Canada: Ontario Court Of Appeal Confirms Corporate Sponsors Owed No Duty To Injured Sports Participant

Last Updated: April 24 2013
Article by Peter Pliszka and Andrew M. Baerg

On April 5, 2013 the Ontario Court of Appeal upheld a Motion Court decision that had dismissed a lawsuit against Rogers Communications Inc. ("Rogers"),  Umbro Inc. ("Umbro") and Bank of Montreal ("BMO") for disclosing no cause of action.  This decision confirmed that, as corporate sponsors of the Ontario Soccer Association ("OSA"), Rogers, Umbro and BMO did not have a legal duty to the Plaintiff-soccer player to ensure that OSA had acquired an "adequate" amount of accident insurance for him.  Peter Pliszka and Andrew Baerg of Fasken Martineau successfully represented Rogers and Umbro on the motion and the appeal.

This decision is an important precedent not only for the many corporations that, as good corporate citizens, choose to provide sponsorship funding to a wide range of charitable and recreational organizations and events across Canada, but also for those charitable and recreational organizations that benefit from those corporate sponsorships.

This case arose from an accident which occurred during an indoor soccer match involving the plaintiff.  The Plaintiff was a member of OSA.  Rogers, Umbro and BMO were corporate sponsors of OSA.  They provided funds or soccer apparel to OSA, and OSA permitted them to advertise at OSA events.  Theses sponsors had no involvement in the operation of OSA or any of its soccer matches.

The Plaintiff suffered a spinal cord injury during an OSA indoor soccer match.  OSA had obtained a policy of  accident insurance for its members.  The maximum amount payable under that policy was $40,000.   The Plaintiff alleged that this amount of accident insurance benefits was inadequate.  The Plaintiff sued OSA in negligence and breach of contract.  However, the Plaintiff also sued the corporate sponsors.  In his Statement of Claim, the Plaintiff alleged that the corporate sponsors owed a duty of care to him to make inquiries of OSA about the amount of accident insurance that OSA had obtained for its players, and to take steps to ensure that the amount of insurance was "adequate".

The corporate sponsors brought a preliminary motion to the Court asking the Court to dismiss this action on the basis that it did not raise a reasonable cause of action against the sponsors.

On behalf of Rogers and Umbro, Faskens asserted the position that a legal duty of care of the type pleaded by the Plaintiff against the sponsors was unprecedented, and there was no legitimate basis, in terms of law or policy, to recognize such a duty.   The motion judge and the Court of Appeal found, as the first step of the analysis,  that no Canadian court had ever previously recognized a duty of care on the part of a corporate sponsor being owed to an individual participant of an event where the sponsor had played no organizational role in the event;  similarly, no such duty was recognized by the courts of other major common law jurisdictions - the United Kingdom, the United States and Australia.  

As the next step of the analysis, the motion judge and the Court of Appeal agreed with Faskens' submissions that the legal test for identifying  new  relationships that may give rise to a legal duty of care, as prescribed by the Supreme Court of Canada, was not  met in this case.  In brief, the motion judge and the Court of Appeal found that , on the facts pleaded in the Statement of Claim, there was insufficient "proximity" between the corporate sponsors and the individual plaintiff to give rise to a legal duty of care owed by the sponsors to the plaintiff.

Further, Faskens' submitted to the motion judge and the Court of Appeal several policy reasons that militated against imposing a duty of care upon a corporate sponsor in the circumstances as pled in the Statement of Claim.  From a practical  perspective, imposing  this type of duty upon corporate sponsors would be unduly onerous and impractical, as corporate sponsors typically do not have sufficient information or ability to conduct the type of risk assessment for determining what amount of insurance for what types of risks would be appropriate in connection with any of a wide range of events and activities which they may be sponsoring.   The imposition of such a duty and its consequent potential for legal exposure to the corporation would foreseeably lead to "sponsor chill", as many corporations might become reluctant  to provide sponsorship funding to various charitable and recreational organizations and events, to the detriment of society as a whole.  Further, the Court of Appeal agreed that there is  no necessity to impose such a duty upon the corporate sponsors, for there is no gap to be filled since the members of sponsored organizations already have direct legal recourse against the organizations themselves, such as OSA in this case.

Peter Pliszka, a senior partner in the Toronto office of Fasken Martineau's litigation group, and Andrew Baerg, an associate in the litigation group, acted on behalf of Rogers and Umbro in both the original motion and the appeal.

www.fasken.com

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