Guest Speaker Series
Managing The Risks
by James A MacLeod, FIIC, CRM


A Presentation On:
Liability and the Risk Management Process

Litigious Society:
There are several reasons for the societal trend towards more litigation and increasing involvement of the courts in related injuries. Whatever the reasons,he results are real and increasing.

Increased Participation:
More disposable income leading to more time being spent on leisure activities.

  • A general increase in the numbers participating in leisure activities.
  • Younger and older patrons using recreational facilities.
  • Increasing Awareness of the benefits of healthy life style.
The Aging of Baby Boomers:
  • Same urge to participate
  • Decreasing vision
  • Decreasing flexibility
  • High expectations
  • High earning years.
Changing Attitudes:
  • "Someone else is responsible for my injury" has replaced a previous willingness to accept the risk of injury
  • Society has higher expectations for the designers, installers and maintainers of facilities
  • The monetary setback is not a matter that needs to be solved by the individual but is a responsibility of a third party
Increased Number & of Activities:
  • New facilities being built with new and varied equipment and apparatus.
  • An increase in the number of high risk activities (skateboarding, climbing walls, trails).
Influence of Media:
  • Extreme games, mountain biking, skateboarding, ice climbing
  • Reporting of legal liability settlements (Walkerton)
  • TV shows discussing legal issues and the rights of the public (Marketplace, W5)
Influence of American Experience:
  • Canada is 5 -10 years behind the USA
  • Common Law can draw from the USA for precedence
  • Tourism from the USAis increasing.
Increased Awareness of Liability & Legal Rights:
  • The Canadian Charter Of Rights
  • Occupiers Liability Act
  • Building & Fire Codes
  • People participating in activities at recreational & gym facilities have built in expectations of safe conduct and equipment. Accidents are viewed as breaches of these expectations.
More Lawyers /Increased Access to Legal Aid:
  • Innovative methods of accepting liability suits are being explored by lawyers (Smoking gun documents on the internet, lawsuit kits,easy financing)
  • Legal Aid has meant that legal advice is available to those who in the past could not afford it.
Increased Number & Amounts of Settlements:
  • More participation has led to more accidents and injuries which has led to more legal action.
  • Individuals are increasingly looking to the courts to solve the issue - greed is a motivating force.
Deep Pockets & Presence of Insurance:
  • Governments, Municipalities, buildings owners and insurance companies are viewed as having deep pockets.
  • The plaintiff may receive some compensation even if they are in the wrong.
Impact of Increased Litigation:
    Negative:
    • Increased liability insurance costs
    • Program cancellation
    • Increased cost of protective equipment
    • Increased legal activity
    Positive:
    • Improved standard of care
    • Increased awareness
    • Increased importance of Risk Management
Types of Liability:
    Legal Liability:
      "Legal liability infers a responsibility or obligation between parties which the courts recognize and enforce."
    Contractual Liability:
    • Employment contracts (labor law)
    • Construction, installation contracts
    • Rental contracts
    • Service and product contracts
    Criminal Liability:
    • Crimes of violence that might take place on facility property (robbery, rape)
    • Misdemeanors such as theft, disorderly conduct
    Human Rights Liability:
    • Gender, Age, Race, Provisions of opportunity for persons with disabilities.
    Tort Liability:
    • Duty owed
    • Injury to person,property or reputation
    • All who had anything to do with the situation likely to be sued.
    Negligence:
      "An unintentional harm or act caused by a failure to meet the standard of care"
Elements of Negligence:
  • The defendant owed a duty of care to the plaintiff,
  • The defendant breached that duty of care,
  • Injury or damage did occur,
  • The breach was the proximate cause of the injury.
Breach of Duty or Standard of Care:
  • Reasonable person test (a special standard of care exists for children and seniors)
  • Professional Standards:pool safety equipment, maintenance of recreational/gym equipment
  • Supervision and Instruction:dependent on the age, degree of danger
  • Equipment and facilities:age,maintenance, safety inspections
Damage or Actual Harm:
  • Medical Expenses
  • Loss of income
  • Cost of extended care
  • Pain & suffering
  • Physical Impairment
  • Damage or loss to property
Proximate Cause:
  • Direct linkage between the injury and a negligent act.
  • Usually the linkage of the act to injury is straight forward.
Who Is Liable?
  • The plaintiff will attempt to sue everyone in the organization and if equipment is responsible the manufacturer of the equipment.
  • Vicarious Liability
  • Personal Liability
  • Product Liability
  • Occupiers Liability
Risk Management Process:
  • Identify the exposures
  • Examine feasible alternative risk management techniques
  • Select the best combination of alternative risk management techniques
  • Implement the chosen techniques
  • Monitor the results to ensure the program is effective.
Alternative Techniques:
    Risk Control:
    • Avoidance
    • Loss Prevention
    • Loss Reduction
    • Segregation of Exposures
    • Contractual Transfer
    Risk Financing:
    • Retention
    • Transfer
Risk Control:
  • Risk Control may be defined as any conscious action (or decision not to act) intended to reduce the frequency, severity or unpredictably of accidental losses.
    Three Major Requirements:
    • Risk control focuses on actual harm,not on amounts of monies paid
    • The impact of any given risk control technique can only be measured from the perspective of a given entity
    • A given risk control measure is risk control with respect to one or more specific exposures.


The topic was presented by:
James A MacLeod,FIIC,CRM
Branch Manager
Insurers' Advisory Organization Inc.
A subsidiary of Underwriters Adjustment Bureau Ltd.
840 Howe Street,Suite 400,Box 39
Vancouver,BC V6Z 2M7



First published March 2002
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