This series of articles explores the legal aspects associated with the risks of operating an adventure tourism business, with specific relevance to the legal framework applicable to South Africa.
Summary: Part 1 in this series provided definitions for the term Adventure, while Part 2 looked at risk in terms of Nationality of Participant, Service Providers, Bookings, and Terms & Conditions, Part 3 covered Indemnity and Requirements of the Consumer Protection Act (CPA), Part 4 covered risk and signage, Part 5 dealt with Duty of Care in relation to Negligence, Omission, and Relationship, and Part 6 concluded Duty of Care with Acceptance of Risk and Insurance.
Part 7. By ‘Louis The Lawyer’
RISK IDENTIFICATION & MANAGEMENT CHECKLIST FOR ADVENTURE SPORT OPERATORS
Many, and probably most, of the adventure sport activities in South Africa are provided by businesses that specialise in their field, are passionate about it, are sound in terms of risk management, and have a good track record. On the other hand there are no doubt operators who supplement their own services with that of third parties, and then there are those travel and tourism businesses who do not actually carry out or provide the services it offers to its clients (‘pax’/’participants’) itself but ‘farm out’ the entire process to a third party service provider (‘SP’).
Legally speaking it means that the operator acts as the principal where it provides the service itself and where SP is involved, it could still be acting as the principal but mostly it will be acting as an agent, facilitator, broker or as referred to in the Consumer Protection Act (‘the CPA’), an ‘intermediary’ – the latter has changed the liability landscape not only as far as imposing substantial obligations on the operator but adding to it the matter of absolute liability. (More about this later).
This article is aimed at all adventure sport operators, no matter in which guise it transacts business (‘the Business’) and in a manner of speaking, it is a guideline to ensure that the exposure of the Business is identified and dealt with as effectively as possible. It pertains not only to such SP but also to the Business itself – some introspection and audit of its own systems is required and should be an annual prerequisite.
I will not go into much detail about the different types of entity, save to say that the Business can be e.g. a sole proprietor, partnership, close corporation, company or trading trust. Each of these has its own idiosyncrasies but given the nature of the activities adventure sport entails, I would strongly advise against the first two as liability is effectively personal and the owner(s) can lose everything they own in the event of a catastrophe! Add to this cocktail the highly publicized and prevalent ‘Duty of Care’ issue (see Parts 5 and 6 of this series) and you may end up with a hangover of note!
It is imperative that your terms and conditions (‘T&C’) stipulate the capacity in which you are acting i.e. principal or agent or broker. This has very important legal, accountability and liability implications. It is not uncommon that the T&C states that all services provided by a SP will be subject to the SP’s terms and conditions (‘SP T&C’) and that the contractual relationship will be established (regarding such services) directly between the SP and pax.
However such a clause has various implications and has, will, and may, give rise to problems. The Business may have a problem with European Community (‘EC’) pax and agents who will cite the EC regulations. (More about that later).
I have also (and more so recently) experienced cases where pax (or agent on behalf of the pax) refuses to sign the T&C containing such a clause and/or call for the SP T&C. This is now their right in terms of the CPA and the Business must provide it or provide access thereto.
There are also confidentiality implications – not only from a common law point of view, but also in terms of the Protection of Personal Information Act (‘POPI’) in so far as information is shared with third parties, whether locally or overseas. (More about this later).
To be continued in Part 8.
Disclaimer: This article is intended to provide a brief overview of legal matters pertaining to the adventure tourism industry and is not intended as legal advice. © Adv Louis Nel, ‘Louis The Lawyer’, January 2017.