RISK MANAGEMENT: A DIFFERENT PERSPECTIVE
by Catherine Hansen-Stamp, Esq.

Recreational activities, from skiing and whitewater rafting to mountain climbing and mountain biking, involve inherent and other risks that provide challenges and excitement, enticing individuals to participate. The inherently risky nature of recreational activities, our litigious society, and individuals' frequent failure to accept responsibility for themselves are all factors which have made overall risk management practices critical to the viability of any recreational business.

Risk management for recreation providers spans all aspects of a business: hiring and training employees; structuring and following emergency protocols; drafting brochures, releases and similar documents; and a host of other things. Unfortunately, thinking about risk management in one's business can be a difficult and unattractive proposition for any recreation enthusiast. One can be overcome with the doom and gloom of potential injury and death and believe that the only purpose of risk management is to avoid liability. Surely the excitement lies in providing the adventure experience, teaching the outdoor skill, or observing learning through adventure-based experiential education, right? Yes, of course. Importantly though, let's think again. Isn't it also true that excitement and fulfillment can flow from running a professional and ethical operation?

Instead of approaching risk management "running scared" and addressing those issues simply to attempt to avoid a lawsuit or minimize liability, think about running a professional operation. If this is your primary goal in addressing risk management, your whole attitude and approach is different. Running a professional operation includes fundamental fairness to participants and the education and edification of your staff, while engaging in appropriate risk management practices. If you address risk management from this perspective, you certainly may minimize or reduce actual injuries or accidents, the occurrence of claims or lawsuits, or your ultimate liability. However, you've done so in a positive way, providing a quality service while effectively reducing your liability exposure.

What is Risk Management?
Let's begin by examining the term "risk management." What risks are we talking about and for whom are we managing them? Viewed broadly, there are really two types of risks. The first type includes those risks or hazards present in recreational activities: falling rock, changing weather, guide error­--the who, what, where, and how. These risks can lead to injury, death, or loss to participants. The second type is the risk of loss (monetary of otherwise) to a provider's operation, resulting from a participant's injury, death or loss. By examining disclosure of information, documentation, equipment use and maintenance and other issues, one can attempt to manage these various risks. However, if risk management is viewed simply as a means to minimize the provider's potential loss, the picture is incomplete. If one approaches risk management with an eye toward running a professional operation, risks are truly being managed not just for the provider's operation, but also for the participant. This approach results in a "win-win" situation for everyone. Taking this approach, let's focus on a couple of specific risk management pieces to illustrate how this works.

Information Exchange
I define the "information exchange" as that critical information flowing from provider to participant and from participant to provider. For providers, the exchange of information is influenced by an ongoing tension between 1) marketing services to the public, 2) legal protection, and 3) effective registration of participants. A provider imparts information to participants through brochures, phone calls, releases or other written documents, pre-trip talks and the like. This is oftentimes referred to as disclosure. A participant imparts information to the provider through applications, medical information forms, phone calls, pre-trip talks and the like. This is oftentimes referred to as screening. This mutual exchange is a critical aspect of any risk management program. A provider can direct this information exchange with the goal of running a professional operation and prioritizing both the provider's and participants' risk management interests.

To illustrate this approach, imagine "Mountainmecca" (see note #1 at end of article) offers hiking and rock climbing activities in the mountains to individuals who span a variety of ages and ability levels.

A. Information Exchange: Disclosure

1. Brochures and Videos
Mountainmecca would like to distribute a brochure and video of its program. The brochure and video can impart information about the nature of the hiking and rock climbing activities; e.g., where those activities take place, if special experience is required, weather and terrain details, equipment provided, and course or program structure. Mountainmecca wants to market the activities, and can thus describe and depict that the activities are fun, exciting and educational. The materials can also include information about the risks of the activities and the possibility of injury, damage or loss. Pictures and footage can show travel in remote terrain and in uncomfortable weather conditions. Another shot can depict a backcountry injury/rescue and some other less pleasant aspects of the activities. At the same time, Mountainmecca can include photos of a group reaching a summit, a successful belay, and other enjoyable aspects of the program. The materials can relay that individuals choosing to participate have responsibilities and will assume the risks of participating in the activities.

This approach allows Mountain-mecca to provide information to participants, so that they can make voluntary choices about whether to participate, given the nature of the activities. They receive a dual message: the activity is exciting and enjoyable, but importantly, they have responsibilities as participants. Participants also understand and appreciate, up front, some of the dangers and risks of participation. Mountainmecca can market its services effectively, while simultaneously relaying a realistic picture about the dangers and risks associated with its recreational activities.

2. Releases, Assumptions of Risk and Similar Documents (see note#2 at end of article).
Mountainmecca can utilize a written document, signed by the participant, which can, among other things, identify risks involved in participating in Mountainmecca's hiking and climbing activities, and seek to either avoid or allocate liability for damage, injury or death. Documents can also identify liability already allocated by law. These written documents can provide participants with a variety of information which will allow them to further understand the nature of the activity and its attendant risks, so that they can make informed choices about whether to participate. Such documents will also assist participants in understanding their own responsibilities and liability. Lastly, it allows a provider to attempt to allocate or transfer liability to the participant for certain injuries or losses.

A comprehensive review of these types of documents is beyond the scope of this article, but common elements can include:

a. Description of Risks and Participant's Assumption of Risks:
Common law (that derived from legal cases) provides that participants may not recover from providers for injuries that result from the inherent risks of recreational activities. In other words, the provider has no duty to protect the participant from those risks, and has no liability for injuries resulting from those inherent risks. Many states have codified the "inherent risk" doctrine in legislation which spans a broad variety of recreational activities. Inherent risks fall into two general categories: 1) those risks which are essential characteristics of a recreational activity and those which participants desire to confront: e.g. moguls, steep grades, exciting whitewater; and 2) those undesirable risks which exist and which cannot be controlled, e.g., falling rock or sudden, severe weather changes.

In light of applicable state statutes and common law, participants generally do not need to be informed about specific inherent risks in order to be held responsible for injuries resulting from those risks. However, including a written description of inherent risks and a provision outlining a participant's responsibility and assumption of those risks relays accurate and important information to the participant. In addition to listing inherent risks, providers can include a list of other risks in the document. This serves to broadly inform the participant of the risks, inherent or otherwise, associated with the particular activity. Should applicable laws or the provider's written document fail to assist in obtaining dismissal of a claim, a participant's assumption of risks can be reviewed by a court or jury in determining participant's legal contributory fault. This contributory fault can decrease or possibly eliminate the provider's liability.

b. Participant Release and Agreement to Indemnify:
Release language refers to that portion of a document wherein the provider allocates the responsibility for provider's negligence to the participant. In other words, the language basically excuses the provider from liability for injuries or death resulting from a provider's or their employees' ordinary negligence (negligence meaning generally, a failure to exercise ordinary or reasonable care). This is sometimes referred to as an exculpatory clause. In most jurisdictions, a written document is not effective to transfer a provider's liability for gross negligence or reckless or intentional misconduct. (A participant's agreement to indemnify is an agreement to reimburse the provider, by payment or otherwise, for any claims brought against the provider relating to the participant's participation.) The majority of states, pursuant to case law, do recognize the validity of releases excusing providers from liability for their own ordinary negligence, in the recreational context. In many states, courts will strictly review these documents because of their intent to shift liability for provider negligence to the participant.

Some providers are reluctant to include a release for their own negligence in these types of written documents. They are proud of their operation and do not want to be relieved of the responsibility to exercise ordinary care. Others may be restricted by federal policies requiring those operating under a permit on federal lands to utilize a "Visitor's Acknowledgment of Risk" form, if they choose to use a form at all3. In any event, it is important to note that in litigation, courts and legal counsel frequently urge there is a gray area between "inherent risks" and "provider negligence." Utilizing a written document which includes a release for provider negligence may discourage disputes over this issue and, possibly, the filing of frivolous claims. Despite the use of a release, providers may choose to compensate or settle with injured parties who they believe may have truly meritorious claims.

Instead of viewing a written document as just a "release," "indemnification" or "assumption of risk" intended to avoid or limit liability, the document can, more comprehensively, be viewed as a vehicle which provides participants with information concerning the activity, and the risks associated with the activity. Participants can then make a choice about their decision to participate. If participants choose to participate, they do so with knowledge of the risks involved and with the understanding that they will be responsible for injuries or death resulting from such risks. They will also be responsible for injuries or death resulting from providers' ordinary negligence, if that is also included in the document.

For providers, the presence of a signed document may deter participants from making a claim in the first instance. If a lawsuit is filed, the written document may bring you a summary dismissal of the case prior to trial. If that effort is unsuccessful, the document may serve as evidence in trial that the participant was warned of the risks prior to engaging in the activity, assumed those risks, and thus is partially or wholly responsible for the resulting injury or damage.

B. Information Exchange: Screening
Screening concerns the flow of information from participant to provider. Mountainmecca can use applications, medical screening forms, phone calls and other means to obtain critical information about participants, and to provide additional detail about the rigors and challenges of the hiking and climbing activities provided. Information sought can include: participant's physical abilities4, health, specific fears or concerns, expectations and experience level. Obtaining this type of information can assist Mountainmecca in understanding the needs of the participant and in addressing any special concerns, medical or otherwise, which might affect the participant or co-participants5. It may provide an opportunity to mutually determine that a particular trip is not appropriate for a participant. The participant, too, has a chance to communicate and explain his or her individual concerns or needs. Mountainmecca is obtaining the information not just to potentially avoid a lawsuit, but to assist the participant in sharing information so that he or she is better prepared for the experience. In addition, it allows the participant another opportunity to make an informed choice about whether or not to participate in the recreational activities.

Conclusion

Looking at "information exchange" issues illustrates the importance of viewing risk management while standing in your shoes, as well as those of your guests. A focus on running a professional operation allows you to use risk management tools with an eye towards fundamental fairness to participants, rather than simply your own legal protection. Exchanging important and accurate information offers you the opportunity to build rapport with your participants and allows them to see that you run a professional operation. Informed participants are aware of the risks and the potential for injury and are more likely prepared to handle a critical incident. Further, certain accidents are less likely to occur with a well run program and informed participants. Importantly, participants who witness a provider's attention to detail and professional operation, both before and after an incident, may be less apt to file a claim.

Taking this two-pronged approach to risk management should allow you to feel good about this aspect of your business. Instead of prefacing a pre-trip talk with "we need to tell you this because we're afraid you may sue," you can say "we care about our guests and so believe it important to inform you about the risks of participating in these activities." In the end, you'll have a more positive attitude about risk management issues. You'll also be far ahead in decreasing the potential for accidents. If accidents occur, you've likely minimized the chance of resulting claims or lawsuits and possibly limited your ultimate liability.

1 "Mountainmecca" is a fictitious entity; the name is provided for illustrative purposes only.

2 I have highlighted a few basic elements of these types of written documents. Many other elements are typically present, and are discussed at length in the Outdoor Recreation Coalition of America (ORCA) publication: Developing Releases and Related Documents: Guidelines for Recreation Providers, Outdoor Programs, Outfitters & Guides, written by Catherine Hansen-Stamp, Charles R. Gregg, Betty van der Smissen, James Moss and Al Hornsby. This document is available through the ORCA office in Boulder, Colorado and on the Outdoor Network's Web site in the Wilderness Law section of The Outdoor SourceNet.

3 Id., see the ORCA document for a synopsis of these federal policies.

4 Note that providers should understand the application of the Americans with Disabilities Act (ADA), and its potential to: 1) limit or proscribe inquiries concerning physical capabilities and ability to participate, and; 2) require accommodation for certain individuals with disabilities. See related article in this issue.

5 Id.