to ensure suitability and verify that the person offering the loan is the registered owner listed in the passport.
There are also other arrangements, such as shares, part shares or part loans. What is important is that the parties are clear on what is involved in the arrangement in terms of rights and responsibilities.
It is wise to be cautious about loaning a horse to a complete novice, not only from the practical aspect of ensuring that the horse is well looked after but also from the possibility of legal action being brought against you.
Let’s explore this …
Flack -v- Hudson [2001] QB 698, is a landmark case concerning strict liability under Section 2 of the Animals Act 1971. In this case Mrs Flack was riding a horse with the consent of its owner when the horse shied at a tractor. The horse bolted and unfortunately Mrs Flack fell from the horse and died from her head injuries. It was her husband who sued the owner and the tractor driver. The tractor driver was later found not to be at fault. Mrs Flack was also not in any way to blame for her own unfortunate accident. She did have some riding experience but could not be said to be an experienced rider. It was her husband who had brought this case under Section 2(2) of the Animals Act 1971, who argued that the horse that his wife was riding was extremely unsafe in traffic. It was known by the owner that this was a vice of this horse and that his wife had not been told about this specific problem. The owner of the horse was held to be liable for this accident. It was established that this horse possessed a known specific temperament, that it had a dangerous propensity to bolt whenever it was near agricultural machinery.
The Court of Appeal ruled that Section 2 allows one keeper of an animal to sue another keeper. The owner of this horse was liable to the rider. It was because of the owners knowledge and awareness that the horse had a specific fear and a propensity to bolt around agricultural machinery whereby liability was established.
The case of Flack remains the leading authority that owners can be held liable if their horse has abnormal, known traits that cause harm to another person riding it. It also came out in this case that the owners husband had been injured by that same horse previously when it had bolted in similar circumstances.
Cases involving riding accidents can be highly fact dependent and the courts have distinguished the case of Flack from later cases such as Turnball v Warrener and Koetsier v Thomas [2012] EWCA Civ 412, where riders were deemed to have voluntarily accepted general inherent risks of horse riding.
With horse loaning there are many issues, hopefully this article assists.