New Appellate Guidance on Anticipatory Releases

The Oregon Supreme Court recently affirmed that the public policy favoring the deterrence of negligent conduct by holding wrongdoers accountable when they break a safety rule and hurt another overrides at least some prospective releases immunizing wrongful conduct.

In Bagley v. Mt. Bachelor, Inc., 356 Or 543 (2014), a recreational activity business wanted to use a customer’s pre-activity liability release to immunize itself from accountability for breaking a safety rule and catastrophically injuring that customer. Such pre-activity liability releases are commonly used by recreation-related businesses, such as exercise gyms, sports facilities, climbing walls, rafting services, and ski areas. Such businesses typically require customers to prospectively waive all potential negligence claims that may arise against the business if the customer is injured by the business breaking a safety rule. Usually these releases are extremely broad in that they do not simply waive liability for injuries caused by an inherent risk of the activity, but also waive liability for unreasonable dangers caused by the business itself. For example, a ski area release is not only intended to immunize the ski business from the inherent danger that a skier may crash into a tree, but also typically from any liability to a customer who is killed or injured when a chair lift falls from a great height due to negligent maintenance. Similarly, an exercise gym’s release is usually not only intended to immunize it from the inherent risk that a customer may pull a muscle when choosing to lift weights, but also from liability if the customer is injured when stairs in the gym collapse because of rotting floor beams that the business was aware of but chose to never repair.

The Oregon Supreme Court in Bagley distinguished between immunity from liability arising out of the inherent risks of a recreational activity and releases granting immunity from liability when the business actually creates an unreasonable danger to the customer. The Court re-emphasized that because “public policy favors deterrence of negligent conduct,” a pre-activity release – that the ski area business hoped would immunize its conduct that unreasonably creates a danger to its customers – was invalid.