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You're in it Together: Joint and Several Liability for Event Organisers, Sponsors and Venue Owners

25 March 2013

Routledge Modise

South Africa's stature as a world-class destination for large sporting events, most notably the recent Afcon Cup and the Soccer World Cup before that, is growing tremendously. Given this status, there is increasing scrutiny by regulators, noted in the recently promulgated Safety at Sports and Recreational Events Act (SASREA), to address the inadequacies which have been prevalent in many sports and entertainment events. This is according to Deon Francis of Routledge Modise Inc.

"Some of 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 driven by the fact that enforcement of punitive measures to ensure proper safety and security measures at events has been left wanting, but these days are long over. An event that is found to be lacking in proper controls and safety measures could find all involved coordinating parties from organisers, sponsors, venue operators and owners all held liable for any damages and legal claims," warns Deon.

In order to address these inadequacies the Department of Sports and Recreation, through the promulgation of the SASREA, has now placed the responsibility of ensuring safety and security at events on the shoulders of controlling bodies, event organisers and stadium/venue owners. Given the spirit of the Act, it is evident that 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 that is used in civil cases where two or more parties are found liable for damages. The injured party in such a case may seek payment of the entire judgment from any one of the parties who are 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," he explains.

Although the SASREA provides for various duties and obligations on each of the entities, in the event of a disaster occurring and injury to individuals, those injured parties may choose to 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 being available, while 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.

Dani Ettridge, of Aon South Africa, a leading insurance brokerage and risk consultants, adds that 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, be it the manufacturer, the wholesaler or the retailer. Similarly, in terms of the SASREA, in the event of individuals being injured at events, they can choose to seek recourse against any of the stakeholders in the event, be that a sponsor, a supplier or indeed an advertiser. It would then be for the parties to sort out among themselves who should be liable and to what extent. This would not affect the injured party though in that the injured party could look to any of these entities for compensation," she says.

"According to the provisions in SASREA, it is no longer viable or 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 your controlling bodies and venue/stadium owners would enjoy public liability cover while 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 each and every party involved takes out sufficient public liability to protect their own risks and not rely on the insurance policies of others," explains Dani.

The Act now demands that all parties involved, including sponsors, need to take an active role in vetting the planning of events. They can no longer associate their name with an event with no knowledge of the safety and security measures in place. Sponsors, as stakeholders in an event, can be drawn into a suit alongside the event organiser, venue owner and others. It is essential that all parties take a pro-active approach to ensuring that certain minimum standards are met around the planning and organising of any event and ensuring compliance with SASREA.

"Most crucially, sponsors should also ensure that they have adequate events liability in place with an insurer who is aware of their exposure in this regard, 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," explains Dani.

One of the major concerns coming out of the industry is that the regulatory change imposes harsh penalties, and there is a lot of uncertainty as to how this legislation will be interpreted and how the requirements can be incorporated into pre-event planning.

"Without precedent there is always the fear of being the proverbial guinea pig in a test case. It is true that 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 the benefit of their clients. To this end, it is essential to cover all your bases and make sure you have adequate liability covers in place for any eventuality. And most critically, it is imperative to provide your insurance broker with a copy of any legal contracts you have in place in terms of an event, to ensure that any provisions in your legal contract will be covered under your insurance liability cover," concludes Dani.

We've produced, with Aon, "A Practical Guide to SASREA" that provides an essential guide to any company party to an event to ensure that all their bases are properly covered. Should you require the practical guide or information around the event Liability policy, please contact:

Deon Francis - deon.francis@hoganlovells.com
Dani Ettridge of Aon South Africa on dani.ettridge@aon.co.za

The team

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