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January 2015

Online Waivers

Cloud-based liability protection is the wave of the future.

Written by Peter Oliver | 0 comment

In the ski industry in particular, and the recreation industry in general, stuff happens. Customers fall, slip, run into things, get run into, and otherwise become injured. When that stuff happens, a ski area needs to be legally protected.

Traditionally, legal protection has come in two forms, usually in tandem: 1) a signed liability waiver seeking to shield the ski area and other parties from claims by the injured, and 2) an acknowledgement of risk, often incorporated within a liability waiver and printed on lift tickets. This second item is often codified in state ski/ride statutes, which spell out the inherent risks in winter sports.

While the acknowledgement of inherent risk is relatively established in the courts, the enforceability of liability waivers varies from state to state. Courts in Vermont, for example, have historically given waivers little weight in injury claims. And many lawyers will tell you that waivers matter little; they are generally not considered protection against reckless or willful negligence, the basis for most claims. Nevertheless, they do offer some protection, and presumably a deterrent to the filing of frivolous suits.

Paper waivers, however, represent a bookkeeping nightmare. On a busy day at a major ski resort, thousands of transactions—equipment rentals, pass sales, event registration, ski-school lessons, etc.—may take place in which a waiver is required. All that paper piles up. No doubt there are ski areas around the country with closets, rooms, even buildings full of stored paper waivers in preparation for the possibility that a lawsuit might be filed.

Benefits of Click-Through Waivers
This being the electronic age, however, there is an alternative—online or digital “click-through” waivers. While paper waivers often require rummaging through thousands of pages of paper to find a single document that might apply in a claim, an online waiver system can vastly expedite the data-retrieval process.

This is the province of companies such as 1Risk, which company owner and founder Charles Mickley calls “a risk management and data solution company for the adventure industry.” Online liability-protection, he says, “has been making leaps and bounds in the last two years with cloud-based solutions.” Mickley points to one client, a para-sail operator, with 60,000 on-line waivers, available at any time to be recalled, printed or exported. That would represent an unwieldy mountain of paper waivers.

“In the next five years, a majority of waivers will be going this way,” Mickley predicts. And the digital methodology, he says, has the added benefit of saving money—by reducing paper costs, labor costs in sorting and managing documents, and storage space. “There’s nothing worse than someone having to paw through 5,000 paper releases and trying to recognize signatures,” agrees Brian Johnson, a founding partner of the law firm Nilan, Johnson and Lewis, who has worked on ski-industry cases for 30 years.

In addition, waivers are only a part of the trove of searchable data regarding a company’s client base. If you want to review and analyze a variety of details about your guests, from demographics to purchasing behavior, cloud-based data storage is an efficient way to go.

Do They Hold Up in Court?
But if digital waivers are logistically convenient, the more important question is: Are they legally enforceable? Do digital waivers stand up in court?

Tom Aicher, a Vermont lawyer with considerable experience in ski-industry issues, says that “the business world (for a long time) has adopted online contracting and check-through as equaling signature.” If you have purchased anything online from, say, Amazon, you know what Aicher is talking about.

While the legal world might be moving in that direction, Aicher repeats the words “state by state” almost like a mantra regarding the legality of waivers in general, and digital waivers in particular. Every state, he says, has “a little bit different narrative in what is required.” In general, however, waivers can be “an extremely valuable defense in sports-injury cases,” he says.

Mari-Jo Zweig, a lawyer who has been involved in risk/injury law for more than 20 years for the Colorado-based Rietz law firm, says, “I am not aware of any court decision that says the click-through process was not valid.”

Nevertheless, care must be taking in setting up the digital-waiver process to assure it has legal validity.

For starters, Zweig and Aicher agree that any waiver click-through must precede payment. And the waiver process must be structured so that the click-through/payment sequence is provable in court. The language of any waiver, including the assumption-of-risk language, must cover the standards of whatever state in which it applies.

There are technical considerations as well—reasons why contracting a firm like 1Risk rather than attempting to set up the process in-house might make sense. A waiver process must be compatible with a variety of software platforms, iOS and Android in particular. And given online security breaches that have been in the news, careful encryption is essential to protect against identity theft.

But back to legal matters. Zweig says that digital waivers “have become more the norm than paper.”

Johnson recently represented a ski area in a Minnesota case that upheld the click-through-process. In a promotion it dubbed Fill-a-Quad, Wild Mountain ski area offered an online season-pass discount to skiers who could assemble a foursome. In the case before the court, a skier had clicked through on behalf of four Fill-a-Quad participants, after which one of the participants (the plaintiff) had become seriously injured.

The appeals court ruled in favor of the ski area for a variety of reasons, but two sentences in the decision are noteworthy in regard to online waivers. First: “The district court concluded that Wild Mountain’s exculpatory clause is enforceable because it is unambiguous and bars only ordinary-negligence claims.” And second: “The contractual relationship between Lee [the plaintiff] and Wild Mountain was formed when the online season-pass agreement was executed.”

One key point: The plaintiff in the case had not personally clicked through the online waiver. Nor did the plaintiff’s friend, acting on behalf of him and the other Fill-a-Quad participants, have any formal legal relationship with the others, as guardian or assigned proxy, for example. Still, the plaintiff was deemed to have agreed to a valid contract.

The State-by-State Caveat
It’s important to recognize, as Aicher would quickly add, that such decisions are made on a state-by-state basis. But it does give at least some guidance as to how broadly courts are coming to accept online agreements.

That helps explain why legal professionals agree that online contracts and waivers are the way of the future, and that there’s little doubt they are considered in court to be legally enforceable.

There are a few caveats. First, the language of any waiver must conform to the standards required by the jurisdiction in which it is executed. Second, the waiver and/or assumption-of-risk agreement must be set up with the click-through preceding payment. Third, online or cloud-based data security should be, as Mickley puts it, “the highest issue.”

Still, the future is rapidly arriving. When stuff happens, ski areas can confidently turn to the cloud for legal protection and document storage, and record- keepers can breathe a sigh of relief.