|
 The
Legal Implications of Risk Management
Steve Adelman delivered the
following remarks at the August 2007 Academy for Venue Safety & Security
Steven A. Adelman
One of the
questions people most frequently ask lawyers is, "If I do this, can I be
sued?" Of course you can! Just as you cannot completely eliminate the
risks inherent in operating a public assembly facility, nothing you do
can eliminate your risk of being sued.
So if you cannot
completely eliminate risk, how can you "manage" risk in a legally
significant way? This section explains risk management analysis from a
legal perspective. Specifically, we will discuss (1) the strong legal
incentives for preparing in advance so your venue is in the best
position to minimize injuries and deaths, and (2) the issues the lawyers
will want to address (both yours and the victims') when the inevitable
does occur.
The Natural
Laws of Risk. Anyone who thinks a disaster cannot happen to their
facility will make some lawyers very happy, because they will refuse to
prepare and then have to pay a big judgment to get out from under their
mistakes. Basic scientific principles show that sooner or later,
something bad will happen in every facility. Total prevention of risk is
impossible, and even hoping for it is unrealistic and dangerous. This is
why risk management is so important, and why the law insists that public
assembly facilities take adequate precautions to protect patrons. Put
another way, it is not a question of If, but When.
Bernoulli's
Principle. This is the sometimes known as the Law of Large Numbers.
Basically, the average number of random events tends towards the
theoretical average for that quantity. So if you invite thousands of
people to your venue several times a week all year long, where they will
leave behind many of their daily cares and inhibitions, Bernoulli's
Principle indicates that some of them will get hurt. And most of those
people will sue.
As well, the
threat of terrorist activity is greatest at soft targets such as loosely
protected public assembly facilities. And some type of natural disaster
is a realistic possibility just about everywhere. The only way to
entirely prevent safety-related lawsuits would be to close your
building. Of course, you would not be attending the Academy for Venue
Safety and Security if that were an option.
The Second Law
of Thermodynamics. This is the universal law of increasing entropy.
In scientific terms, it means that over time, differences in
temperature, pressure, and density tend to even out within a physical
system. In facility management terms, if other venues have experienced
disasters and yours has not, get ready. Your number is probably coming
up.
The Law of
Averages. This is the folk wisdom embodying the two actual
scientific principles cited above. Nearly everyone believes that
probability will influence all occurrences in the long term.
Nonetheless, only exceedingly careful people tend to act this way. In
fact, the long history of public disasters suggests that the absence of
adequate precautions is common in the wake of prolonged success. This is
because success promotes a sense of invulnerability, which in turn makes
people think they can get away with lower margins of safety. Failures,
and the resulting expensive lawsuits and bad publicity, promote greater
safety margins, and therefore new periods of safe operation.
This section, and
the entire AVSS program, is designed to force you out of the usual
success-borne complacency. Rather than wait for disaster to strike
before taking action, it is the express goal of this program, as well as
of the legal system itself, to get you to proactively address risks
before they turn into catastrophes. Failure to do so would be an
expensive and tragic lesson.
Here is how the
laws of man will analyze the respect you show for the laws of nature.
The Essential Legal Terms and How to Use Them
As you have read
in the preceding Risk Management chapters, the basic definition of risk
management is "the process of selecting and implementing countermeasures
to achieve an acceptable level of risk at an acceptable cost." That is
the language of insurers, not lawyers. When insurers speak of what is
"acceptable," they are referring to a financial determination done by
accountants and actuaries. Going one step further, military strategists
even talk openly about what might constitute an "acceptable" number of
casualties and deaths in a given scenario. The analysis your lawyer will
undertake in the hours immediately following a disaster will be
different. Your lawyer might put it this way:
In the case of any
catastrophic accident, legal liability will turn on whether a jury is
convinced, by a preponderance of the evidence (more than 50 percent),
that the venue (1) conducted a reasonable analysis of (2) the
foreseeability of the threat that occurred in this instance, (3) whether
it had reasonable safeguards to prevent the harm these victims suffered,
and (4) whether those safeguards were put to reasonable use during the
injury-producing event.
That sentence
contains every significant element of the legal analysis of a venue's
actions following an accident.
In order to
conduct this analysis, lawyers (and juries) will argue over the four
elements of negligence: duty, breach, causation, and harm. Here is a
discussion of each element in the context of public assembly facilities.
1. The Duty of Care for Patron Safety.
The threshold
question in any negligence claim brought by an injured person is whether
the party they are suing owed them a duty of care. In the context of
public assembly facilities, this is generally an easy question. Ensuring
patron safety is almost always part of a venue's legal duty.
But the law helps
those who help themselves, and penalizes people who do not take
reasonable care for their own safety. For example, there is a long line
of cases arising from people struck by foul balls at baseball games. In
nearly every instance, the stadium was found to have a duty to warn
people of the danger of foul balls and to provide seating where even
inattentive people could not get hit. (This is the reason for the
netting behind home plate.) But the law has recognized that an
unavoidable risk of sitting near the baselines is the possibility of
getting hit by a foul ball. Rather than screening all of the stands, the
law imposes a duty of care on fans sitting in those areas.
The stadium still
has many other duties of care, such as providing adequate security to
prevent a brawl as fans fight over the ball. But for the patron who
takes a foul ball off his forehead because he's checking his scorecard,
a judge may throw his claim out of court as a matter of law.
2. Breach of the Duty of Care.
Once the legal
issue of the existence of a duty of care has been resolved by the judge,
the rest of the negligence analysis is a factual determination for a
jury. Assuming that the venue did owe the injured person a duty of care,
it is virtually certain that someone involved with making the venue safe
for patrons breached that duty. After all, if there had been no breach,
then no one would have been hurt.
The question then
becomes, who breached their duty? Lawyers address this issue by looking
at each defendant's reasonableness, and at the foreseeability of the
risk that caused these particular injuries.
a. Reasonableness.
A venue need not
take every possible safety precaution, only those that are reasonable.
This is because one need not be ready to handle the absolute worst case
scenario, only the most probable scenarios. Whether someone met their
duty of care is measured by comparing their conduct with that of a
hypothetical "reasonable person under the same or similar
circumstances." In a lawsuit, the plaintiff and defendants almost always
hire experts to offer their respective opinions what that reasonable
person would do under the circumstances of the accident at issue.
b.
Foreseeability. The key to understanding whether a venue acted
reasonably is to understand what risks were reasonably foreseeable, and
whether the venue took reasonable steps to prevent the reasonably
foreseeable harm that could result from those risks.
First, a venue
must reasonably evaluate the possible risks. The most fundamental risk
assessment is the equation R = V x T x C (Risk = Vulnerability x Threat
x Consequences). Although the AVSS program teaches that this equation is
the most effective way to look at risk, in the eyes of the law it is
clear that any risk assessment is better than none at all. A ViSAT
analysis (discussed elsewhere in these materials) would satisfy this
requirement.
Second, the law
requires that once a venue has done a reasonable risk assessment, it
bears the further duty to take reasonable steps to minimize the
reasonably foreseeable consequences. If the "R" of your equation is a
big number, then the law imposes a duty to do something to reduce it.
You must not only think through the possible risks to patron safety, you
must then use that information reasonably. Because "reasonableness" is a
function of the time and place a jury is asked to determine it, this can
be a complicated analysis, which can have important social implications.
Here are a few examples.
Generally, threats
can be divided into "acts of man" and "acts of nature." Acts of man such
as terrorism are random by definition. The terrorist attacks of
September 11, 2001, the subsequent rail attacks in Madrid and London,
and even the shootings at Virginia Tech in April, 2007 make it far less
reasonable to do nothing to protect against even relatively unlikely
events if the venue knows, or reasonably should know, that there would
be catastrophic consequences if such an attack were carried out.
Acts of nature can
be charted from past events, and are therefore reasonably foreseeable.
But Hurricane Katrina may have changed the duty to foresee and address
the possible the consequences of natural disasters. People now realize
that there were options that could have either strengthened the dams in
the years before 2005, and/or improved the emergency response mechanisms
to respond to a flood disaster, which almost anyone could have foreseen
in a city that is mostly below sea level. Media coverage of the
multi-system failures has likely made the public much less receptive to
claims that disastrous consequences were unforeseeable.
3. Proximate Cause.
The venue's
liability will largely turn on whether its actions, or inactions, were a
proximate cause of some percentage of the injured parties' damages.
While the venue is doing this analysis, so should be the event promoter,
producer, security provider, and even the talent. For performances in
any public assembly facility, everyone is a deep pocket with plenty of
insurance. With so much money available, everyone gets sued, and the
victim sorts out liability over the course of the lawsuit.
There is no magic
formula for determining when someone's actions are a proximate cause of
an injury. Jurors evaluate every case on its own facts. This makes it
almost impossible for lawyers to definitively say whose fault caused the
injuries. On the other hand, the absence of a bright line rule
encourages all parties to compromise.
Most lawsuits
settle precisely because people tend to be risk-averse, and everyone has
some risk of losing. (Despite periodic complaints in the media about
"frivolous lawsuits," the longstanding trend is that more than 90% of all cases settle before a trial begins, and many of the
remaining cases settle before the jury returns a verdict. Trials get
headlines, but few civil lawsuits actually go to trial anymore.)
It is no
exaggeration to say that everyone involved in injury cases has some risk
of losing. This even includes the victim. In many instances, an inviting
defense strategy may include alleging that the victim caused his own
harm. (The legal terms are that the victim "assumed the risk" or was
"comparatively at fault," depending on the law of the state in which the
harm occurred.)
Sometimes this
works, but blaming the victim can backfire. For example, if an underage
drinker gets hurt at an event, it is tempting to blame him for drinking.
Even a modestly competent plaintiff's lawyer, however, will follow the
money from alcohol sales back to the venue, promoter, or producer,
showing the profit motive in selling to even underage drinkers. The
proliferation of beer and liquor advertising at concerts and sporting
events, and the obvious risk of intoxication at many public events,
makes it almost malpractice for plaintiffs' lawyers not to show that
drunken patrons were reasonably foreseeable to the venue. Moreover, the
victim may be more sympathetic than a defendant whose last name is
Incorporated.
The trick is to
accurately predict how a jury will sort out the liability of all the
parties involved in putting on an event. Having a lawyer who knows the
roles of the respective litigants, and who understands who does what at
your venue, is an essential step in identifying the proximate cause of
the harm.
4. Harm. In
a legal sense, harm is the damage the plaintiff suffered at the venue.
Without someone having gotten hurt, or some property getting damaged,
there would be no lawsuit. So this element of a negligence claim can be
assumed (although the amount of harm and its dollar value is often hotly
contested).
From the venue's
internal standpoint, there will be other costs, primarily arising from
the need to address the problem so it does not recur. Also, any claim on
an insurance policy is likely to have a ripple effect for years after
the other damages have long been paid. Except in truly catastrophic
incidents, these latter two costs for the venue may exceed the actual
payout to the victim.
When Lawyers Darken Your Door
Hopefully, you are
doing your R = V x T x C analysis before you have experienced a
catastrophic loss. The process of assessing and reducing your venue's
vulnerabilities is not only good risk management, it also will tend to
reduce the likelihood of a tragedy in the first place.
Nonetheless, even
the best prepared facilities will have problems sooner or later. At that
time, lawyers will demand all kinds of paper, from official documents to
informal correspondence, and they will ask questions you may prefer not
to answer under penalties of perjury.
For these reasons,
thorough risk management planning should include your own lawyer.
Ideally, this person will be knowledgeable enough about your venue and
its exposure to help with disaster response planning. Also, your key
operational people should have your lawyer's phone number on speed dial
so that in an emergency, the lawyer can mobilize their own legal rapid
response team to get ahead of problems before they cascade out of
control. At the very least, having a lawyer involved in bringing order
from chaos can establish the attorney-client privilege, a potentially
important protection for your emergency decision-making process.
Whatever you think
of lawyers in general or your venue's lawyer in particular, the odds are
strongly in favor of you needing one at some point in your career. You
simply cannot eliminate risk - you can only hope to manage it.. |
