Joint and Several Liability for Events Organisers, Sponsors, Venue and Owners
07 August 2013Routledge Modise
By Deon Francis of Routledge Modise Inc and Dani Ettridge of Aon South Africa
There is increasing scrutiny by regulators, noted in the recently promulgated Safety at Sports and Recreational Events Act (SASREA), to address the inadequacies that have been prevalent in many sports and entertainment events locally.
These inadequacies include insufficient emergency and essential services, insufficient resources being made available by local authorities, inadequate public liability insurance, a lack of proper safety certification and structural engineering certificates for temporary structures, a lack of proper safety and security measures including crowd control at events. Much of the flouting of these requirements has been because of the lack of the enforcement of punitive measures ... but these days are long over. An event lacking in proper controls and safety measures could find all coordinating parties - organisers, sponsors, venue operators and owners - held liable for any damages and legal claims.
The Department of Sports and Recreation, through the promulgation of the SASREA, has passed the responsibility of ensuring safety and security at events onto the controlling bodies, event organisers and stadium/venue owners. These entities will be jointly and severally liable in the event of any civil liability arising at any given event.
Joint and several liability is a form of liability used in civil cases where two or more parties are found liable for damages. The injured party may seek payment of the entire judgement from any one of the parties said to be jointly and severally liable. In other words, if any of the defendants do not have enough money or assets to pay an equal share of the award, the other defendants must make up the difference.
Although the SASREA provides for various duties and obligations on each of the entities, in the event of a disaster and injury to individuals, those injured parties may sue any of the entities as reflected in section 4 of the SASREA, whether or not there was fault on the part of that party. For instance, if an injury has occurred as a result of insufficient barricading, whilst that may be the venue owner's obligation, the injured may choose to hold the controlling body or the event organiser liable.
Those parties cannot deny responsibility on the basis that the barricading was the responsibility of the venue owner, as the SASREA has placed a burden on all the entities to ensure safety and responsibility at events. SASREA has serious implications in terms of insurance liability cover.
SASREA has a very similar effect as the Consumer Protection Act. In terms of the CPA, where damages arise as a result of defective products, consumers can seek recourse against any one of the parties in the supply chain: manufacturer, wholesaler or retailer. Similarly, in terms of the SASREA, should individuals be injured at events, they may seek recourse against any of the stakeholders in the event: sponsor, supplier or advertiser. The parties would then sort out among themselves who should be liable and to what extent. This would not affect the injured party, who could look to any of these entities for compensation.
According SASREA provisions, it is no longer sufficient for only controlling bodies, event organisers and stadium/venue owners to have public liability cover. While the SASREA does make public liability insurance cover mandatory, in practice, usually only controlling bodies and venue/stadium owners would enjoy public liability cover, whilst the other parties would, in most instances, either not have public liability insurance or be indemnified by those who do have such cover. However, such indemnity clauses are now unlikely to be enforceable against third parties. It is imperative that every party involved takes out sufficient public liability to protect their own risks and not rely on the insurance policies of others.
Parties involved can no longer associate their name with an event with no knowledge of the safety and security measures. Sponsors, as stakeholders in an event, can be drawn into a suit alongside the event organiser, venue owner and others. All parties must take a pro-active approach to ensuring that certain minimum standards are met in the organising of any event and ensuring compliance with SASREA.
Most crucially, sponsors must ensure they have adequate events liability with an insurer aware of their exposure, and not rely on a standard business public liability policy. Each stakeholder must ensure protection by way of a policy in their own name and not rely on cover arranged for the other parties.
Regulatory change imposes harsh penalties, and there is much uncertainty regarding interpretation of this legislation and how the requirements can be incorporated into pre event planning.
The majority of event organisers and meeting planners welcome the opportunity to add a professional approach to their business and to raise industry standards to benefit their clients. To this end, it is essential to ensure adequate liability covers for any eventuality. Most critically, clients must provide their insurance broker with a copy of any legal contracts in place in terms of an event, to ensure that any provisions in the legal contract will be covered under their insurance liability cover.