Edition 08/2002

Implementing Risk Management Strategies to Limit Exposure to Liability

Prior to looking at risk management strategies that will limit the exposure to liability it is necessary to have some knowledge of the laws relating to liability.  The two sections of law to look to are Common Law and Statute Law.

Common law is that section of law that evolved through custom and public opinion over the centuries.  It is the law of precedent, being constructed on decisions of the Courts in disputes brought before them.  Common law is continually developed and refined as new points of law come before the Courts and are decided by them.  The decision of any Court on a question of law is binding on all Courts of lesser authority, unless and until a Court of equal or greater authority gives a different decision on the same question.

As the Common Law is derived from the judicial settlements of disputes between members of the community, it is accordingly the Common Law that determines the rights and responsibilities among people.  It governs the duties that each person in the community owes to his fellows and the rights of his fellows against him if he should fail to fulfill his duties.

Statute Law is the “written law” of the land.  It is regulation enacted by parliament to clarify, codify or modify the Common Law and to control the conduct of members of the community for the good of the community.  Parliament gives legal force to the wishes of the people of the day via Statute Law.  Where Statute Law conflicts with the Common Law, the Statute prevails.  However Statutes may be repealed or varied by parliament but the Common Law cannot.  When a Statute is repealed it no longer has any effect and the Common Law immediately becomes the relevant law in respect of those matters to which the Statute referred.

Therefore, when pursuing strategies to limit exposure to liability it is necessary to address liabilities emanating from Common Law and liabilities emanating from Statute Law.

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This requires knowledge in not only the principles of Duty of Care and Negligence, but also in regard to what Legislation may be relevant to your organisation and the compliance requirements of such legislation.

The purpose of this paper is not to look at the theoretical aspects of risk management.  Some would suggest that there is no shortage of risk management theory, but rather a shortage of practical advice on what measures can be taken to minimise the likelihood and/or consequence of incidents that can lead to liability.  But first, we do need to look at administration aspects.

An important point to make is that risk management should not be seen as separate to quality management – it is in fact simply a part of a quality management system.  The risk management context needs to be integrated into the business plan, aims and objectives of the organisation and become a part of everyday practices.  Risk management is not rocket science, but rather the application of common sense practices.  Most sport and recreation organisations would have been using risk management principles for years; what are likely to be missing are a systematic approach and a degree of discipline.  Documentation is an important component of a risk management program and it is often this area where organisations have significant room for improvement.

With regard to the management function, the organisation should have a documented Safety and Risk Management system in place that identifies hazards and evaluates and controls risks.  This system should include policies and procedures that personnel and members are aware of, understand and use.  Safety and management of risk responsibilities should be defined (e.g. in job descriptions) and the organisation’s Management Committee should regularly include Safety and Risk Management on its meeting agenda with details of those discussions being included in the minutes of the meeting.  The organisation should have Safety and Risk Management as a portfolio position, with the identity of this officer known to all members.                              Continued ....