Published August 23, 2002
Risk is an integral element of sport. Sport without risk would cease to be sport. This unique aspect of sport must be factored into any discussion of risk management within sport facilities, programs and events. A second unique aspect of risk management in sport is that the overwhelming majority of opportunities to participate in sport in Canada arise out of the efforts of private, voluntary organizations. Governments may fund sport and may provide facilities, and private businesses may own professional teams and operate pro sport facilities, but participation in sport in this country is almost entirely the domain of the non-profit sector .
Some of us fondly remember the "kitchen table" days of amateur sport when decisions were made informally and little attention was paid to risk management. Today, the business of amateur sport takes place around the boardroom table. Voluntary sport organizations have greater responsibilities towards their participants and members than ever before, and today's sport managers need knowledge and skills that they didn't used to need, including knowledge and skills about the law, insurance, information technology, marketing, contracts and risk management .
In today's non-profit organization risk management means more than locking away valuables and taking steps to keep participants from physical harm - it also means managing financial and human resources wisely, governing effectively, making decisions soundly and projecting a positive image towards sponsors, government funders and the community. The focus of this paper is practical and sensible risk management for the sport organization that runs its programs in its own facilities or in facilities owned by others . Such an organization is typically governed by a voluntary board, its programs are overseen by committees and its day-to-day operations are directed by a small but dedicated staff.
It has been my observation over the past decade of working with such organizations that some people do risk management some of the time (although they may not be aware of it) - but very rarely is there a concerted attempt to carry out risk management in an organized and systematic way, or to create among staff, volunteers and members an awareness of the importance of risk management. Hopefully, the material in this paper will provide some useful information for the sport manager by setting out a practical methodology for developing a risk management plan, and by stressing the importance of creating a risk management culture within a sport organization or facility.
THE SPORT ORGANIZATION'S RISKS AND RESPONSIBILITIES
From the perspective of risk management, there are three important areas of responsibility for the sport organization:
Failing to meet any one of these responsibilities can lead to unwanted consequences, some of which have a legal aspect:
Any one of these incidents – whether an injury, a dispute about decision-making, or a loss of property – will cost a sport organization money and other valuable resources, which means that fewer of these are available for the sport organization’s most important business: providing program opportunities to participants.
One word of caution for the sport manager – there is no magic formula for risk management. There is no cookie-cutter or checklist that can be used to do risk management in an organization or facility. While there are fixed concepts and common approaches, there are no black and white rules. One organization’s risk management program will be very different from another, depending on the sport discipline, whether or not the organization operates a facility, the organization’s structure and mandate, and the organization’s relationship with its members.
The key to doing risk management is to understand some basic principles and a practical methodology, and then to apply these systematically and in a common sense manner. The balance of this paper focuses on the legal responsibility to provide a safe environment.
PROVIDING A SAFE ENVIRONMENT
Risks that are inherent in a sport activity and injuries that occur in the normal course of a game rarely give rise to a claim of negligence. However, risks that are not inherent in the sport, that pose an unreasonable risk of danger, that arise out of a deliberate disregard for the rules of the game and that can otherwise be foreseen may be the basis of negligence, and are precisely the risks that need to be managed. Negligence and liability are legal terms with precise legal meaning.
These terms relate to standards of behaviour that the law expects, and understanding the law of negligence is an essential first step in understanding risk management for the small sport organization or sport facility. In general terms, negligence refers to behaviour or action that falls below a “reasonable” standard of care. Canadian law demands that we behave in a particular manner so that others are not exposed to an unreasonable risk of harm. The standard of behaviour we are expected to meet is what we call an “objective standard” – that is, it is determined by what an average person would do, or not do, in a given set of circumstances.
It is widely accepted that there is a certain amount of risk in many sport activities and that such risk is knowable, foreseeable, acceptable and depending on the sport, even desirable. What is unacceptable in sport is behaviour that places others in a situation of unreasonable risk or danger.
An action is negligent only when all four of these four conditions exist: a duty of care is owed to someone; the standard of care imposed by that duty is not met; a harm or loss is suffered; and the failure to meet the standard causes or substantially contributes to the harm or loss. Each of these conditions is described briefly below.
Duty of care
To be negligent someone must first have been in circumstances that created a duty of care to ensure the reasonable safety of another person. The circumstance that gives rise to this duty is the existence of a relationship between one person and another. For example, coaches have a duty to athletes, instructors have a duty to students, directors have a duty to members, program leaders have a duty to participants, facility operators have a duty to spectators. A duty is owed to anyone who we can reasonably foresee will be affected by our actions.
Standard of care
This is perhaps the most important part of the definition of negligence. Standard of care is difficult to define precisely because it is always influenced by the risk inherent in the surrounding circumstances. Thus, the duty to act responsibly remains constant, but the specific behaviour required to meet the standard of responsibility will change with the circumstances, such as the age and skill level of participants, the degree of supervision of the activity, the environment in which the activity occurs, etc. Determining what the standard of care might be in any given circumstance involved looking to four sources:
1. Written standards
These include government regulations; national and provincial building and facility standards; equipment standards established under regulatory agencies such as the CSA (Canadian Standards Association) or ASTM (American Society for Testing and Materials); voluntary guidelines established for a specific activity; policy and procedural manuals for a specific sport, program or facility; standards published by an international, national or provincial sport governing body; and a sport organization’s own risk management plan and other internal policies and procedures.
2. Unwritten standards
These are common practices in an industry, discipline or profession which may not be written down but nonetheless are known, accepted and followed. Examples of unwritten standards include giving a verbal warning when overtaking someone on a ski trail or bicycle path, using superior flotation devices and heavy-duty boats during spring run-off, assigning extra security personnel for large spectator events, or taking extra safety precautions when organizing a sailing race in adverse conditions .
3. Case law
These are court decisions about similar fact situations. Where circumstances are the same or very similar, judges must apply legal principles in the same or similar ways. In other words, prior decisions may act as a guide, or precedent, for future decisions where the circumstances are similar. Previous court decisions can provide very useful information for the sport manager, although gaining access to this information can be difficult.
4. Common sense
This means simply doing what feels right, or avoiding what feels wrong. Common sense is the sum of a person’s knowledge and experience – and trusting one’s common sense is always a good rule of thumb.
The third and fourth elements of negligence (that someone suffered a harm or loss, and that the breach of the standard caused or contributed to the harm or the loss) are quite straightforward. There will usually be little dispute that someone has been harmed, and as to causation, this will be argued by skilled lawyers in a court of law. Rarely does a claim of negligence hinge on these two elements: usually, the issue in dispute and before the courts is the second of the four elements – that is, was the standard of care breached?
Assuming that all four conditions are satisfied and negligence is established, the question of liability follows. While negligence refers to one’s conduct, liability refers to responsibility for the consequences of that negligent conduct. Responsibility may lie with the person who was negligent or with an altogether different person.
For example, an insurance policy transfers financial responsibility for negligence to an insurance company. A valid waiver of liability agreement discharges liability completely. An injured person may be partially responsible for their own injuries through the legal notion of contributory negligence. Finally, an organization may be vicariously liable for the negligent actions of its employees, directors, volunteers or members .
An understanding of the legal meaning of negligence answers the question “how does the law expect me to behave?”. The answer to this question lies in risk management, and good risk management means that negligence and liability are avoided.
This paper has described three areas of responsibility of the sport organization towards its members. Two of these responsibilities (providing a safe environment and ensuring that decisions are made fairly) are responsibilities that the law requires, while the third (protecting property) is not necessarily a legal responsibility but is nonetheless an important obligation the organization has towards its members. Falling short of meeting these responsibilities can lead to adverse consequences, most of which will ultimately cost money. Resources are scarce as it is, so avoiding these costs is crucial.
Having briefly described the responsibilities the sport organization has towards its members, and specifically the responsibility to provide a safe environment, the next question is “how do I behave responsibly?”. The answer lies is risk management. This section describes the risk management process and shows how to apply it within a sport organization or sport facility.
What is risk management?
What does “risk” mean for the sport manager? Risk is defined as “the chance of injury, damage or loss”. For the sport organization, this can be extended to mean “the chance of injury to your members or participants, damage to your property or property of others which you may be responsible for, or other loss to your organization, directors, volunteers, members, or to someone else”.
Ultimately, the effect of risk is a financial effect: the injury, damage or loss is going to cost money. And often, this cost is because the risk has resulted in some form of legal action or dispute.“Risk management” is defined as “reducing the chances of injury, damage or loss by taking steps to identify, measure and control risks”. This isn’t very complicated and simply means that the sport manager and others within the organization should be spending time thinking about potential risky situations, deciding which situations or circumstances might pose serious risks, and then determining what practical steps they can take to minimize those risks.
The common ingredient in all of these tasks is common sense. This task is also made easier when there is a “culture” within the organization that promotes safe and prudent conduct by all staff and volunteers.
What is the extent of the organization’s risk management responsibility?
Risk management activities will occur on different levels depending on the mandate of the sport organization, as expressed in its constitution, objects and bylaws. A local sport club that offers programs to individual members can adopt a narrow approach to risk management, which means the club manages risks only for those program activities it engages in directly.
A sport organization that is the governing body for sport activities in a province or other geographic region must adopt a broader approach, which means the organization manages risks for its own activities, for activities carried out under its supervision and for activities carried out by its members clubs and associations .
For a sport governing body, risk management should occur for three types of activities:
The third type of sport organization is the club or governing body that in addition to offering programs and services, also operates a facility. Typically this facility is intended for the use of the organization’s members and participants, but occasionally, the facility might also be made available to other user groups.
The organization that is also an “occupier” (as defined in the Occupiers Liability Act  ) has statutory duties to take such care as is necessary to ensure that people on the premises are reasonably safe. The occupier has a responsibility to oversee the physical condition of the premises, the activities that take place on the premises and the behaviour of third parties using the premises .
A PRACTICAL METHODOLOGY
There are three practical steps in risk management, and these never change: “identify, measure and control”. Put more succinctly, risk management is an organized process of asking the following three questions about a sport program, facility or event:
The first step in any risk management exercise is thus to identify the major areas of risk facing the sport organization. These “risk areas” (in insurance circles, they are known as “loss exposures”) can be defined as potential events or occurrences that could lead ultimately to financial loss for the organization, either through:
It is possible to bring some order and method to the task of identifying risks by keeping in mind that there are four main sources of risks and three main types of risks facing a sport organization. The four main sources of risk are:
The three main types of risk for a sport organization are:
The second step of the risk management process is to measure the risks that have been identified in terms of their potential seriousness. The seriousness of any particular risk depends on both its frequency (a measure of how often it might occur) and its severity (a measure of its consequences if it does occur).
Although this evaluation can become a complex exercise in probability and mathematics, it doesn’t need to be. While detailed injury statistics are available for certain high-risk sports such as hockey or skiing, and these in turn permit detailed calculations of frequency and severity, most sport situations require only an informed judgment as to whether a particular risk is low, moderate or high.
On this basis, the sport manager can then determine which risks are more important and thus warrant taking measures to control them.Once significant risks are identified, the third step of the risk management process involves finding practical, affordable and reasonable ways to control these risks. There is no magic formula for controlling risks – the control measures that a sport manager will select and implement will depend on the factors and circumstances of the sport club, organization, facility or event.
There are four general strategies for controlling risks. These are:
As a general rule, there is a relationship between the seriousness of the risk and the preferred strategy, where retain and reduce strategies are used for low and moderate risks, and transfer and avoid strategies are used for higher risks. Also, as a general rule it is a good idea to mix and match a variety of strategies, rather than to rely on just one or a few. Under each strategy, there are numerous tools and techniques to choose from, as illustrated in the next section.
EXAMPLES OF RISK MANAGEMENT TECHNIQUES
The examples of risk management measures shown below all apply to the first level of risk management described earlier – that is, doing risk management for the activities that the sport organization engages in directly:
Examples of measures to reduce risks:
Most measures to reduce risks involve planning, organizing and influencing human behaviour. This is an area where sport organizations exercise the greatest control and where there are the greatest number of options to manage risks. At the same time, this is probably the area to which sport organizations devote the littlest amount of time and the fewest resources. The numerous examples listed below are grouped according to the source of risk:
Where source of risk is facilities and equipment
Where source of risk is people
Where source of risk is program
Examples of measures to transfer risks:
Examples of measures to avoid risks:
ADDITIONAL COMMENTS ON INSURANCE AND WAIVERS
Insurance is a very common risk management strategy and it involves transferring risk to another party – in this case, the insurance company. Insurance is but one strategy to control risks, and alone is not always the best solution to a risk management problem. Sport organizations are encouraged to approach the issue of insurance using a risk management perspective, which means reserving insurance for the most catastrophic and crippling risks and losses, and relying upon other strategies, such as measures to reduce and avoid risks, for potential losses that are not so great.
The following are some general recommendations regarding the sport organization’s insurance program :
The information in this paper has provided a general conceptual approach for undertaking risk management, and has provided some examples of risk areas that face sport organizations and facilities, along with suggestions for measures to control these risks. Keep in mind that there is no uniform template or generic checklist that can be used to do risk management within a club, league, program or facility. Risk management decisions require some basic legal understanding, background experience in the sport, and good judgment. The right risk management decisions will depend upon each sport organization’s circumstances. It is also important to remember that risk management is an ongoing process. The fundamental steps in risk management don’t change, but the sport organization’s circumstances do, and the legal responsibilities of the organization may also change, although usually more gradually.
For example, five years ago there were few expectations that volunteer organizations would screen all their volunteers: today, the organization that doesn’t undertake some form of screening is likely no longer achieving a reasonable standard of care in the eyes of the law.
In closing, risk management is not rocket science – it is organized common sense, where common sense is the sum of knowledge and experience. Almost all sport organizations do some risk management in an ad-hoc manner. The key to doing risk management well is doing it in an organized manner, and this means doing a risk management plan to ensure that all sources and types of risks are considered and all legal responsibilities are fulfilled. A good risk management plan is an appropriate, reasonable and affordable mix of strategies, suited to the sport organization’s needs, circumstances and resources.
 About one in three Canadians aged 15 and over participates regularly in sport and over half this number do so as a registered participant in a club or league. The Canadian amateur sport system involves about 400,000 trained and certified coaches and is managed almost entirely by volunteers - nearly two million of them (Sport Participation in Canada - 1998 Report).
 The non-profit sport sector in Canada has had to grapple with enormous challenges through the 1990s: challenges made even more acute by the funding policies of the federal and provincial governments in the 1980s that created a virtual welfare state for amateur sport. In the early 1990s it was not unusual for an amateur sport organization to derive as much as 90 percent of its revenues from government sources. Today, the sport sector is learning how to pay its own way through membership development, event promotion, product sales, marketing and sponsorship. The skill set of the successful sport manager is evolving accordingly.
 Some of these materials are adapted from two publications of the Centre for Sport and Law: Your Risk Management Program: A Handbook for Sport Organizations (1998) and Negligence and Liability: A Guide for Sport Organizations (1995).
 It is our observation that the majority of amateur sport organizations are only just learning to exploit the potential of their intangible property assets. As a source of revenue these are becoming increasingly important. The sport manager interested in learning more about managing intellectual property may refer to Doing Business with the Private Sector: A Commercial Handbook, written by David Lech and published by the Centre for Sport and Law.
 Over the years the Centre for Sport and Law has assisted numerous sport organizations in managing their disputes. In one wrongful dismissal case, the Executive Director of the organization kept track of the time spent on the dispute - before the issue was resolved, she had spent 240 hours, or the equivalent of over six weeks of professional time, on the case.
 The general practice of other members of the sport community is typically a reliable indicator of appropriate behaviour since the standard of care is related to what a reasonable sport practitioner would do in the same or similar circumstances. However, sport managers should also be careful about following the crowd too closely: if following common practice entails risks that should have been recognized, mere conformity to normal practice may not be enough to meet the standard of care. The standard always relates to what should be done, not what was done or what usually is done.
 The principle of vicarious liability is important in the sport setting because the responsibility for program delivery rests very often with volunteers. In this area of the law, employees and volunteers are treated the same, yet it is common for the relationship with a volunteer to not be as clearly described as the relationship with an employee. For example, many volunteers may perform their services without the benefit or direction of a job description. When a volunteer is negligent, the organization may be vicariously liable if the volunteer was acting within the scope of his or her duties - hence the importance of defining and clarifying what these duties are. In recent years there has been a trend in the courts to hold organizations increasingly accountable for the harm suffered by clients/participants at the hands of their staff and volunteers. Today, an organization may be held vicariously liable if the circumstances of its program or activity (effected through planning, coordinating, staffing, supervising, etc.) significantly enhance the risk of harm to participants.
 This broader approach to risk management by governing bodies is recommended for several reasons. Firstly, these organizations give their "sanction" to certain competitive events organized by others, which means that the governing body's name is attached to the event and the organization would likely be implicated in any serious accident or legal matter. Secondly, many of these governing bodies have a common insurance program with their member clubs, which means that they have a vested interest (through low premiums, a good claims history and a safe record) in the activities of those clubs. Thirdly, risk management assistance and resources are an ideal member service that the governing body can provide to grass-roots associations.
 It is strongly recommended that all sport governing bodies put into force and monitor risk management guidelines for all sanctioned events (surprisingly, relatively few sport governing bodies presently do this). These guidelines could address issues such as: insurance requirements including naming the sanctioning organization as an insured; advance preparation of an emergency response plan; orientation and training for all volunteers including security personnel; implementation of alcohol management guidelines for social events associated with the sporting event; provision of appropriate first aid and sport medicine services; and pre-event inspection of all facilities, grounds and equipment. It is also suggested that the sanctioning organization designate an official representative to work with the host organization in advance of the event, and to be on-site during the event to monitor compliance with risk management guidelines.
 Under this statute, which exists in most provinces, an occupier is defined as a person who is in physical possession of a premises, or a person who has responsibility for and control over the condition of a premises, the activities conducted on a premises and the persons allowed to enter a premises. Control is not, however, necessarily related to exclusive possession of a premises - in some situations more than one occupier may exist.  Relatively few amateur sport organizations own and operate their own facilities. Rather, the common model is that these organization lease facilities of others (such as a municipality, school, college or university) for running their programs.
 All too often sport organizations and clubs purchase insurance from a generalist, and end up with a standard policy designed for a typical small business or commercial venture. It came as a surprise to one provincial canoeing association that their policy precluded coverage for injuries sustained by operating watercraft! Insurance in sport must be approached using a sport-specific, risk management perspective. For more information, refer to the publication Insurance in Sport and Recreation: A Risk Management Approach, published by the Centre for Sport and Law.
 Many sport organizations have used insurance programs quite effectively as a risk management incentive. For example, in some sports strict compliance with safety rules about eyeguards, mouthguards and other protective equipment is a pre-requisite for the participant to be covered by the organization's insurance programs. Other organizations use their insurance program as a lever to ensure that member clubs, leagues and associations maintain their status as "members in good standing".
 The likelihood that a waiver will be upheld by a court will depend on many factors: how it is drafted, how it is executed, how the contents of the waiver are communicated to the person signing it, and the nature of the activity being covered by the waiver. Ethically, waivers may be appropriate for use in high-risk programs involving adults who are skilled in the sport. The appropriateness of their use in all other programs should be evaluated very carefully.
Presented at the Symposium "Sports Management: Cutting Edge Strategies For Managing Sports as a Business", August 2002, Toronto