Australia: Risk management for event organisers from a legal perspective

Last Updated: 11 November 2015
Article by Stephen Williams

Extracts from a paper presented at an Events Industry Association WA seminar titled Legal Rights and Responsibilities on 27 October 2015 at Ascot Racecourse. The presentation focused on the concepts of duty of care and negligence.

Duty of care

Clear and long standing principles have been set out on this issue. The main case is Donoghue v Stevenson1. This case developed the idea of owing of a duty of care to others. Mrs Donoghue was drinking a bottle of ginger beer which contained a dead snail. She got gastroenteritis and fell ill, and she sued the brewer of the ginger beer, Mr Stevenson. The House of Lords held that he owed a duty of care to her, which was breached by the presence of the dead snail in the bottle, because it was reasonably foreseeable that failure to ensure the safety of the ginger beer during manufacture and bottling would lead to harm to someone who drank it, if contaminated.

The case established the concept of ensuring the safety of others who could be put in harm's way if it is reasonably foreseeable to us that an action or a failure to take some action on the part of an individual could lead to harm.

In the context of an event, the existence of this duty of care creates a significant obligation on organisers to get things right.

After a plethora of what were considered to be "soft" decisions in favour of plaintiffs and after the spectacular collapse of HIH Insurance in 2001, the WA State Government enacted the Civil Liability Act 2002 (Act) and this legislation now generally governs this area.

Civil Liability Act

Duty of care

Under Section 5B:

  1. A person is not liable for harm caused by that person's fault in failing to take precautions against a risk of harm unless:
    1. the risk was foreseeable;
    2. the risk was not insignificant; and
    3. in the circumstances, a reasonable person in the person's position would have taken those precautions.
  1. In determining whether a reasonable person would have taken precautions against a risk of harm, the Court is to consider:
    1. the probability the harm would occur if care were not taken;
    2. the likely seriousness of the harm;
    3. the burden of taking precautions to avoid the risk of harm; and
    4. the social utility of the activity that creates the risk of harm.

This part covers the forseeability of events and how easy it would be to guard against them. For example, cabling for loudspeakers left unguarded in a public access way at an event would be likely to cause injury if care was not taken by, say, covering them up or routing them overhead. If someone tripped and fell there might also be no injury but again, a more serious injury could quite easily be sustained. The burden of taking precautions is low in this case and depending on the type of event, the social utility argument may also be relevant. The number of different factual situations to which these issues might have to be applied is huge, and depends on things like the type of event being staged, the time of day, whether alcohol was being served, the age of the audience/participants, the weather and the venue, along with many other factors.

Section 5B had its beginnings in the case of Wyong Shire Council v Shirt2. In this case the plaintiff was gravely injured after water skiing in a lake. The water was very shallow in some places, and that is why the plaintiff was injured. The defendant had erected a 'Deep Water' sign close to where the plaintiff was injured, which was meant to serve as a border and to state that beyond that sign, the water got shallower. The defendant was found liable. The Court held that reasonable foreseeability in a breach of duty of care situation had a very wide scope. Foreseeability in this context meant simply that the risk was not "far-fetched or fanciful." The Court said "Consequently, when we speak of a risk of injury as being 'foreseeable' we are not making any statement as to the probability or improbability of its occurrence, save that we are implicitly asserting that the risk is not one that is far-fetched or fanciful." In this case, the risk was that the ambiguity of the sign might induce people to believe that the water was deep and therefore safe for water skiing. This was the foreseeable risk. The Court went on to say "The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have."

By way of example, in Macarthur Districts Motorcycle Sportsmen Inc v Ardizzone3, the respondent (12 year old boy at the time of the accident) was a participant in a motocross racing event held by the appellants. He was attempting a jump on a straight stretch of track when he fell over and lay winded on the track and was struck by another motorcyclist. The duty on the appellants in this case was to provide adequate race marshals at curves and jumps. That someone might fall of a motorcycle was clearly a foreseeable event and stationing marshals would have been an easy and cheap precaution which could have prevented the accident.

Exclusions

The Act does not create a blanket opportunity for plaintiffs to sue event organisers. There are exceptions or defences of which you should be aware.

Under Section 5H a person is not liable for harm suffered by another while that person was engaged in a "dangerous recreational activity", if the harm is the result of something that is an "obvious risk" of that activity and that is the case whether or not the person was aware of the risk.

A "dangerous recreational activity" means a recreational activity that involves a significant risk of harm, for example being a spectator at a motor sport event or the Rottnest Swim and an "obvious risk" is a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person and includes risks that are patent or a matter of common knowledge.

In law, a "reasonable person" is a reasonably educated and intelligent but nondescript person, against whom a defendant's conduct can be measured, in other words; nobody special, not an expert on risk or a legal expert on liability.

Under Section 5I, a person does not owe a duty of care to a person who engages in a recreational activity if the risk of the activity was the subject of a "risk warning."

  • If a child (defined in the Act as over 16 but under 18) suffers harm, the person may still rely on a warning to a parent, if the parent is not an incompetent person (defined in the Act as under 18 or who, because of a physical or mental disability, lacks the capacity to understand the risk warning), whether or not the child was accompanied by and under the control of the parent.
  • If a child suffers harm, the person may also still rely on a warning to another person who is not a parent, if the other person is not incompetent and either the child was accompanied by or under the control of that other person.

Under the Act, a "risk warning" is a warning given in a manner reasonably likely to result in people being warned of the risk, before engaging in the recreational activity. It is not necessary to establish that the person received or understood or was capable of receiving or understanding the warning. Such a warning can be given orally or in writing (including by means of a sign or otherwise). It need not be specific to the particular risk and can be a general warning of risks that include the risk concerned, so long as it warns of the general nature of the risk.

A defendant cannot rely on a risk warning on grounds including the following:

  • It must be given by the defendant or by the occupier of the place where the recreational activity is engaged in.
  • If the harm concerned resulted from a contravention of a written law for the protection of personal safety. There are many of these for example, the Dog Act 1976 (obviously relevant to events involving dogs) and the Liquor Control Act 1988 (relevant to events involving the supply of alcohol).
  • If the warning was contradicted by any representation as to risk made by or on behalf of the defendant to the person.
  • If it is established the harm concerned resulted from an act done or omission made with reckless disregard for the consequences of the act or omission.
  • If it is given to an incompetent person.

Under Section 5J:

  • Despite any written law, a contract for the supply of recreational services may exclude, restrict or modify liability created by the Act that results from breach of an express or implied warranty that services will be rendered with reasonable care and skill.
  • No written law renders such a contract term void or unenforceable or authorises any Court to refuse to enforce the term, to declare the term void or to vary the term.
  • A contract term for the supply of recreational services to the effect that a person to whom the services are supplied engages in any such activity "at his or her own risk", excludes any liability under the Act that results from breach of an express or implied warranty that the services will be rendered with reasonable care and skill.

In other words it is possible to contract out of liability. This might be in a document signed before participation or it may be by way of a document which does not appear to be a contract (for an example of the latter, a ticket or a receipt "No responsibility for items not collected after the show"). Any such notice has to be obvious and clear. In Thornton v Shoe Lane Parking Ltd4, the plaintiff drove to the entrance of defendant's multistorey car park and received a ticket from a machine after putting his money in it. This ticket referred to certain conditions of issue which could be found inside the car park. The plaintiff proceeded into the car park and while there, suffered personal injury due to the defendant's fault. However, the defendant denied liability because of the terms of the conditions of issue displayed on a pillar inside the car park arguing these terms formed part of its contract with the plaintiff. The Court of Appeal found that the terms did not form part of the contract and, therefore, did not protect the defendant. The Court held that a customer is bound by such terms as long as they are sufficiently brought to his or her notice at the time the contract is entered into, but not otherwise. In this case the terms came to the plaintiff's attention after he had bought his ticket and after he was inside the car park. To rely on contractual terms like this therefore requires them to be posted outside a venue before any contact is entered into, or on a web page before an on-line ticket is purchased, perhaps with a "click here to acknowledge you understand the risks" button.

However, like risk warnings, Section 5J does not apply if it is established any harm concerned resulted from:

  • Contravention of a written law for the protection of personal safety (some mentioned above).
  • An act done or omission made with reckless disregard for the consequences of the act or omission.

Note also though that exemption and disclaimer clauses are governed by consumer laws such as the Competition and Consumer Act 2010 (Cth).

Further note that "recreational services" in Section 5J are services supplied to a person for the purposes of, in connection with or incidental to the pursuit by the person of a recreational activity.

Under Section 5N, in determining liability for damages for harm caused by the fault of a person, the person who suffers harm is presumed to have been aware of the risk if it was an "obvious risk", unless the person proves on the balance of probabilities that he or she was not aware of the risk.

For the purpose of Section 5N, a person is aware of a risk if the person is aware of the type or kind of risk, even if not aware of the precise nature, extent or manner of occurrence of the risk.

An obvious risk might include for example, at an event near a large open body of water, falling in that body of water.

Under Section 5O, a person does not owe a duty of care to another person to warn of an obvious risk.

Section 5O does not apply if the person has specifically requested advice or information about the risk or there is a requirement under a written law to warn of the risk.

Under Section 5P, a person is also not liable for harm caused by the fault of that person suffered by another person if the harm is the result of the occurrence of something that cannot be avoided by the exercise of reasonable skill and care.

Contributory negligence

If someone has been negligent, but the person claiming has also been negligent or partly to blame for their predicament, then the law recognises the fact that it is only fair to apportion blame. 5

Under Section 5K the principles applicable in determining if a person is liable for harm caused by the fault of the person, also apply in determining whether the person who suffered harm has been contributorily negligent in failing to take precautions against the risk of that harm. For that purpose, the standard of care required of the person who suffered harm is that of a reasonable person in the position of that person and the matter is to be determined on the basis of what that person knew or ought to have known at the time.

Further, when it is established that a person who is seeking damages was intoxicated (alcohol or drugs) at the time of the act or omission that caused the harm, it is to be presumed that the person was contributorily negligent unless the plaintiff establishes, on the balance of probabilities, that the intoxication did not contribute in any way to the cause of the harm. This defence does not apply in a case where the Court is satisfied that the intoxication was not self-induced.

Public function provisions

The Act also specifically refers to risks generated in the exercise of public function.

Under Section 5W, the following principles apply in determining whether a public body or officer has a duty of care or has breached a duty of care:

  • the functions required to be exercised by the public body or officer are limited by the financial and other resources that are reasonably available to the public body or officer for the purpose of exercising those functions;
  • the general allocation of those resources by the public body or officer is not open to challenge;
  • the functions required to be exercised by the public body or officer are to be determined by reference to the broad range of its activities (and not merely by reference to the matter to which the proceedings relate); and
  • the public body or officer may rely on evidence of its compliance with general procedures and applicable standards for the exercise of its functions as evidence of the proper exercise of its functions in the matter to which the proceedings relate.

By way of an example, in Collins v Clarence Valley Council6, the appellant, who was a participant in a charity bike ride, was injured when she was flung over a wooden rickety bridge after the front wheel of her bicycle became stuck in the gaps between the wooden planks. The appellant was a 65 year old doctor and she suffered fairly serious injuries. She lost at first instance, the Court holding that the risk of injury to a cyclist if their wheels became stuck in the gaps between the planks and the holes in degraded planks on the bridge was an "obvious risk" within the meaning of the NSW Civil Liability Act 2002 (in similar terms to the WA Act) so the Council did not owe the appellant a duty of care to warn of that risk by the erection of a warning sign. Further, remedial work to the bridge, that the appellant alleged the Council failed to take in breach of its duty of care to her, did not constitute precautions a reasonable person in the Council's position would have taken. She also lost her case on appeal to the Court of Appeal.

This update only scratches the surface of this issue as it has not covered wider risks caused by matters such as industrial and workers' compensation legislation, the tort of nuisance, working with children legislation, occupiers' liability and volunteers protection legislation, contractual issues and the emergence of new risks created by technology, for example, on-line advertising of events and the on-line ticket sales and social media issues, all of which are equally important risks for consideration.

Footnotes

1 [1932] UKHL 100

2 [1980] HCA 12

3 [2004] NSWCA 145

4 [1971] 2 QB 163

5 Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947

6 [2015] NSWCA 263

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Stephen Williams
 
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