By Heidi Bruce and Andrew Jankovic

Gone are the days that adrenaline fuelled ‘dangerous’ activities are reserved for daredevils like Evel Knievel. Taking on physical challenges or testing one’s courage has become a popular recreational activity and is becoming increasingly commercialised by many businesses today. People now have the opportunity to jump out of a plane, climb that cliff face, paddle down rapids and drive fast cars, although of course it doesn’t come without risks. A supplier of recreational activities, and especially those activities which involve ‘high’ risk will always look to waive their liability for any personal injuries which may be suffered by a participant. However, it is not always a given that a liability waiver will be effective and so it is worth making sure your waiver stacks up well against the legislative requirements in Australia and for each State/Territory. Often these experiences can be “given away” or arranged by a promoter as part of a trade promotion or event. In that case, will the promoter be liable for the fault or negligence of the recreational activity supplier?

Australian Consumer Law

Generally, the relevant liabilities that suppliers of a recreational activity will need to consider are under two areas of law: (i) Australian Consumer Law (ACL); and (ii) Civil Liability Acts in each State/Territory (i.e. negligence and duty of care owed to customers).

The ACL contains guarantees that apply in the sale of any consumer goods or services in Australia, commonly known as ‘Consumer Guarantees’. Under the Consumer Guarantees a supplier of services must ensure that the services are provided (i) with due care and skill; (ii) fit for the intended purpose; and (iii) delivered within a reasonable time. The general rule is these Consumer Guarantees cannot be avoided. However, the ACL contains specific provisions to help in this area (S.139A) that allow recreational service providers to waive their liability in respect of any injury or death that may occur during the recreational activity.

A supplier of a recreational activity may ask a participant to agree that the consumer guarantee to provide the services with due care and skill under the ACL does not apply. Although, in order to properly limit the ACL, specific wording will need to be presented and agreed to by the participant of the recreational activity. The permission and required wording to effectively waive one’s liability under S.139A of the ACL is outlined in each of the State’s/Territory’s respective Fair Trading Acts and Civil Liability Acts. However, it is important to note that excluding consumer guarantees will not negate the duty of care owed to a participant. Specifically S.139A states that the exclusion, restriction or modification would not apply to any significant personal injury suffered by a person that is caused by the “reckless conduct” of the supplier of the recreational activity.

Negligence & Risk Warnings

Negligence is a failure to take reasonable care to avoid causing injury or loss to a person. Someone can be negligent due to their actions, or failure to act, which causes injury or loss to a person to whom they owed a duty of care.

A recreational activity provider may be able to limit their duty of care and liability for any physical injury or death an individual may suffer from participating in the recreational activity (for example via liability waiver). The Civil Liability Acts in each State/Territory are unique with respect to how a recreational activity provider would limit their liability, so there are variations depending on the location of the activity. However in general it will come down to whether the recreational activity is an ‘obvious risk’ or whether the provider has given ‘reasonable’ warning (in the prescribed form) of the risks involved in the activity. Cases show that it is difficult to convince a court that a risk was so obvious that it did not require a warning. Therefore it has become common practice for recreational activity providers to clearly communicate warnings and risks to an individual prior to participation in an activity.

• For instance in NSW: Under the Civil Liability Act 2002 (NSW), there is no proactive duty to warn another person of an ‘obvious risk’. There is no liability for injury caused by an inherent risk. However if a ‘risk warning’ is given, there is no duty of care owed in respect of the disclosed risk attached to the recreational activity.
• VIC: Under the Wrongs Act 1958 (VIC), there is no liability for injury caused by an ‘inherent or obvious’ risk as the person is presumed to have been aware of the risk of harm. Under Section 22 of the Australian Consumer and Fair Trading Act 2012 (VIC), an organiser of a recreational activity can exclude, restrict or modify liability for any injury suffered by a participant, as long as the waiver is in the prescribed form and notice of the risks are properly communicated.

It should be noted that risk warnings or ‘obvious risks’ will not effectively exclude all liability with respect to the operation, maintenance, preparation, training of staff, state of equipment or other sensible precautions necessary to provide recreational activities that are dangerous or involve risk.

Dangerous or ‘Risky’ Promotional Prizes.

The above talks about liabilities of a direct provider of recreational activities. What about  a third party who has arranged the opportunity to take part in the recreational activity? This scenario could be typically found in trade promotions where the promoter is advertising the chance to win an ‘adrenaline fuelled’ or ‘extreme’ prize, or calling individuals to take part in a particular activity for marketing purposes. In this case, every situation will be unique and generally the relevant liability will be based on how involved and how much control a particular entity has over the particular recreational activity. Conducting a trade promotion would likely satisfy the definition of providing ‘services in trade or commerce’ under the ACL, and therefore the trade promotion will need to be conducted with ‘due care and skill’. Furthermore, it may be determined that there exists a duty of care over entrants that take part in a recreational activity as part of the promotion (prizes included), although again the extent of the duty of care will generally be limited to what is in the promoter’s control. If for example, the promoter has done their due diligence by selecting a recreational activity that is offered by a professional business which satisfies all necessary licences, training and qualifications, then it could be said that the promotion has been run with ‘due care and skill’ and that the necessary duty of care has been adequately exercised. Traditionally, in order for an act of ‘negligence’ to be satisfied, it will need to be proven that the accused party has actually caused the harm suffered by the plaintiff, also known as the ‘but for’ test. If the promoter is merely awarding the recreational activity as a prize and has acted responsibly in selecting the provider of the prize, it is very unlikely it can be proven that the promoter is responsible for any accidents, faults or errors should they occur during the recreational activity. Although, if the promoter has sent an entrant on a bungee jump with an uncertified business that has untrained staff and faulty equipment, and if an accident should occur, then the balance of liability will likely swing back to the promoter.

It will still be important to consider appropriate releases as part of your promotional terms and conditions and to check they are drafted properly. The above principle is not only limited to recreational activities, and can be applied to a broad range of third party goods and services that are awarded or made available to an entrant in a promotion.