Managing Liability & Risks Inherent to Recreational Activities

By: Joan S. Allgaier, Esq., and Deana R. Dagner, Esq

For those who require a signed release and waiver for their daily business activities, it is probably a form that was created many years ago and has been used from year to year with few, if any, revisions.  When was the last time you reviewed the release and made sure that it was appropriate for your business?  Like many documents used by businesses, the importance of the language in the release agreement often does not become apparent until something has gone wrong. When there is a lawsuit and attorneys are involved, a release form that has seemingly worked for years is suddenly under the microscope.

It is important to ensure that your release agreement is appropriate for your business and complies with the applicable laws of your state.  Our law firm, Grund · Dagner, P.C., recently obtained a successful outcome for a client who provided recreational services (here, an adaptive-skiing program) to persons with disabilities in a case where the plaintiff (who was 17-years old, legally blind, and had cerebral palsy and developmental disabilities at the time of the accident) sought more than $30 million in damages, in large part because the release and liability waiver signed by the plaintiff and her mother before the subject accident withheld judicial scrutiny and was deemed valid and enforceable under Colorado law.

In our case, the plaintiff was on her first ski lesson in a bi-ski (a sit-down skiing device) that was controlled from behind by an instructor holding tethers that attached her to the bi-ski.  While the plaintiff and her instructor were on an intermediate, “blue” ski run, an out-of-control skier collided into the instructor, ripping the tethers from her grasp.  Unrestrained, the plaintiff traveled more than 400 yards down the slope, until the bi-ski hit a tree; she was ejected to the side and sustained serious injuries.

She initially claimed that the recreational service provider was negligent for failing to follow various proper safety procedures.  However, before plaintiff ever went skiing with our client, both she and her mother signed a release and liability waiver, where they released the recreational service provider and its employees from any claims of negligence arising out of their activities with the recreational service provider.  We sought to dismiss the negligence claim based on that liability waiver.

This is where the language of the release becomes important.  Because while exculpatory agreements that insulate a party from its own negligence are generally enforceable, they are also generally disfavored and reviewed with strict scrutiny.  Although the law may vary from state to state, releases are generally enforceable where there is no obvious disparity in bargaining power between the parties; the parties’ intent is expressed in clear and unambiguous language; the circumstances and nature of the service involved indicate that the agreement was fairly entered into; and the agreement does not violate public policy.  Agreements that may violate public policy generally involve businesses that are engaged in performing a public service of great importance or practical necessity.

Releases, however, do not provide total immunity. Thus, they usually will not shield parties from gross negligence, recklessness, or willful and wanton conduct. Whether claims of strict liability can be released depends on the laws of each state.

Release language must be clear and unambiguous, and written in simple, clear language rather than legalese or technical jargon. The release should be one stand-alone document – not a paragraph or sentence that is part of a larger form or other document – that specifically identifies who it is that is being released, the activities being engaged in, all potential risks or harm, is neither long nor complicated, and provides that claims arising out of the subject activity, including negligence, are being released. The goal is to minimize the likelihood of confusion or failure of a party to recognize the full extent of the release provisions.

When a minor child will be participating in the activity, the first step is to determine whether the state permits a parent to sign a release on behalf of a minor child and to ensure that the release complies with the requirements for enforcing such a release against a minor and his/her parents, because there are few states that allow this.  In our case, Colorado law – which is fairly unique – permitted liability waivers and releases signed by parents to be enforceable against minors and their parents as long as the decision is “voluntary and informed.”  Therefore, the right language is all the more important.  The more the release tells that participant and his or her parents about the activities involved and related risks, the more likely it is to withstand judicial scrutiny.

To the extent you provide patrons with documents or letters in addition to the release, ensure consistency between and the accuracy of each and every document the participants receive. Avoiding contradictions and inconsistencies must extend to your advertising materials and language on your website as well.  This is important because any inconsistency or inaccuracy may later be construed as a misrepresentation.

Another issue to consider is whether you will be dealing with patrons who speak a language other than English.  If that is the case, then there needs to be assurance that the potential participant understands the release, either by having the release translated to the appropriate language or by having someone available to explain the release to that person in their native language.

In our case, we ultimately obtained the dismissal of that negligence claim based on the liability waiver signed by plaintiff and her mother.[1]  The release in our case withstood scrutiny because there was not an obvious disparity in bargaining power between the parties; the release language was clear and unambiguous; it described in detail the potential risks (including serious injury and death) of the activity being engaged in, such that the mother’s decision to sign it was voluntary and informed; it was fairly entered into; and it did not violate public policy.

Once the negligence claim was dismissed, plaintiff had to prove that the adaptive-skiing provider was “reckless” to recover any damages against it at trial, rather than having to merely prove negligence (i.e., the failure to do what a reasonable person would have done under the same circumstances).  In essence, the plaintiff was forced to prove that the recreational-service provider acted in a willful and wanton manner.  Ultimately, the jury rejected the claim of “recklessness” and found that the recreational-activity provider was not responsible for the plaintiff’s injuries.

Whether your business uses releases for recreational activities or for other purposes, it is important to understand the requirements of your state and to ensure that any release you use is appropriate for the activity in question.  Otherwise, when you need it most, the release that you use on a daily basis may not withstand judicial scrutiny.

Grund • Dagner, P.C.

1660 Lincoln Street

Suite 2800

Denver, CO 80264

(303) 830-7770

www.gdnlaw.net

[1] See Squires ex rel. Squires v. Goodwin, 829 F.Supp.2d 1062 (D.Colo. 2011).