Don’t give up on commercial waivers

Properly constructed and worded waivers will be upheld in court, with one commercial and insurance lawyer strongly recommending their continued use.

“There are policies and procedures and ways to draft agreements where I promise you the waivers will be upheld,” said Ian Gold, a founding partner of Thomas Gold Pettingill LLP. “There’s a way to do it, and a way to do it properly, and the courts have given us lots of guidance to have those waivers upheld. Please don’t give up on waivers.”

Gold was speaking last week at the Ontario Insurance Adjusters Association’s 2019 Claims Conference in Toronto.

He discussed several important insurance cases, one of which was Hosseinkhani v. QK Fitness, released Jan. 3, 2019. In that case, the court did not uphold the waiver signed by Fatemeh Hosseinkhani when she joined the gym.

Ultimately, however, the Ontario Superior Court of Justice found in favour of the gym, not because of the signed waiver that was on the membership form, but because it found that the gym had not breached its duty of care.

“The waiver was on the back page of the application form,” Gold said during the session, Casualty Update–A Year in Review. “The form was signed, but at the end of the day, the court did not uphold the waiver. It’s just that the way this waiver was done, the court didn’t think it should be held against her.”

For instance, the waiver was in exactly the same font as all the other fonts on the membership form. There was no warning on the front page like, “Please turn over,” nor was there a highlighted area or spot for someone to initial beside the waiver paragraph. Despite the ruling, Gold said, “I beg you, or your clients or insureds, not to give up on the concept of waivers and signage.”

On Aug. 8, 2014, then 59-year-old Hosseinkhani participated in an exercise class operated by QK Fitness. She put down a round dumbbell, but was injured when she tripped and fell on the dumbbell that she says rolled. The court ultimately ruled that occupiers do not have to warn an adult about “obvious risks.”

In another case discussed during the conference, Scharr v. Blue Mountain Resorts, the court upheld the use of waivers. The Ontario Court of Appeal ruling, released Mar. 28, 2018, found that recreational businesses and municipalities can continue to use waivers to protect themselves from liability in activities that have inherent risk, so long as the waivers are properly worded and there are proper procedures in place for the signing of the waivers.

The case involves two injuries on ski hills, one involving an extensive waiver; another with a ski pass with a waiver written on it. “The resorts in both cases relied on the fact there were these waivers in place and therefore the plaintiffs should be barred from bringing those actions,” Gold said.

The case revolved around which of two conflicting statutes, the Occupier’s Liability Act or Sale of Goods Act, should apply. The appeal court ruled the Occupier’s Liability Act was valid and the waivers could stand (the Sale of Goods Act says you cannot have a waiver to get out of liability).

The case has been appealed to the Supreme Court of Canada, but Gold said he is not convinced the top court will weigh in on this issue.

“If the Supreme Court of Canada makes what I think to be the wrong decision and says the Sale of Goods Act applies, and you can’t rely on waivers, I’m not sure what will happen in a world of recreational sports and activities,” Gold said.

“Currently under the case law, waivers are alive and well and I would recommend continuing to use them. We promote the use of them. There has to be a process, the wording has to be correct, but the courts are upholding these waivers in lots of scenarios.”