Ask A Maritime Attorney: Should my yacht club be including a liability waiver?

Question:

 I am on the race management committee for my yacht club and our committee is concerned about exposure of the club and its volunteers to liability during races and other events.  We have considered asking participants to sign a waiver but some of our members have questioned whether that kind of waiver would be enforceable.  Other members contend that all participants in a sport such as yacht racing automatically assume the risk of injury, and to complicate things even further, we have learned that the Racing Rules of Sailing prohibit the use of liability waivers in race documents.  Can you provide some guidance?

 

Answer

Our reader is basically asking whether his yacht club should include a liability release in its race documents.  The short answer is yes.  The question of whether that release will be frowned upon by the sailing community is a lot more complicated, as is the question of whether the release will be enforceable.

Let’s start with our reader’s reference to competitors automatically assuming the risk of injury through their participation in the event.  The “Assumption of Risk” doctrine provides a defense against a lawsuit where the injured party knowingly participated in a dangerous activity, and was injured in a way that he or she could have reasonably foreseen.  Assumption of Risk cases usually arise in the context of an employment or sporting activity, where the nature of the activity may give rise to certain obvious risks.  For example, under this doctrine a lion tamer who is employed by a circus may not be able to sue the circus if he gets bit by a lion.

Notably, the application of this doctrine under “General” (Federal) Maritime Law will differ from a case decided under California State Law.  An incident arising during a yacht race will in most circumstances be subject to Maritime Law rather than California State Law.   Simply put, in most cases the doctrine is not a defense against a claim brought by an injured person in a case subject to maritime law.  We will need to save that discussion for another day, but the “take-away” here is that a race organizer will need to look elsewhere for protection against claims arising during a yacht race.  This is where a written liability release may help race organizers to limit their liability.

Courts have consistently upheld written liability waivers in a recreational maritime context, so long as the language of the waiver is clear, unambiguous and prominently positioned on the document.  Courts have distinguished this defense from the Assumption of Risk doctrine because the waiver is a form of contract which can be freely accepted or rejected by the participants on both sides of the equation before anyone leaves the dock.

An unambiguous and properly worded liability waiver or release will go a long way toward easing the concerns of our reader and his fellow committee members, but he questions whether such a document is enforceable.  In fact, it is enforceable if it is carefully drafted.

A liability release is a type of contract, whereby the participant in the activity agrees to give up certain rights in exchange for something of value.  The “something of value,” or “consideration,” may take many forms, but it must be clearly stated in the document.  In practice, the “something of value” is usually stated simply as granting the individual the opportunity to participate in the event.  This may sound like an insufficient form of consideration to receive in exchange for giving up your right to sue, but in fact the actual value of the items exchanged in a contract will not be questioned by a court.

Many liability waivers or release documents also include language which requires the participant to “indemnify” the race organizers against claims arising from the event.  An indemnification agreement goes beyond a simple release or waiver of liability, in that it also requires the participant to defend the race organizers against claims brought by third parties.  This seems a bit onerous at first, but it is often necessary to bring crewmembers under the liability release umbrella since they don’t usually sign the race entry form.  A carefully worded indemnification clause that is narrowly tailored to meet this objective will not expose competitors to claims brought by unrelated third parties.  And, it is consistent with the traditional maritime principle of holding a captain responsible for whatever happens aboard his or her vessel.

Our reader points out that U.S. Sailing does not encourage the use of indemnification clauses in race documents.  U.S. Sailing is a Rhode Island based organization that is the national governing body for the sport of sailing in this country.  Their responsibilities include the enactment of rules (“prescriptions”) to supplement the international Racing Rules of Sailing for events conducted in the United States.  U.S. Sailing prescriptions include Rule 81 (formerly Rule 82), which discourages the use of indemnification or liability release agreements by race organizers, and their website includes a section where they describe liability release documents in very scary terms.  In my opinion, their description is inaccurate, and both the Racing Rules of Sailing and the U.S. Prescriptions allow race organizers to waive the prohibition against the use indemnification language in these documents.  It should be noted that the mission of U.S. Sailing is to protect the interests of racers – not race organizers.

Before closing, we should take a quick look at the actual language of a liability release.  When a party in any endeavor seeks to reduce or eliminate its liability for injury or damage in that endeavor, the party faces a complicated maze of rules and restrictions.  This puzzle is considerably more complicated when that endeavor takes place on the water.  Written liability waivers require specific language that may not be available through a “copy and paste” exercise from a random document found on the internet, and failure to use the correct language will render the document ineffective.  In fact, we have reviewed race documents from 15 different yacht clubs around the country, and found the liability release language in at least two-thirds of those documents to be ineffective and unenforceable.  Most of the deficiencies in those documents could be cured by the simple addition of the contract language discussed above.  But they – and our reader – should contact an experienced maritime attorney for help with their particular activity.

David Weil is licensed to practice law in the state of California and as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.

 David Weil is the managing attorney at Weil & Associates (www.weilmaritime.com) in Seal Beach. He is certified as a Specialist in Admiralty and Maritime Law by the State Bar of California Board of Legal Specialization and a “Proctor in Admiralty” Member of the Maritime Law Association of the United States, an adjunct professor of Admiralty Law, and former legal counsel to the California Yacht Brokers Association. If you have a maritime law question for Weil, he can be contacted at 562-799-5508, through his website at www.weilmaritime.com,  or via email at dweil@weilmaritime.com.