Virginia Companies Must Know The Limits Of COVID-19 Liability Waivers

Many Virginia businesses have reopened, in spite of the COVID-19 pandemic. Prudent businesses may require clients and customers to sign COVID-19 liability waivers — that is, agreements to prospectively waive any claims against such businesses for any COVID-19-related injuries.

However, Virginia businesses — and their lawyers — can only take limited comfort in such waivers, because they are likely unenforceable. Virginia is one of only three states that categorically refuse to enforce preinjury liability waivers.

Thus, even if an injured party previously agreed to release a business from any and all claims based on negligence, the business can still be held liable for negligence. This means that, as a practical matter, Virginia businesses operating during the COVID-19 pandemic must still exercise all reasonable care in attempting to provide their clients and customers with a safe and healthy environment.

Nevertheless, Virginia businesses should not abandon all attempts to minimizing their COVID-19 liability through client or customer agreements. While liability waivers may not provide an absolute defense, other language in the agreement can be used as evidence that the injured party assumed the risk of a COVID-19-related injury — and assumption of risk is a valid defense under Virginia law.

Accordingly, agreements that fully disclose the risks of COVID-19 can and do serve a function. They just cannot be relied upon to fully absolve a business from all potential COVID-19 liability.

Preinjury Liability Waivers Under Virginia Law

Virginia's aversion to preinjury liability wavers dates back to at least the 1890s, and a case involving a railroad accident. In Johnson Administratrix v. Richmond & Danville Railroad Company,¹ a railroad company hired James Johnson to remove a granite bluff that was on the railroad company's right of way.

The railroad agreed with Johnson that, when its trains passed the bluff, they would slow to 6 miles per hour, and also agreed that the railroad company would "in no way be held responsible for any injuries to, or death of, any of the members of [Johnson's] firm, or of any of its agents and employees, sustained from said work, should such death or injury occur from any cause whatsoever."

One day, a train approached the work site at 25 mph. At the same time, one of Johnson's men was approaching the tracks with a heavy wheelbarrow, and headed downhill. Johnson ran toward the man, "with the train right behind him," warning of the oncoming train, but the man could not stop until the wheelbarrow reached the tracks.

Just as Johnson reached the man, the train struck the wheelbarrow, which slammed into Johnson, who died the next day. Johnson's estate sued the railroad company.

At trial, the jury entered a verdict in favor of the railroad, based on the contractual liability waiver. The Virginia Supreme Court reversed, holding that the waiver was void as a matter of public policy.

The court noted that the waiver purported to exempt the railroad from liability "even for the consequences of the company's own negligence ... and consequently precludes a recovery by the plaintiff, whether the company was negligent or not." The court found this was against public policy:

It would be strange, indeed, if such a doctrine could be maintained. To uphold the stipulation in question would be to hold that it was competent for one party to put the other parties to the contract at the mercy of its own misconduct, which can never be lawfully done where an enlightened system of jurisprudence prevails. Public policy forbids it, and contracts against public policy are void.²

The Virginia Supreme Court thus reversed and remanded the case for a new trial.³

Just over 100 years later, the Virginia Supreme Court reaffirmed Johnson in a case involving a tragic triathlon injury. In Hiett v. Lake Barcroft Community Association,⁴ a community association in Falls Church organized a triathlon to take place in and around Lake Barcroft.

A homeowner in the area asked Robert Hiett to join her as part of a team of teachers. Hiett agreed, and signed a liability waiver, which provided that he would "release and forever discharge any and all rights and claims for damages which I may have or m[a]y hereafter accrue to me against the organizers ... for any and all injuries suffered by me in said event."

At the start of the swimming event, Hiett "waded into Lake Barcroft to a point where the water reached his thighs, dove into the water, and struck his head on either the lake bottom or an object beneath the water surface." Hiett was paralyzed, and later filed suit alleging a failure to ensure the lake was reasonably safe, to advise participants of the risk of injury and to provide training on how to avoid such injuries.

The circuit court held that, absent fraud or misrepresentation, the liability waiver should be enforced. The Virginia Supreme Court reversed, explaining that:

The case law in this Commonwealth over the past one hundred years has not altered the holding in Johnson ... [in which] this Court found that such provisions for release from liability for personal injury which may be caused by future acts of negligence are prohibited "universally."⁵

The court distinguished cases that had upheld certain liability waivers in the intervening years on the ground that they addressed waivers of property damage, not personal injury, or indemnification with third parties.⁶

Because those cases "have not modified or altered the holding in Johnson," which pertained to waivers of liability for personal injuries, the court concluded that "the pre-injury release provision signed by Hiett is prohibited by public policy and, thus, it is void."⁷ The court thus remanded the case back to the circuit court, presumably for a trial on the merits of Hiett's claims.⁸

Hiett and Johnson remain good law today; state and federal courts in Virginia continue to hold that preinjury liability waivers for personal injuries are unenforceable.⁹ The rationale behind this policy is twofold.

First, if enforced, such waivers could encourage parties not to exercise ordinary care, and instead rely upon the liability waiver to protect them from any lapses in care that result in personal injuries to others.¹⁰ Second, if such waivers were enforced, "a party suffering personal injury [would be] barred from seeking a recovery from the tortfeasor, likely depriving the injured party of all possibility of recovery."¹¹

Virginia is in the extreme minority of states on this issue. Most states allow liability waivers for ordinary negligence, while refusing to enforce waivers for gross negligence, or intentional or reckless conduct.¹² However, only Virginia and two other states — Montana and Louisiana — categorically refuse to enforce liability waivers for all personal injuries.¹³ Indeed, Virginia's stance "is contrary to the Restatement Second of Torts, and is contrary to the great weight of American tort law."¹⁴

Nevertheless, the Virginia Supreme Court could reconsider its aversion to personal injury liability waivers in light of the unprecedented nature of the COVID-19 pandemic. For example, if a wave of COVID-19 personal injury lawsuits are filed, or if it becomes clear that the threat of COVID-19-related liability threatens serious harm to Virginia businesses or the economy, the court may start weighing the public policy concerns differently. At present, however, the court's 130-year history of refusing to enforce preinjury liability waivers continues.¹⁵

Assumption of Risk

While liability waivers are generally unenforceable, Virginia businesses can still include other language in their client or customer agreements to help establish that the injured party assumed the risk, which is a valid defense under Virginia law.

In Virginia, "a person's voluntary assumption of the risk of injury from a known danger operates as a complete bar to recovery for a defendant's alleged negligence in causing that injury."¹⁶ To prevail on an assumption of the risk defense, the defendant must show that the plaintiff (1) fully appreciated the nature and extent of the risk, and (2) voluntarily incurred the risk.¹⁷

The focus of this inquiry is on "the risk alleged to have caused the injury, not merely the risks inherent in the activity,"¹⁸ and hinges on whether the plaintiff subjectively assumed the risk, rather than whether a reasonable person would have assumed the risk.¹⁹

Accordingly, even where an agreement's liability waiver is deemed unenforceable, the language of the agreement may nevertheless be admissible to prove an assumption of the risk defense. This interaction between liability waivers and assumption of risk is well illustrated by Manchanda v. Hays WorldWide,²⁰ a case involving a tragic scuba diving accident.

A husband and wife enrolled in a scuba training course with a dive center in Alexandria, and signed an agreement with the dive center that included liability waiver language, as well as language stating that the divers understood that scuba diving was "physically strenuous" and could result in "heart attack, panic, hyperventilation, [and] drowning," and that the divers "expressly assume the risk of said injuries."

The course culminated in a series of open water dives. In the third group dive, the instructor and the husband lost sight of the wife. A search commenced and, over an hour later, the wife was found laying unconscious 57 feet below the surface. She died in the helicopter on the way to the hospital. Her estate filed a wrongful death suit against the dive center.

At summary judgment, the district court held that, under Johnson and Hiett, the liability waiver was void, but that it could serve as "evidence of the risks [the diver] knew before participating in the dive," and thus aid in determining whether the diver assumed the risk.²¹ Nevertheless, the court rejected the dive center's argument that the agreement was conclusive evidence the diver had assumed the risk, reasoning that to do so would conflict with Virginia's policy of not enforcing liability waivers.²²

The court also observed that the relevant inquiry was not whether the diver assumed the risk of scuba diving in general, but whether she "fully appreciated the risk of diving in conditions allegedly made more dangerous by Defendants' negligence."²³ The court denied the dive center's summary judgment motion and ordered the parties to submit proposed redactions to the agreements, to redact those portions deemed void.²⁴

With respect to COVID-19 liability, Virginia businesses should include language in their agreements sufficient to demonstrate that their customers or clients "fully appreciated the nature and extent of the risk" of contracting the COVID-19 virus.

Such disclosures should include an understanding of the risks of infection; the contagious nature of COVID-19; how infection and transmission can occur; the fact that safety precautions cannot guarantee no risk of contracting COVID-19; the symptoms that COVID-19 can cause, and the fact that such symptoms may be worse for those with various underlying medical conditions; and the fact that monitoring and maintaining social distance may be difficult, especially in the event the activity involves young children.

The agreement should also include language that discloses heightened risks from a failure of other individuals not following proper COVID-19 protocols, such as maintaining proper social distancing and proper hygiene measures. Finally, the agreement should state that the individual recognizes that the COVID-19 protocols being employed by the business — as designed and as implemented — may be insufficient to prevent the individual from contracting COVID-19 and suffering any related injuries, and that the individual nevertheless assumes all of these risks.

Virginia's steadfast refusal to enforce preinjury liability waivers does not mean that Virginia businesses have no ability to reduce the risk of COVID-19-related litigation. Rather, those businesses can include language in their client and customer agreements to help bolster an assumption of the risk defense — and should include language that identifies the risks of being exposed to COVID-19, how such exposure could occur and the physical risks of such exposure.