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Many recreational service providers, including gyms and rock climbing centres, offer their customers opportunities to participate in activities that have the potential to cause injury or even death.

If you provide recreational services in New Zealand, you’ll need to ensure your terms and conditions cover you for these risks.

Otherwise, you’ll increase your chance of getting sued and being liable for large sums of money. 

Clauses in your business’ terms and conditions can exclude your liability for death and injury. 

However, doing this correctly is difficult because the laws in this area are very complex.

Before you add any exclusion clauses into your business terms and conditions, it’s important to know what they are and how they can protect you. 

What Is An Exclusion Clause?

An exclusion clause has the potential to fully exclude your liability if something goes wrong while a customer is using your service.

Exclusion clauses can be found in many customer contracts. They’re particularly common in the terms and conditions of businesses that provide recreational services. 

However, inserting an exclusion clause into your business’ terms and conditions isn’t always straightforward due to the range of laws and regulations that apply in New Zealand. 

What makes this complex in New Zealand is the interaction between the law of negligence and the Consumer Guarantees Act 1993 as well as the Accident Compensation Act 2001.

Here are three key areas to consider if you’re thinking of adding an exclusion clause to your business’ terms and conditions.

Negligence

Negligence can often be a difficult area of law to navigate.

As a recreational service provider, you owe a duty to your clients that your services will be of a particular standard and that you will not be negligent. 

You may exclude liability for negligence if you draft your contract correctly. However, in New Zealand, the Accident Compensation Corporation (ACC) provides no-fault personal injury cover for all residents and visitors to New Zealand. This means that people usually cannot sue for personal injury – instead, they can apply for assistance from the ACC.

Consumer Guarantees Act

The Consumer Guarantees Act 1993 protects consumers when they purchase goods or services by providing automatic rights, similar to the ‘consumer guarantees’ in Australia. 

Generally, under the Consumer Guarantees Act, it’s your business’ responsibility to guarantee that activities will be provided with due care and skill. 

If a person using your services is injured, they may seek assistance through the ACC rather than suing your company for negligence.

However, it is still important to have clear terms and conditions that comply with the Consumer Guarantees Act and other relevant New Zealand laws.

The Accident Compensation Act

The Accident Compensation Act 2001 governs personal injury compensation in New Zealand.

This Act establishes the ACC scheme, which provides comprehensive, no-fault personal injury cover for all New Zealand residents and visitors.

Because of the ACC scheme, the ability to sue for personal injury is highly restricted in New Zealand, which is a significant difference from the Australian legal system.

Understanding the implications of the Accident Compensation Act is crucial for recreational service providers operating in New Zealand.

Having a lawyer guide you through this process will ensure that you have the necessary protections to cover your liability when it comes to the specific risks involved in your recreational services business. 

What To Take Away…

As a recreational service provider in New Zealand, it is important to know what steps you can take to manage your liability for death and injury. This is a very complicated area, so if you’re considering how best to protect your business, give us a call on 0800 002 184 or email us at [email protected] and we’ll happily help you out!

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