No Contracting out of Liability for Motor Vehicle Accidents
In 2012, the B.C. Court of Appeal’s decision in Loychuk v Cougar Mountain Adventures,  BCCA 122 confirmed that people who knowingly and voluntarily engage in inherently risky recreational activities will be precluded from suing a commercial operator where they signed a release waiving claims in negligence. Such releases were held to be neither unconscionable, nor against public policy.
In Niedermeyer v Charlton,  BCCA 165, the B.C. Court of Appeal provided further clarification on the effect of such releases. A majority of the Court held that vehicle owners/operators cannot contract out of liability for damages for personal injuries suffered in a motor vehicle accident.
In Niedermeyer the Plaintiff participated in a zip lining activity operated by the Defendant, Ziptrek Ecotours Inc. (“Ziptrek”). Ziptrek also operated a bus, which brought participants to and from the activity. The Plaintiff was injured while returning from the activity area when the bus left the road, overturned, and fell down a hill. She had signed a waiver that released Ziptrek from liability for both the zip line activity and transportation to and from the activity. All three judges agreed that the release was valid and not unconscionable. However, the Court was divided on the issue of whether the release was contrary to public policy to the extent that it released the Defendant from liability for transportation to and from the site of the zip line activity.
Of particular importance in the decision was B.C.’s statutory vehicle insurance scheme, collectively found in the Insurance Corporation Act, RSBC 1996, c 228, the Insurance (Vehicle) Act, RSBC 1996, c 231, the Insurance (Vehicle) Act, Regulations, B.C. Reg 447/83, and the Motor Vehicle Act, RSBC 1996, c 318. The scheme combines no-fault insurance benefits with those that require a claimant to first establish liability before ICBC will indemnify an insured motorist for the injuries suffered by the claimant. Allowing owners/operators to contract out of liability would preclude a claimant from the latter category of benefits.
The statutory scheme does not explicitly prohibit or permit an owner or driver to contract out of liability. However, the majority found that the scheme taken as a whole showed that there was a compelling public policy interest at stake - namely, to provide a universal, compulsory insurance program in an effort to ensure safety on the roads and access to compensation to people who suffer when those measures fail.
In addition to contravening public policy, the majority held that allowing vehicle owners/operators to contract out of liability would be against the principles of statutory interpretation. It found that reading the words of the statutory scheme in their context, harmoniously with the whole of the scheme and the purpose of it, supported the view that the legislature did not intend to allow vehicle owner/operators to have the ability to exclude the operation of otherwise universal compulsory insurance.
In a strongly worded dissent, Hinkson J. (now Chief Justice of the Supreme Court of B.C.) acknowledged that the Insurance (Vehicle) Act provided for universal compulsory vehicle insurance, but held that it did not prohibit drivers and passengers from contracting out of the scheme between themselves. He reasoned that had the legislature intended that the scheme could not be contracted out of then it would have expressly stated as such in the Insurance Vehicle Act. Hinkson J. also noted that the Plaintiff was still eligible for no-fault benefits. He held that these benefits were consistent with public policy in B.C. and were not inconsistent with the ability of commercial operators to contract out of liability for transportation that was part and parcel of the inherently risky activity offered. In the result, the Court allowed the Plaintiff’s appeal and remitted the case to the Supreme Court to assess her injuries.
It seems odd that commercial operators who offer zip lining, bungee jumping, horseback racing, or base jumping can contract out of negligence for these inherently risky activities but not for driving participants to and from the activity areas. As Hinkson J. noted in his dissent, the only cases where parties have not been allowed to contract out of statutory rights despite no prohibition against contracting out are cases of human rights violations. The majority of the Court of Appeal seems to have elevated the status of the public policy interest behind B.C.’s statutory vehicle insurance scheme. Indeed, Madam Justice Garson held that “the ICBC regime is intended as a benefit for the public interest just as is human rights legislation” (para 114). Justice Hinkson’s dissent provides for a possible appeal to the Supreme Court of Canada or the foundation for Courts in the future to overturn the decision. For now, however, commercial operators should beware that any releases containing waivers of liability will most likely be found unenforceable to the extent that they purport to release liability for motor vehicle accidents.