The Shaky Protection of COVID Liability Waivers

As Canadian businesses begin to reopen amidst the COVID-19 pandemic, summer camps, recreational sports teams, and universities have started to require a waiver of liability for contracting COVID-19, a “COVID liability waiver,” before using their services.

Content of COVID-19 Liability Waivers

Generally, the waivers we have reviewed follow a simple structure:

  1. A recognition of the risks involved by using the service
    • Vary from contracting and transmitting COVID to risks of treatment
    • Includes a wide range of symptoms, from nasal congestion to death
  2. The business’s prevention measures
    • Varies from simply undertaking to take “reasonable steps” to prevent transmission, to detailing how the business will clean their property and provide personal protective equipment for employees
  3. Requested prevention measures by participant
    • Varies from following “government-recommended prevention measures” to detailing exactly how the participant must wash their hands and follow social distancing guidelines
  4. Waiver of liability
    • Usually written as broadly as possible, including all claims (even negligence, gross negligence, breach of contract, etc.) arising from contracting COVID-19 (or just general disease) at or associated with their business.

Consumers, and especially students, feel like they don’t have a choice but to sign these waivers and the question is; are these types of COVID-19 liability waivers enforceable?

Enforceability of COVID-19 Liability Waivers

The answer to this question is complex and very fact specific. When analysing whether the waiver is enforceable, the courts follow the decision of Tercon Contractors Ltd v British Columbia (Transportation and Highways) (2010 SCC 4) in which the court asks three questions to determine the enforceability of a limitation or exclusion of liability clause:

  1. As a matter of interpretation, does the clause apply to the circumstances?
    • A clause excluding liability for slips and falls would not be interpreted to apply to excluding liability for
      COVID-19 contraction or transmission.
  2. Was the clause unconscionable at the time of contract formation?
    • The courts use unconscionability, an equitable doctrine, to set aside unfair agreements resulting from an inequality of bargaining power. In Uber Technologies Inc v Heller (2020 SCC 16), the Supreme Court of Canada stated that unconscionability requires (1) an inequality of bargaining power and (2) a resulting improvident bargain.
    • In this step, the courts consider the entire context of the waiver, including an availability of alternative choices for the student or customer, ability for the student or customer to negotiate, the amount of explanation a business offers about the waiver, and any other circumstances that could influence either party to sign the waiver.
    • In cases where a parent is signing a waiver on behalf of a child, the courts will be hesitant to enforce the waiver as the child did not make the choice to sign themselves.
  3. Is there an overriding public policy reason to refuse enforcement that outweighs the public interest in the enforcement of contracts?
    • If the courts determine that enforcing the clause limits access to justice and rule of law (e.g., up holding the clause will restrict the weaker party from reaching a fair outcome), the courts may refuse to enforce the clause despite how much business efficacy in Canada depends on contract certainty and enforceability.

If the COVID-19 liability waiver is not upheld, then what happens?

If a court goes through the long process of determining that the COVID-19 waiver of liability does not apply to the case before the court, they must still assess the claim before them. In the case of COVID-19 contraction and transmission, the court will likely assess whether the business or school acted negligently so as not to protect their customers or students as a reasonable business would.

COVID-19 liability waivers are growing in popularity as Canadian businesses and schools reopen and they could act as a deterrent if a customer or student is considering making a claim. Ultimately, the question of whether courts will enforce them will be fact specific. If these COVID-19 liability waivers are challenged, the court will determine if the waiver was intended to apply in the circumstances, if the waiver was unconscionable in the context when it was signed, and if public policy reasons are strong enough to justify not enforcing the waiver. If the waiver is not upheld, consumers and students will likely still struggle to successfully claim that a company’s negligence or breach of contract lead to one specific person’s COVID-19 case.

 

Please note that this is a rapidly changing and evolving situation, and that this information is based on our best knowledge at the current time. Due to the unique circumstances of every business, not all information is applicable to all employers, so please feel free to contact us with any questions or if we can be of assistance in any way.

Also, we note that this information is current as of July 21, 2020 and will be subject to change following this date.

For more information, please contact those listed below

Kerry Lynn Okita, Lauren Pearson and Hannah Schmakeit