Authored for and Published in CICMA March 2019 Newsletter.
Your child has been invited to her best friend’s birthday party at Charlie’s Pizza Palace.
You drop her off at the party. Before you can leave to enjoy the next two hours of freedom, the clerk at Charlie’s hands you a piece of paper and says, “sign here”. Of course, it’s a Release of Liability Waiver, whereby in exchange for allowing your exuberant child to play with her friends in the arcade, or enjoy one of Charlie’s famous pizza rolls, you agree to absolve Charlie’s (and his employees, family members, friends, enemies, and anyone in Canada named Charlie) from liability if your child gets hurt.
Do you sign?
If no, will your child ever speak to you again after you and she are escorted off the property?
If yes, and she gets hurt, can she sue Charlie’s?
Waivers and Liability Release Clauses
Let’s take a step back and discuss these Waiversappearing every time you try to do an activity with an operator/occupier, from skydiving, to laser tag, to arts & crafts.
The general rule on Waivers in Canada is that they are valid and effective if the language of the exclusion refers to the circumstances of the accident and, in the case of negligence, the language excludes liability for risks or injuries caused by negligence. Furthermore, the operator must take reasonable steps to bring the exclusion or Waiver to the attention of the participant so that its effect is understood. Where the evidence confirms that an adult knowingly signs a form that completely absolves the operator or his or her agents, the exclusion will be effective.
In theOntario Superior Court of Justice case of Isildar v. Rideau Diving Supply, a 28-year old had a tragic accident while participating in a scuba diving activity. He drowned. His family sued the operator, who relied on a Waiver and Liability Release. Roccamo J. reviewed the jurisprudence on waivers/liability releases and summarized it as follows:
Based on case law as it has developed, a three staged analysis is required to determine whether a signed release of liability is valid. The analysis requires a consideration of the following:
Is the release valid in the sense that the plaintiff knew what he was signing? Alternatively, if the circumstances are such that a reasonable person would know that a party signing a document did not intend to agree to the liability release it contains, did the party presenting the document take reasonable steps to bring it to the attention of the signator?
What is the scope of the release and is it worded broadly enough to cover the conduct of the defendant?
Whether the waiver should not be enforced because it is unconscionable?
She held, on the facts of that case, that the release in question was valid and, accordingly, the action was dismissed.
Waivers and Children
We know that Waivers can be enforced against adults, because Waivers are contracts and adults are allowed to enter into contracts. This principle was recited in Isildar, as follows:
It is a general principle of contract law that where a party signs a document which he knows affects his legal rights, the party is bound by the document in the absence of fraud or misrepresentation, even though the party may not have read or understood the document.
But what happens if a child signs a Waiver?
My Grade 8 daughter recently brought home a permission slip from school so she could go skating with her class at a local arena. Unsurprisingly, included with the forms from school was a two-page Waiver form from the arena. The form asked us to agree to absolve the arena (and pretty much everyone who lives within 100 kilometres of it) from any and all liability if my daughter was hurt on their premises. The way the document was worded, we would be absolving them from anything and everything that could possibly happen that day, including falling on ice, getting knocked down by a Skate Patrol person, getting stabbed by skates, drowning, and falling through the black hole at Centre Ice.
My options were to sign the form and send her to school that day wearing my hockey equipment, or saying “nope, sorry”. Fearing significant backlash from my 13-year-old (who was already getting her skates ready for sharpening), I said “You sign it.” She did. And she went skating and, thankfully, returned unharmed.
Why did I tell her to sign it? Because a contract signed by 13-year-old is most likely unenforceable in these circumstances. If heaven forbid something would have happened to her, I would have challenged the arena to try and enforce the alleged contract.
This isn’t to say that we would have won.
After the skating trip, I did some research and was surprised to learn that Canadian case law on minors and Waivers doesn’t really exist. Except in British Columbia, where the Legislature put it right into their Infants Act that a contract made by a minor at the time the contract was made is unenforceable against her, except in specified circumstances that in most cases wouldn’t apply to Waivers.
There is no authority anywhere else in Canada that states that a Waiver signed by a child is unenforceable against her. But I would be surprised if a judge enforced a Waiver against a child, given the hurdle of satisfying a court that the contract was not detrimental to the child’s interest.
The other option of course is to sign a Waiver on your child’s behalf. Most smart operators/occupiers won’t allow a child to sign a Waiver. They insist the parent/guardian sign it.
Is this enforceable against the parent of child if the child is injured?
It would likely be unenforceable in British Columbia because of another provision in the Infants Actthat bars parents and guardians from entering into binding contracts on behalf of infants, except in strict accordance with the provisions of the Act.
As for elsewhere in Canada, it remains unknown if a parent/guardian can waive a minor’s rights to claim against anyone protected by a Waiver. My own opinion on this issue is that a parent/guardian cannot waive a child’s legal rights to sue an operator/occupier.
I find comfort for my (non-binding) opinion in the rules of court and jurisprudence dealing with children in litigation. Among other things, generally speaking a minor cannot bring an action without a litigation guardian (an adult). Moreover, a settlement of an infant claim needs court approval. Therefore, I find it difficult to accept that a parent/guardian would be able to sign away a child’s rights to sue (usually at a busy counter with children running and screaming nearby) to the child’s detriment but would otherwise be precluded from settling a court action to the child’s benefit without court approval.
That isn’t to say that a parent can’t sign away their own legal rights to claim for loss of care, guidance, or companionship. Whether that Waiver is enforceable against the parent would be subject to the same enforceability principles discussed above.
Do you Sign?
So, having now read about everything you were afraid to learn about Waivers, do you sign Charlie’s Pizza Palace’s Waiver? Or do you move to British Columbia?
[Insert here image of your child staring up at you with those big puppy-dog eyes]
For the purpose of this article, the term “Waiver” is used to include liability release clauses.
Under the common law, contracts which are detrimental to the interests of an infant (person under 18) are void. See for example Altobelli v. Wilson,1957 CarswellOnt 43,  O.W.N. 207, 5 R.F.L. Rep. 326.
This is my opinion for the purpose of this article and is notto be construed as legal advice. By reading these next few paragraphs, you are hereby waiving your rights to sue me or my firm for anything whatsoever. It doesn’t matter if you are a child or a parent/guardian of a child. You can’t sue us. Thank you.
Note that under section 40 of the BCInfants Act:
40. A guardian may make a binding agreement for an infant,
(a) if the agreement involves a consideration not greater than $10 000, with the consent of the Public Guardian and Trustee, or
(b) in a case other than one referred to in paragraph (a), with the approval of the court by order made on the petition of a party to the agreement.
What happens when an auto insurer sends a policy termination notice to the named insured, but the named insured does not own the vehicle insured under the policy?
In Ontario (Minister of Finance) v. Traders General Insurance Co. (c.o.b. Aviva Traders) an individual was seriously injured as a passenger in a Hyundai motor vehicle owed by Peter Leonard. Peter Leonard’s spouse, Anne Leonard, had a policy with Traders that was terminated for non-payment of premiums prior to the accident. The Hyundai had been added to the policy a couple of years prior to the accident.
To cancel Anne Leonard’s policy, Traders had sent a termination notice by registered mail. It did not send a termination notice to Peter Leonard, and appeared to have no knowledge at the time of cancellation that he owned the Hyundai insured under the policy.
The injured party made a claim to the Fund for accident benefits and the Fund subsequently commenced a priority dispute with Traders, arguing – for a number of reasons – that the policy had been improperly cancelled and remained in force at the time of the accident.
The Superior Court sided with the Fund and held that Traders did not terminate the policy properly because it had failed to send the owner of the vehicle (Peter) a termination notice. The court stressed that owners must be properly identified at policy inception and thereafter, strict compliance with the statutory cancellation requirements is necessary, and insurers must notify named insureds of attempts to cancel a policy. The court held that under statutory condition 11, Traders could not validly cancel the policy unless it gave Peter Leonard fifteen days’ notice of the cancellation. Thus, the policy was not cancelled properly and the court ordered Traders to pay the Fund the amount of its accident benefits settlement with the injured person.
The Court of Appeal agreed with the Superior Court and dismissed the appeal. Among other things, the Court of Appeal held that Traders failed to comply with Statutory Condition 11 (1), which requires the notice to be given to “the insured”. In this case, Peter was an “insured” because he was the owner of the vehicle:
The policy that the appellant purported to terminate is an owner’s policy, which is defined in s. 1 of the Insurance Act as:
A motor vehicle liability policy insuring a person in respect of the ownership, use or occupation of an automobile owned by that person and within the description or definition thereof in the policy. [Emphasis added.]
It was never an issue in this case that before the purported termination, the policy was valid insurance that insured Peter Leonard as the owner of the insured vehicle.
Therefore, because the policy at issue was valid, and because it was an owner’s policy, the “insured” under that policy was Peter Leonard, the owner of the vehicles insured by the policy.
To summarize, the only issue was whether the notice of termination had the effect of terminating that policy. The notice was only sent to Anne Leonard, who was not the insured for the 1991 Hyundai vehicle because she did not own it. Because the notice of termination was not sent to the insured, as required by statutory condition 11(1), it was not effective to terminate the policy, and the trial judge made no error in so holding.
Traders should raise alarms for insurers who might not have done their due diligence when writing owners policies for people who might not have owned the vehicle being insured. This casereinforces the principle that auto insurers are held to extremely strict compliance standards when it comes to terminating an auto policy. The courts will not endorse a purported policy termination if the insurer failed to dot its I’s and cross it’s T’s.
Readers might recall the troubling decision in Echelon General Insurance Company v. Her Majesty the Queen, wherein the Superior Court held that an improperly terminated policy remains in full force and effect (in perpetuity) until the policy is terminated properly. Of course insurers rarely, if ever, revisit policies that have they have purported to terminate until a loss occurs, meaning that these improperly terminated policies can expose insurers to paying claims on policies that have not been generating any premiums for possibly many years.
To every insurer who writes auto policies, I ask: Do you know who owns the vehicles insured under your policies?
It takes little effort to identify the international behemoth that was recently scrutinized for disclosing its users’ personal data (*cough* Facebook *cough*). As of today, many business, big and small,...
It takes little effort to identify the international behemoth that was recently scrutinized for disclosing its users’ personal data (*cough* Facebook *cough*). As of today, many business, big and small, have the potential to be vilified and fined for the same type of inadvertent disclosures. The key distinction between Facebook and other companies are their resources to deal with the fall out such a disclosure.
What does it do?
The GDPR was developed in 2016 and intended to take effect this year. The Regulation aims to protect people’s information when it is shared with businesses. It also allows people to permit or deny the distribution of personal data with third parties. The Regulation places certain disclosure requirements on entities to inform their users of a potential breach.
Although this is a European regulation, it affects businesses that operate out of a European signatory state marketing to a foreign country (i.e. Canada), or a foreign business marketing to and operating within a European signatory state. In essence, any company that seeks to advertise to an international population, which by using the Internet most companies do, they must comply with the requirements set out in the GDPR.
Failure to comply
The failure to comply with the GDPR can lead to severe consequences. One of them is a fine of up to €20 million. The GDPR also allows signatory states to implement their own regulations to ensure compliance. Another significant repercussion is the potential of lawsuits stemming from a data breach. The GDPR establishes a standard of care that business must meet. Failure to satisfy this standard, will expose business to not only fines but financially devastating legal actions.
The “big” insurance companies like Chubb, Lloyds, and Northbridge are beginning to offer comprehensive cyber insurance policies to businesses. Other new companies such as Boxx Insurance have started to exclusively offer cyber insurance policies to small and medium sized businesses.
Cyber insurance policies are designed to protect businesses when a data breach occurs, and may include coverage for fines, legal services, and PR services.
Insurance adjusters’ will soon be confronted with a significant number of claims originating from cyber policies. Adjusters must be ready to not only ensure that their clients are protected but that the insurer is not being defrauded.
Adjusters will have to undergo technical training to verify that their clients are compliant with not only the GDPR but also with the requirements of their insurance policy. It will also be imperative that adjusters identify technical “red flags” that may signal a fraudulent claim.
Striking this balance will be difficult but necessary.
Companies like Facebook can rebound from a data breach given their vast pool of resources, however, small business can go bankrupt from a single cyber-attack. As a result of this dichotomy, cyber insurance policies will continue to develop and may soon be as common as an auto insurance policy. Insurance companies and their adjusters must be prepared to understand and “speak the language” of their consumers to meet their needs and expectations.
Stas practices in insurance-related litigation. He has a broad range of experience including tort claims, accident benefits, subrogation, priority and loss transfer disputes, WSIB matters, and fraudulent claims. Read more...