Ontario government pushes for limits on waivers of liability

Waivers intended to reduce liability risk for sports and recreation companies should not protect those companies from lawsuits under the Consumer Protection Act, the Ontario government contends.

In a ruling released March 28, the Court of Appeal for Ontario overturned two earlier court rulings that essentially said waivers can be unenforceable when defendants are sued under the province’s Consumer Protection Act – even if those same waivers are also enforceable under the same circumstances under the Occupiers’ Liability Act.

The province’s ministry of government and consumer services ministry had intervener status in the case, indexed as Schnarr v. Blue Mountain Resorts Limited.

Customers should be able to sue under the Consumer Protection Act “despite the presence of waivers prohibiting such litigation,” lawyers for the Ministry of Government and Consumer Services argued in their factum.

In 2010, David Schnarr bought a season ski pass from Blue Mountain Resorts’s website. On Mar. 26, 2011, while skiing on a trail called the “Smart Alec,” Schnarr got hurt after hitting a piece of debris and striking a tree.

He agreed to a waiver but sued anyway. Essentially he argued that the waiver did not apply to a lawsuit under the Consumer Protection Act. That law gives consumers the right to sue vendors if the products are of poor quality, and also stipulates that consumers cannot contract out of their right to sue.

The Ministry of Government and Consumer Services agrees, but as it stands, the court has ruled the opposite. In the March 28 ruling, Justice Ian Nordheimer of the Court of Appeal for Ontario said it would be “absurd” to let defendants use waivers to defend themselves from negligence lawsuits under the Occupiers’ Liability Act, but to prevent the same waivers from applying under the same circumstances when the lawsuits are simply filed under the Consumer Protection Act.

Initially Schnarr’s lawsuit was “framed as a tort claim” under the Occupiers’ Liability Act, but in 2016 he also alleged Blue Mountain breached its warranty under the Consumer Protection Act.

Schnarr had argued the court should “differentiate between occupiers who own land, and who require the protection from liability for guests and trespassers who might cross onto their lands, and occupiers who sell a service and take on the additional character of a supplier of services.”

Originally, Justice Ria Tzimas of the Superior Court of Justice ruled that although Schnarr could not sue Blue Mountain for tort under the Occupiers’ Liability Act, he could sue for breach of contract under the Consumer Protection Act.

“Suppliers often impose terms unilaterally on consumers in consumer agreements,” the Ministry of Government and Consumer Services wrote in its factum. “If waivers of CPA rights are allowed in these cases, it is likely that other suppliers would require other consumers to waive their CPA rights. A likely consequence is that the CPA would not have the effect the legislature intended.”

The March 28 Court of Appeal for Ontario ruling is “great news” for insurers of sports and recreations clients such as ski resorts, paintball, and dirt biking, a lawyer for Blue Mountain told Canadian Underwriter earlier.