Dozens of equine businesses face closure because of dramatic increases in insurance costs, a lobby group has claimed.
In some cases, annual premiums have risen by as much as 200 per cent in a two-year period and others are unable to obtain insurance at all, effectively putting them out of business, said the Country Land and Business Association.
It is calling on the Government to review the Animals Act 1971, which has triggered the price rises for riding schools and livery yards.
The problem stems from a 2003 House of Lords interpretation of the Act which broadened the scope of the original law, leaving any business involving a potentially dangerous animal highly vulnerable to being sued.
The Animals Act aimed to make the owner of a dangerous animal liable for any harm or damage it caused.
Under the new interpretation, liability also hits owners of a perfectly normal animal that causes injury just by behaving in a way typical of its species.
This means that if a horse bolts after being spooked, the owner can be liable for any damage or injury even if they had taken every precaution possible.
Similarly if a cow acts aggressively to protect its calf and injures a dog walker, the farmer can be liable.
One association member saw their annual premium go up from #2,000 to #6,000 over two years after a claim was brought against their riding school for an accident beyond their control.
Another school and livery yard saw an increase of 140 per cent, from #5,000 to #12,000 in two years without any claims being brought within that time. Both owners are considering the future viability of their businesses.
The association?s president Mark Hudson said: ?Urgent action is needed if we are to prevent our equine sector from being permanently lamed.
?Obviously, owners of equine businesses must adhere to the high safety standards but, currently, owners are being held liable and being penalised a great deal of money even where it is recognised they are not at fault.
?Livestock businesses are facing severe financial pressure at the moment. The equine sector is a vital farm business diversification opportunity as well as providing valued community services and tourist facilities.?
Frances Beatty, regional director of the CLA, said she was contacting horse owners across the West Midlands to discuss the problem.
?I am not sure people are aware of it yet, we are having to highlight it because unless you are coming up to renewing an insurance policy you might not realise the implications.
?We have got hundreds of equine businesses in the West Midlands and we are looking at setting up arrangements to get around the problem with our own insurers and find a solution.?
The organisation launched a petition at the Royal Show in Warwickshire last week calling for a review of the Animals Act. The petition will be handed to Horse Industry Minister Jim Knight at the CLA Game Fair in Leicestershire later this month.