publication date: Nov 9, 2012
author/source: Barry Kwasniewski
Corporate sponsorship of charitable fundraising events can
be one of the keys to a successful campaign. However, if a participant in an
event is injured, that participant may claim damages not only against the
charity, but from the sponsor as well.
In the recent Ontario Superior Court of Justice decision
v. Bank of Montreal,
the court dismissed, on a pre-trial motion, a
claim for damages against corporate sponsors of a recreational soccer league.
This article will discuss the decision and analyze how charities and
not-for-profits may seek to limit their potential liability when organizing
The plaintiff, Joey Boudreau, brought an action for
personal injuries suffered during an indoor soccer game at a facility operated
by HoJO Enterprises Inc. operating as Soccerworld Hamilton ("Soccerworld") in
Hamilton, Ontario on February 26th, 2008. Unfortunately, as a result
of the accident, Mr. Boudreau was rendered a paraplegic.
The league that Mr. Boudreau participated in was operated
by the Ontario Soccer Association ("OSA"), whose financial sponsors included
the Bank of Montreal, Rogers Communications Inc. and Umbro Inc. ("Sponsors").
Mr. Boudreau alleged that given the potential dangers involved in the sport,
the financial sponsors each had a legal duty to inquire and ensure, in case of
an accident, that the OSA and Soccerworld maintained an adequate amount of
insurance to cover his healthcare and rehabilitation expenses.
Mr. Boudreau claimed that the Sponsors breached their
alleged duty of care, in that OSA had only purchased an insurance policy with a
$40,000 coverage limit for healthcare and rehabilitation for a paraplegic
injury. Mr. Boudreau was seeking $4,500,000 in general damages against the
Sponsors for the expected costs of his medical care.
Sponsors and your
are important to registered charities and Canadian registered athletic
associations. Without them, many activities and events would not be held. The
issue, however, is how much legal responsibility sponsors bear if an accident
or unforeseen event occurs at a sponsored activity.
courts have been quite firm in their stance on a sponsor's duty of care to
accident victims. In Milina v Bartsch
the Supreme Court of British Columbia held that Labatt Brewing Inc. did not owe
a duty of care to a participant in a ski exhibition, as there was no contract
between the company and the victim and no "room for imputation of vicarious
liability." Labatt's had purchases the right to display its logo and name on
the participant's equipment, an act equivalent to buying advertising space in a
magazine or on television. The court held that no legal foundation existed to
suggest that buying those types of advertising rights made a company or
individual legally responsible for any consequences of the sponsored activity.
In Gaudet v. Sullivan,
the Court of
Queen's Bench of New Brunswick examined the vicarious liability of a car
dealership for an injury incurred during a hockey game. In this case, the
plaintiff alleged that the car dealership and its owner were vicariously liable
for a tort committed by a player on their sponsored hockey team (the
"Defendant"). The court held that the car dealership was neither an agent nor a
servant of the Defendant, and that their only involvement with the team was the
purchase of the hockey sweaters. The limited involvement the car dealership had
with the team could not result in vicarious liability, as it would be
"unacceptable and improper." Allowing the dealership and the owner to be held
vicariously liable would make it "very difficult for many such teams to obtain
Even so, charities and not-for-profits should be aware
that these legal principles exculpating sponsors from liability may change in
situations where sponsors directly involve themselves in an activity (i.e. more
than just placing their name on a billboard or sweater). In Chen (Guardian ad Litem) v. Jose Navarez (the)
the Supreme Court of British
Columbia found that Rothmans and Benson & Hedges Inc. ("Benson")
were significantly involved in the organization of a fireworks display in
Vancouver Harbour. Following a tragic boating accident which resulted in the
death of four people, a third-party claim was brought against Benson for being
negligent in organizing the event. Because of its direct participation in
organizing the fireworks display, the court held that Benson had assumed a duty
of care in their sponsorship of the event. However, the court found that
Benson, along with the other sponsors and organizers, were not negligent in
their actions. In the result, the lawsuit against them was dismissed.
While courts have been reluctant to affix liability to
sponsors in the event of injury to persons or damage to property, the risk of
such liability increases if sponsorship involves direct participation in
organizing or operating an event. For charities and not-for-profits, there is
always the risk of liability for injuries when fundraising events involving a
risk of injury take place. However, such
risks can be reduced by the proper use of liability waivers, by taking appropriate
safety precautions, and by obtaining adequate liability insurance.
Because of liability risks, a sponsor may also require
that it be named as a party in any event waiver. A sponsor may also require
that it be covered by the charity's insurance policy for the event, and/or be
indemnified by the charity should a claim be made. Before agreeing to these
obligations, charities and not-for-profits should review them with their legal
counsel and insurance broker. An important part of a charity's or
not-for-profit's risk management strategy is to ensure that fundraising events
do not result in legal liability.
Barry W. Kwasniewski practices employment
and risk management law with Carters Professional Corporation, and would like
to thank Tanya L. Carlton, Student-At-Law, for her assistance in the
preparation of this article. Contact him by email.