When is a Liability Waiver Effective?
Giving up, or waiving, the right to claim for the consequences of someone else’s carelessness is something we all frequently do. A surprising number of activities we regularly engage in involve a written, but often unseen, contract which contains a “waiver” clause, being a promise not to sue for any injury, death or property damage arising out of the activity, including loss caused by the clear negligence of another person.
Born and legally tested in the heli-ski and white-water rafting industries decades ago, waivers have grown exponentially in popularity and can now be found in the fine print of almost any activity we undertake, regardless of how risky they are. From hiring a tug, to stepping aboard a whale watching vessel, to getting on a chairlift, to renting a piece of garden equipment or even leaving a jacket at a coat check, waivers are everywhere. Indeed, British Columbia is the most waiver-friendly province in Canada, and Canada likely the most favourable country in the world for enforcing liability waivers.
Insurance companies like waivers because they reduce the number of claims they have to pay out. Businesses like waivers because they encourage more accessible and affordable insurance, and where business liability insurance is not available for the business, a well-drafted and presented waiver offers the opportunity to avoid legal responsibility for the negligence of the business and its employees. Some people argue that while waivers deprive people of their otherwise just right to sue for harm caused by a careless person, waivers do allow businesses to operate and thrive (thus provide needed services) where they might otherwise not be able to because of the threat of successful law suits. The fairness of the bargain, of course, depends on which end of the stick you are on at the time.
A good example of the use of a liability waiver in the marine context was touched on in our blog where we addressed the sinking of the Leviathan II, and whether whale watching vessels undertake an “adventure tourism” activity or not. This is an important issue because, although international convention prohibits the use of waivers in vessel passenger agreements, Canadian marine law provides an exemption to this by allowing the vessel owner and operator to rely on a waiver if the vessel is undertaking an “adventure tourism” activity. The balance of that article addressed the current ambiguity of when a marine activity is an “adventure tourism” activity or not – a surprisingly vague and uncharted area of law. That said, even if such an activity were adventure tourism, and a waiver was placed in the passenger agreement, the owner and operator of such a vessel could only rely on the waiver if the remaining legal requirements of an enforceable waiver are met. In other words, having a waiver written in the passenger agreement does not mean it is automatically enforceable. The following legal test needs to be met for the waiver to be enforceable:
- the waiver must actually apply to the facts of how the accident occurred;
- the waiver must not be unconscionable; and,
- the waiver must not be against public policy.
Does the liability waiver apply to the facts?
To answer this, courts have generally split the question in two. First, the terms of the waiver must include the general circumstances that caused the participant’s injury. Second, a waiver can only cover matters which were in the mind of the participant at the time the release was signed.
In answering the first question, the waiver’s language is considered. The negligence of a person is not a risk people would naturally assume is part of an adventure activity, however risky the activity itself is. Clear language is required if a tour operator wishes to release themselves from liability for the negligence of their employees or agents. Ambiguity in the contract is generally interpreted in favour of the injured participant. In a recent decision, the BC Supreme Court did not uphold a signed waiver. This case involved a physiotherapist being injured at a training course, but it is relevant to marine activity operators. The waiver mentioned that there were risks involved in the course’s “techniques and procedures”, but in declining to give effect to the waiver, the court found it did not identify or provide examples of those risks, it did not specify the nature and severity of the risks, and it was ambiguous whether the waiver extended to acts and conduct of other parties beyond the participant’s control.
Regarding the second part of the question (does the wording of the waiver apply to the facts), courts must consider whether the participant actually understood what they signed. Generally, by signing a waiver, it is presumed that the participant has read and understood it. The activity operator is under no special obligation to ensure that participants understand what they have signed. However, where the operator knew or should have known that a participant was unaware of the legal or practical effects of signing the waiver, they have to take reasonable steps to advise the participant. This can arise where the participant was told to sign the waiver in a hurried or casual manner and not given adequate time to read and understand the waiver.
Is the waiver unconscionable?
Even if the waiver applies to the facts of an accident, the court may find the waiver unconscionable (essentially unfair). To prove that a waiver is unconscionable, the participant and the activity operator must have been in significantly unequal bargaining positions. The operator must also have abused this power to get the participant to agree to an unfair waiver. That said, in the context of adventure activities, courts have almost always held that it is not unconscionable to require a participant to sign a waiver that prohibits suing for negligence and injury. Participants almost always have the choice between signing the waiver and participating, or not participating at all. Even in cases where the participant has traveled large distances to participate in an activity, only to find that if they didn’t accept the waiver they would be turned away, has the court upheld a waiver. It would be rare to successfully challenge a waiver on the grounds of conscionability.
Is the waiver against public policy?
The final test that a waiver must also pass to be enforceable is to confirm the waiver is not against public policy. The power to overturn a waiver because of public policy is rarely exercised by the courts (at least in B.C.). When it is exercised, it is done to maintain the certainty and stability of the use of waivers generally in industry. Waivers in adventure tourism activities generally do not give rise to public policy concerns because, by definition, these activities have inherent risk (note: this is not to say, for example, the Leviathan II was engaged in adventure tourism when it capsized). Many marine activities, however, with reasonable care of the business, should be low risk, and a court might find it is against public policy to enforce a waiver where to do so would discourage marine safety. Examples of when a waiver is more likely not to be enforced on public policy grounds include where an activity operator knowingly or recklessly provides a substandard product or service, or where criminal conduct (including criminal negligence) is involved.
Properly drafted and presented waivers will provide marine owners and operators in B.C. with strong legal protection from claims, and reduce disincentives for providing innovative and necessary marine services. However, despite recent advances in marine safety, tragic and costly accidents will continue to occur, and it should never be assumed that a liability waiver will provide complete protection for vessel owners or operators. In cases where there has been significant injury or property damage, or death, a judge will often be asked to decide whether the waiver is enforceable.
Darren Williams is marine lawyer specializing in accidents and is a partner with League and Williams Law Corp, in Victoria B.C. Canada and can be reached for comment at, or 250-888-0002. His emergency phone is 250-589-2174. Matthew Melnyk is a marine lawyer and co-author.
