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Trade Practices Amendment (Liability for Recreational Services) Act 2002

At common law there is nothing to stop a person from contracting out of their potential liability in negligence when providing services to the public. However Section 74 of the Trade Practices Act 1974 ('TPA') implies a term into every contract between a 'corporation' and a 'consumer' for the supply of services, that the services will be rendered with due care and skill, and any materials supplied in connection with them will be fit for their purpose. A corporation is prevented from contracting out of this obligation by Section 68 of the TPA.

The Trade Practices Amendment (Liability for Recreational Services) Act 2002 ('TPA Amendment') came into effect on 19 December 2002. This Act introduces Section 68B that permits a corporation supplying recreational services to exclude, restrict or modify the application of Section 74. The exclusion, restriction or modification is limited to liability for death or personal injury. 'Recreational Services' are defined by the TPA Amendment as consisting of 'participation in:

• A sporting activity or similar leisure time pursuit; or
• Any other activity that:
• Involves a significant degree of physical exertion or physical risk; and
• Is undertaken for the purposes of recreation, enjoyment or leisure."

The effect of 68B is that where, for example, you have a corporation (or incorporated association) operating a gymnasium involved in the supply of gymnasium equipment and exercise classes to the public, that entity can contract out of its liability for injuries suffered by persons because of the negligent formulation or supervision of an exercise regime, or the state of the exercise equipment. The limitation of liability is limited to injury arising out of the recreational activities. It would not for example extend to injury caused by a dangerous premises.

The TPA Amendment does not affect a consumer's right to pursue other avenues of relief, for example unconscionable conduct (Section 51AB TPA), misleading or deceptive conduct (section 52 TPA), and the right to pursue the manufacturer of defective equipment (Sections 75AD and 75AE TPA).

It is incumbent on the recreational service provider to draw the waiver of rights to the attention of the consumer prior to the agreement being entered into. The TPA Amendment does not proscribe how the notice is to be given. Suffice to say it is up to those supplying the recreational services to clearly draw to the attention of the consumer the extent of the modification, or exclusion, of liability.

The Queensland Civil Liability Act 2003

On 3 April 2003, the Queensland Parliament passed the Civil Liability Act 2003 ('the Act'). The Act incorporates many of the Ipp Committee's recommendations.

The Act is taken to have commenced on 2 December 2002 and contains specific provisions relating to 'dangerous recreational activities'. Section 19 of the Act says that a person is not liable in negligence for personal injury suffered from an 'obvious risk' associated with a 'dangerous recreational activity' engaged in by the person suffering the harm. The section applies whether or not the person suffering harm was aware of the risk.

The Act defines a 'dangerous recreational activity' as 'an activity engaged in for enjoyment, relaxation or leisure that involves a significant degree of risk of physical harm to a person' eg. horse riding. An 'obvious risk' to a person who suffers harm is a risk that would have been obvious to a reasonable person in the circumstances eg. falling off the horse if it breaks into a gallop, but not falling off because the saddle is inadequately fastened.

Consequently there is no need for the supplier of a dangerous recreational activity to contract out of its potential exposure for injuries suffered by persons from obvious risks. There is no avenue of redress in negligence or contract for persons who suffer an injury in these circumstances.

The activities covered by the Act are much narrower than those covered by the TPA Amendment. This is intentional. The Ipp Committee recognised that the TPA Amendment could cover activities that do not involve any significant degree of physical risk. They thought that a narrower definition of 'dangerous recreational activity' was appropriate so as to include only activities involving significant risks of physical harm because these activities are the sort that people often participate in, partly for the enjoyment to be derived from risk taking.

For further information on this topic, please contact, Robert Samut.