Legislature(1999 - 2000)
04/19/1999 01:15 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 146 - LIABILITY FOR COMMERCIAL REC ACTIVITIES
CHAIRMAN KOTT announced the next order of business is HB 146, "An
Act relating to civil liability for commercial recreational
activities; and providing for an effective date."
CHAIRMAN KOTT indicated that CSHB 146(L&C) [1-LS0701\D] is before
the committee and called on Ms. Kelly Sullivan to present the
sponsor statement.
Number 0618
KELLY SULLIVAN, Legislative Secretary for Representative Pete Kott,
Alaska State Legislature, came before the committee and presented
the sponsor statement. In Alaska, a lot of recreational activities
are offered for tourists as well as locals. She cited sport
fishing, hunting, and hiking as examples. The bill establishes the
responsibilities of the commercial recreational businesses, as well
as the responsibilities of those who choose to participate in such
activities. The bill addresses the specific guidelines that
operators and participants need to follow to minimize the
possibilities of accidents, and should an accident occur it helps
to define who is to be held liable. The bill helps to avoid the
unfair and unreasonable claims hurting the small operators in
Alaska which are making it difficult for them to stay in business.
Number 0720
CHAIRMAN KOTT stated this is the third time a bill like this has
tried to make it through the legislature. A similar bill has
passed the House before, but met its fate in the Senate Judiciary
Standing Committee. He noted that this bill has been worked over.
It clearly defines responsibilities for both the operators and
those who seek to participate in various commercial recreational
activities.
CHAIRMAN KOTT opened the meeting up to public testimony.
Number 0760
MIKE WINDRED, Vice President, Marketing and Sales, Alaska Travel
Adventures, came before the committee to testify in support of HB
146. This bill has come up three different times in recent years
because of the support from the recreational providers. At
present, there is industry-wide support. He cited the Alaska
Visitors Association and the Alaska Wilderness Recreation and
Tourism Association as examples of organizations that support this
bill, which totals 95 percent of the recreational providers. There
is very good backing behind the bill, and it is well written.
MR. WINDRED further stated that the basic premise is for the
participants to assume some inherent risks and for the operators to
perform a better standard that is not required today. In other
words, an operator would have to explain to the participants the
inherent risks for a particular activity. In addition, the
operator would also need to train its employees in CPR
[cardiopulmonary resuscitation] and first aid, use maintained
equipment only, and act in a reasonably safe and competent manner.
This has been decided in litigation, but setting it forth in
legislation makes it more defined and simple. He believes the bill
would help his company and many other businesses like it by
reducing nuisance suits that are presently settled out of court.
Alaska Travel Adventures has a fairly large deductible that seems
to rise as there are more and more small suits. He explained a
small suit is typically a customer who trips or falls out of a raft
or does something that could have been completely caused by their
own actions and not by fault of the operator. An attorney will
typically determine the deductible, which usually ends up being the
amount that the case is settled for. This bill would definitely
put money back into his pocket for those types of "frivolous"
lawsuits. It would also ultimately reduce the insurance rates.
MR. WINDRED further stated, in response to the position paper from
the Alaska Action Trust [dated April 12, 1999], it doesn't surprise
him that they have come out against this legislation because it
would take money out of trial lawyers' pockets. It would not
inhibit litigation if a consumer wants to sue. The large cases
would go to court. In further response, the purpose of the bill is
covered in statute, but not enough. It would help fight the
nuisance claims before going to litigation thereby reducing claims.
In further response, this legislation would not be contradictory to
ski areas already in statute. In further response, several small
businesses have been closed because of these claims. He cited a
small rafting operation in the North and Southeast that have been
closed because the profits were lower than the risks - the
deductible. In further response, no operator would market
contributory negligence. It wouldn't be a stigma for Alaska. It
hasn't stopped anybody from traveling to Mexico or Europe where a
person wouldn't even think of entering into a lawsuit if that
person was hurt there. In further response, the responsibilities
of participants need to be in the bill to make it strong. In
further response, if an operated used faulty equipment or failed to
explain the inherent risks, that operator would be apt to lose in
a litigation at that point.
Number 1203
REPRESENTATIVE GREEN asked Mr. Windred whether this would be any
kind of hardship for an operator.
MR. WINDRED replied he doesn't think so. If anything, it would be
good for the industry. It would hold it to a higher standard,
which could be used to make tourists feel safer.
Number 1241
REPRESENTATIVE CROFT stated the ski liability statute sets the
consequences for both operators and participants. This bill
doesn't say what would happen if an operator doesn't "do it." In
comparison to the ski statute, a ski operator or other person who
violates a requirement of the chapter is negligent and civilly
liable to the extend a violation causes injury to a person or
damage to property. He asked Mr. Windred whether he has any
objection to including that language.
MR. WINDRED replied he is not familiar with the ski area statute,
other than it is specific to an activity. The idea is to bring all
the different types of commercial recreational activities under one
bill.
Number 1349
REPRESENTATIVE CROFT said it is a legitimate concern. The language
in the bill is more broad. The responsibilities of operators of
commercial recreational activities are broad as well. He asked Mr.
Windred whether there can be duties and consequences for both
parties.
MR. WINDRED replied, as an operator, he doesn't see why not.
Number 1431
REPRESENTATIVE MURKOWSKI asked Mr. Windred what his company has
paid on average for nuisance suits.
MR. WINDRED replied Alaska Outdoor Adventures sees between $10,000
and $25,000 a year in nuisance suits. That can be from either one
case or several small cases. He cited the suits are from
stumbling, falling off a chair, or something that an operator could
not have prevented. In most of those cases, his company ends up
paying the bills. He doesn't have a problem with that; he has a
problem with the "pain and suffering" suits.
Number 1544
REPRESENTATIVE MURKOWSKI asked Mr. Windred whether the majority of
the frivolous suits are settled prior to litigation within the
courts.
MR. WINDRED replied correct.
Number 1564
REPRESENTATIVE KERTTULA asked Mr. Windred whether he actually has
had somebody sue his company for stumbling over a rock.
MR. WINDRED replied yes.
REPRESENTATIVE KERTTULA asked Mr. Windred what happened with the
case.
MR. WINDRED replied the process is either the attorney or client
will contact his company directly and ask for the insurance
company. He usually responds to them directly. At the point the
dollar figure is determined, his company either decides to turn it
over to the insurance company or decides to fight it.
Number 1608
REPRESENTATIVE KERTTULA asked Mr. Windred whether his company
settled that case or just moved to dismiss it.
MR. WINDRED replied in most of those types of cases his company
ends up paying for the hospital fees, transportation fees and
damages to any equipment, such as a camera. The case is usually
settled for a couple hundred dollars or so more, which is well
worth it compared to going to litigation. Nevertheless, it is
generous considering that they stumbled over their own feet.
Number 1680
REPRESENTATIVE ROKEBERG asked whether anybody knows who is the
Alaska Action Trust.
REPRESENTATIVE MURKOWSKI replied Jan Bouch is the executive
director of the Academy of Trial Lawyers Association. Her guess is
that Alaska Action Trust is a lobbying arm of that association.
Number 1780
REPRESENTATIVE ROKEBERG said he is concerned about who is defining
the "inherent risk of commercial recreational activity." In other
words, how would an operator explain to a participant the inherent
risks of a particular activity? Every activity has a different
type of risk.
Number 1798
MR. WINDRED replied his staff is trained in the safety requirements
for each activity. They are different for each activity, but it
falls upon an operator to determine what are the standard inherent
risks. That is pretty standard for the industry as it sits now.
Number 1869
REPRESENTATIVE ROKEBERG said if a person is going bungee jumping
that person should probably sign a release. He asked Mr. Windred
whether that is the direction the bill is going.
MR. WINDRED replied if an operator doesn't have a signed release
for bungee jumping that operator is looking for trouble. There are
some areas where signed releases work well. There are some areas
where requiring a signed release does not work well. He cited his
salmon bake where several hundred people attend a day and Binkley's
river tour in Fairbanks as examples. The tour in Fairbanks still
has to follow coast guard protocol in terms of orienting
passengers to the safety aids.
Number 1949
REPRESENTATIVE ROKEBERG noted that the bill is restricted to
commercial outdoor activities when there are two new ice rinks
being developed in Anchorage that probably will have some sort of
outdoor rink adjacent to them. He is concerned about the rink
rats.
Number 2004
REPRESENTATIVE KERTTULA asked Mr. Windred whether he would include
his salmon bake in the definition of "recreational activity."
MR. WINDRED replied he would include it because it is sold as a
tour; it is not sold as a restaurant.
Number 2041
REPRESENTATIVE JAMES stated she is pleased to see this type of
legislation. In her lifetime, she can remember when there wasn't
insurance, there weren't so many trial lawyers, and when a person
fell down and hurt himself it was his own fault. She is not saying
that, if somebody gets hurt at somebody else's expense, that person
should get off free. She doesn't care if other legislation comes
around for each type of commercial activity because the litigious
side of this issue is chilling for people willing to invest money
for recreational activities, even when it creates jobs because the
inherent liability is so overwhelming.
Number 2248
CHAIRMAN KOTT stated that the inherent risk in downhill skiing is
different than other outdoor recreational activities such as bird
watching. He mentioned the types of risks associated with downhill
skiing such as a broken bone.
Number 2340
BOB ENGELBRECHT, Owner, North Star Trekking, came before the
committee to testify in favor of HB 146. He is also on the board
of directors for the Alaska Visitors Association. He has been in
the tourism industry in Alaska for about 16 years, primarily in the
adventure side of it. Tourism in Alaska has been evolving and
changing over the past few years. It's not just tourists arriving
on cruise ships, but more and more people are wanting to experience
Alaska in the back country. In most cases, they don't have an
appreciation of what they are getting into.
TAPE 99-35, SIDE A
Number 0001
MR. ENGELBRECHT continued. He runs a tour of taking people on the
Mendenhall Glacier. The inherent risk of that tour is walking on
the ice. There is no way around it. His insurance broker wanted
to put AstroTurf on the glacier where the people walk around. The
point of the bill is to not absolve operators of negligence or to
put the participants in an activity in an unrealistic position so
that they aren't covered by insurance. The point of the bill is to
make sure that the participants are aware of what they are getting
into, and to make sure the operators are using good equipment, etc.
And, if there is a health or physical ability issue, to find out
about it before hand and to decide to opt out of a particular
physical activity. At least people would go into an activity with
their eyes open and knowing what they are doing.
MR. ENGELBRECHT further stated, in reference to the ski area
statute, it is a very specific activity in a confined area. This
bill talks about a variety of activities in large areas where all
different kinds of conditions exist. He has a permit for the
Juneau Ice Field which is 1,500 square miles. He runs into all
kinds of different conditions. While the idea is similar in terms
of taking on an inherent risk, the other recreational activities
are more diverse and the infrastructure is not in place, just the
natural environment.
MR. ENGELBRECHT further stated that he informs clients in a number
of ways about the risks. They are given a briefing to make sure
that they understand what they are getting into. A surprising
number of people do not have a clue about what they are getting
into. Most say, "Well, it's not what I thought I was going , but
I want it anyway." They make that choice to go ahead. Once on
the glacier, the guides will give a thorough briefing on the
equipment, the area, and the inherent risks involved, and what they
need to cooperate based on the conditions.
Number 0379
CHAIRMAN KOTT asked Mr. Engelbrecht to comment on the concern of a
lack of consequence of an operator that does not provide the
requirements of the bill.
MR. ENGELBRECHT replied for the most part this bill is aimed at the
more frivolous suits or claims. The bill says the inherent risks
are those that are apparent to an ordinarily prudent person. There
is nothing in the bill that would prevent litigation or an operator
being taken to court. If an operator has done an inadequate job,
it would come out in court.
Number 0482
REPRESENTATIVE MURKOWSKI referred to page 2, line 2, of the bill -
"Contributory negligence" - and commented on getting hit in the
head with a paddle while white water rafting causing a concussion.
The other inherent risks had been discussed, such as falling out of
the raft, hypothermia, etc. She is concerned because all of the
inherent risks cannot be defined. She wondered how the bill can be
as broad by accepting the inherent risks of all these types of
commercial outdoor activities.
Number 0621
MR. ENGELBRECHT stated, not being an attorney, he doesn't have a
great response. The general point is, it is difficult to define
all the inherent risks. If a person is hiking and a limb falls
from a tree and hits that person, was that an inherent risk the
person was made aware of? It was an act of God. Was there
anything that the operator could have done? Was the operator
responsible? It's a gray area, and if it's a significant issue it
probably would go to court.
Number 0714
REPRESENTATIVE MURKOWSKI asked Mr. Engelbrecht how many nuisance
claims does his business average annually.
MR. ENGELBRECHT replied he just started his company last year. He
has one season under his belt. He had one minor injury from a
person tripping over his crampons and fell. Prior to starting his
company, he worked for 18 years with a larger company that carried
between 30,000 to 40,000 people onto the glacier. Out of that
number, there might have been a dozen slips, falls, and bruises.
The most serious injury would have been a broken wrist from
tripping and breaking a fall. He can only think of one that went
to litigation. The rest were settled by the insurance companies.
It's easier to give away a deductible than to spend tens of
thousands of dollars in litigation. He knows of one case that
settled for a couple hundred thousand dollars for tripping over his
own two feet. These claims come back to the operator. Very few go
to trial, but a lot of them happen and a lot of them get settled by
insurance companies every year.
Number 0848
CHAIRMAN KOTT asked Mr. Engelbrecht whether it's true that there
are industry standards that are accepted and considered inherent
risks, and anything beyond that is in the gray area.
MR. ENGELBRECHT replied, for the most part, it is fairly obvious if
somebody is not following prudent industry standards for the type
of activity going on. He doesn't see this bill as having any
effect on the other things that could happen such as negligence.
That's a whole different realm.
Number 0956
REPRESENTATIVE KERTTULA said Mr. Engelbrecht's company is not part
of the problem; it's willing to live up to the standards. She
asked Mr. Engelbrecht whether he has a problem with an operator
facing regular court liability for not living up to the standards
and not being able to claim the shield that the bill provides.
MR. ENGELBRECHT replied, not being an attorney, he's not sure how
he can technically answer the question. Practically, if somebody
gets hurt on a trail and bleeds to death and the guide didn't have
basic first aid training, it's obvious that there is some
negligence. At that point, the operator is not shielded by this
bill. The bill actually provides an extra tool for somebody who
has been hurt if an operator doesn't follow good prudent standards.
But, if an operator is doing everything reasonable that it can, and
the experience is inherently in a natural environment that hasn't
been sanitized and safety-proofed...He continued by stating that he
could put a guard railing and AstroTurf on the glacier and no one
would slip and fall, but it would be a pretty lousy experience.
REPRESENTATIVE CROFT asked Mr. Engelbrecht for a brochure.
MR. ENGELBRECHT gave Representative Croft a brochure. He noted
that in the brochure there is a list of equipment given for safety.
He cited ice axes, crampons, and safety harnesses as examples.
Number 1136
CHAIRMAN KOTT closed the meeting to public testimony.
Number 1146
REPRESENTATIVE CROFT stated it is appropriate in ski areas and in
general to define the inherent risks of the participants and the
fundamental responsibilities of the operators. The bill says
clearly, that if a participant doesn't meet his or her
responsibilities, it "is" a contributory negligence. He has an
amendment using the exact language from the ski area statute that
puts everything on an even keel for both the operator and
participant.
Number 1227
REPRESENTATIVE CROFT made a motion to adopt Amendment 1. It reads
as follows:
Page 3, line 9
Insert
Sec. 05.50.060. "A person who operates a business that
offers a commercial recreational activity and violates a
requirement of this chapter is negligent and civilly
liable to the extent the violation causes injury to a
person or damage to property."
CHAIRMAN KOTT objected. He called on Mr. Mike Ford, drafter of the
bill, and asked him whether there are others in statute that are
narrowly constructed like the ski statute.
Number 1265
MIKE FORD, Attorney, Legislative Legal Counsel, Legislative Legal
and Research Services, Legislative Affairs Agency, came before the
committee to answer questions. The ski area statute is the only
one of its kind. There are other statutes that deal with
recreational activities, but they mostly refer to licensing and
safety requirements. He cited boating as an example. The ski area
statute deals with a very specific activity, while this bill deals
with commercial recreational activities that could include a number
of different things.
Number 1318
REPRESENTATIVE ROKEBERG said he is concerned about aviation
activities. He asked Mr. Ford whether the bill includes the use of
aircrafts.
MR. FORD replied it would cover an aviation club that took people
up as a business. It meets the definitions of "commercial
recreational activity" and "recreational activity" in the bill.
Number 1360
REPRESENTATIVE ROKEBERG said he finds that troubling.
REPRESENTATIVE CROFT asked Representative Rokeberg whether he wants
to exempt them.
REPRESENTATIVE ROKEBERG replied, "I think so."
REPRESENTATIVE CROFT suggested that Representative Rokeberg write
up some language.
REPRESENTATIVE ROKEBERG further stated he is also concerned about
the outdoor rink rats.
REPRESENTATIVE MURKOWSKI stated, "Don't forget those rock climbing
walls." Most of them are indoor.
Number 1388
MR. FORD pointed out there was legislation that dealt with
skateboarding rinks and municipalities that operate them last year
as an example of another activity that was thought to need
protection.
REPRESENTATIVE ROKEBERG asked Mr. Ford whether the bill passed.
MR. FORD replied, he believes, it passed the House.
REPRESENTATIVE ROKEBERG asked Mr. Ford whether this bill would deal
with skateboarding as well.
MR. FORD replied only if it's an outdoor activity.
CHAIRMAN KOTT noted only if it's a commercial outdoor activity.
MR. FORD noted that the bill last year targeted indoor facilities.
But, an outdoor facility might fit the definitions, if it's
commercial.
Number 1446
REPRESENTATIVE MURKOWSKI asked Mr. Ford whether he has seen
Representative Croft's amendment.
MR. FORD replied no.
Number 1470
CHAIRMAN KOTT called for an at-ease at 3:15 p.m. and called the
meeting back to order at 3:20 p.m.
Number 1476
CHAIRMAN KOTT withdrew his objection. There being no further
objection, Amendment 1 was so adopted.
Number 1487
REPRESENTATIVE CROFT said, in regards to aviation activities, an
argument could go either way. There should be a standard care for
persons jumping out of an aircraft. There could be advantages to
the operators being in, but all of the implications haven't been
thought through since it wasn't foremost on everybody's mind when
drafting the bill.
Number 1549
CHAIRMAN KOTT asked Mr. Ford whether flight seeing is part of the
bill.
MR. FORD replied he doesn't see a reason to exclude flight seeing
from the application of the bill. He doesn't see how it could be
argued that they are not included because everyone understands that
people fly for recreation. He can go to the Juneau International
Airport where there is a flight service to learn how to fly which
costs money. It certainly is a commercial and recreational
activity, and somebody who suffers harm would be included.
Number 1591
CHAIRMAN KOTT asked Mr. Ford whether there is a difference between
the inherent risks and negligence for aviation activities.
MR. FORD replied the inherent risks change for each activity.
Certainly, getting into an airplane is different than getting into
a raft or going to a salmon bake.
Number 1621
CHAIRMAN KOTT stated the only other issue is the definition of the
term "recreational activity." He asked Mr. Engelbrecht, as a
representative of the industry, whether there is any merit in
including indoor activities. He cited indoor ice skating rinks and
climbing walls as examples.
Number 1655
MR. ENGELBRECHT replied the climbing wall is the immediate thing
that comes to his mind. He noted that the environment is
controlled more for indoor activities compared to the unimproved
outdoor type of activities.
Number 1690
CHAIRMAN KOTT said he was thinking along those lines as well. The
definition provides for a hobby which could be a whole host of
things such as painting. It's a whole new "ball of wax" that he's
not willing to get into.
Number 1729
REPRESENTATIVE CROFT made a motion to move CSHB 146(L&C), as
amended, from the committee with individual recommendations and the
attached fiscal note(s). There being no objection, CSHB 146(JUD)
was so moved from the House Judiciary Standing Committee.
CHAIRMAN KOTT opened the meeting to public testimony again to
accommodate a witness he overlooked.
Number 1822
RUSSELL L. WINNER, Alaska Academy of Trial Lawyers, testified via
teleconference from Anchorage. The academy is the lobbying arm of
the Alaska Action Trust. He wrote the position paper for the
trust. In his twenty years of practice, he hasn't had one case
that dealt with this issue. It's an area that is not heavily
litigated. The trial lawyers are not interested in this bill to
line their pockets, but instead to ensure that people who are
insurable are (indisc.). And, if they are, then they should
receive a fair compensation. The bill raises more legal questions
than answers. Who defines inherent risk? He replied, the
operators or the courts. How is it defined? If it's defined
specifically, what if an injury is different? If it's defined in
general terms, is it feasible and valid? If the inherent risk of
white water rafting is drowning, then just about anybody who falls
in the water and drowns without cause would be subject to (indisc.)
inherent risk. He's not sure that is the intent, but a general
definition might fall into that category. The same is true for air
taxis. An inherent risk of flying in an air taxi is crashing. Is
the net effect of the legislation to exempt air taxis from
liability when a pilot flies into a mountain or is negligent for
not avoiding bad weather, for example. The bill says that
participating in a commercial recreational activity a person is
contributorily negligent. He wonders whether that is a wise way to
promote outdoor recreational activities for the state. He also
wonders whether any other state has enacted a bill like this.
Information like this can be widely spread to the public. It might
be counterproductive to the industry. If a bill was placed before
the committee exempting law suits in other areas, the testimony
would be similar. He cited car rental agencies as an example. The
common law in Alaska has been developed by the courts and juries
articulating liability and responsibilities. It has worked well
and if the legislature starts to enact this type of reform there
will be a piecemeal and confusing process. It is better to trust
juries with these matters based on general principles of the common
law than to try to articulate the specific rules for each industry
in the state.
Number 2088
REPRESENTATIVE CROFT asked Mr. Winner whether, even with the
amendment, he thinks that the bill should not pass.
MR. WINNER replied he hasn't seen the amendment, but from what he
gathered listening to the conversation it is an improvement. He
still thinks that this is (indisc.) legislation. It opens the door
to other groups to come forward and ask for immunity. He
reiterated that the common law system and juries are better able to
decide on a case-by-case basis. This legislation asks whether or
not to stay with a common law system or to move towards a common
(indisc.) of the laws of tort. He thinks that the state should
stay on the common law side of that line.
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