What to consider when using electronic waivers of liability

Waivers of liability do not necessarily have to be in paper form, but they are not a substitute for having a good risk management program in place, says one lawyer who has defended waivers in court.

The question of whether you can enforce waivers in electronic form “has never really been litigated in Canada but there have been discussions,” said John Olah, lawyer and partner with Beard Winter LLP, who has extensive experience advising and defending Ontario ski resorts.

“I don’t think there is any question [that] electronic waivers [are enforceable] as long as they are properly drafted and executed,” said Olah. Waivers are also only one part of a broader risk management program and must be customized for that particular client’s situation. Your client can’t simply copy and paste someone else’s waiver and expect it to apply in that client’s situation, he warned in an interview with Canadian Underwriter.

“The problem of course — because these documents are being read on a variety of different devices they have to be amenable to each device,” said Olah, commenting on electronic documents in general and not on any particular product.

MotorsportReg, a unit of Michigan-based insurance provider Hagerty Motorsports, is now offering electronic waivers in the Canadian market. Its product, SpeedWaiver.com, lets participants in motorsports sign liability waivers digitally.

A system like this could potentially be used for activities other than motorsports, said Brian Ghidinelli, managing director of Hagerty Motorsports, in a recent interview.

A related company, Hagerty Canada LLC policies, places insurance for classic cars in Canada, underwritten by a subsidiary of Aviva Canada.

Electronic waivers are simpler than paper waivers and also lend themselves to the social distancing precautions prevalent with the COVID-19 pandemic, said Hagerty Motorsports.

In the case of Speedwaiver.com, a motorsports organizer can send a link or text message to a potential participant, who can then open the waiver on their smartphone and read it. At the same time, the user has to take their own picture so it can later be confirmed it was that person who signed it.

“That process gives you a credential that you can show at the gate to prove you signed a waiver,” said Ghidinelli.

“Electronically, you have different hurdles to clear than with a paper agreement. Fundamentally, though, national laws in the United States and Canada set the ground for what is an electronic signature.”

Whether it is a motorsport track, ski hill, skydiving or any other potentially hazardous situation, a waiver must warn people the they are going into a potentially risky situation, said Olah, commenting on waivers in general. “There must be reasonable notice given to the patron. Without that, the waiver fails.”

With a ski resort, for example, the customer might buy a paper ticket, which contains the warning, and then attach the ticket to their jacket. The resort might also have large signs warning patrons of resorts.

“The ski industry has taken particular pains to make sure the signs and ticket notices are colour- coded to make sure the warnings stand out,” said Olah. The warnings would not only tell patrons of the risk but also there is a waiver that affects their legal rights, which they must read carefully.

A person applying for a season’s pass might have to sign their initials at key segments of the waiver so they cannot claim later on that they did not see it or read it. In the case of an electronic waiver, a commercial entity could retain electronic evidence that a patron went through and read key portions of it, said Olah.

Electronic waivers may also lend themselves better to archiving. In one of Olah’s cases, a sports facility had been shut down and he had to go through boxes in the owner’s barn trying to locate one particular paper waiver.