Question:
What do you do when you find three lawyers buried up to their necks in
sand? Answer: Get another
foot of sand.
I
generally don’t promote lawyer jokes, being one of them myself, but
this one advances an article about the legal risks in the tourism
industry, where lawyers have been making significant money suing
businesses engaged in the tourism trade.
A good example is the Americans with Disabilities Act (ADA) which
has resulted in an avalanche of litigation.
For example there is an individual in California
who specializes in filing suits (more than 700 to date) alleging that
toilet paper dispenser heights don’t meet the 40-inch requirement of
the ADA, causing him humiliation, emotional pain and physical injuries. These suits have made him millions of dollars from
settlements. There are many
more, and even worse, examples of such “shakedown” suits.
No doubt the intent behind the ADA is good, and
California businesses have spent several to hundreds of thousands of
dollars each to make their businesses accessible to all.
However, the way the ADA is written and enforced, a few
individuals and their attorneys seem to be making remarkable sums of
money, even where building inspectors have previously signed off on all
such modifications. Many
smaller businesses have simply been put out of business.
Businesses are demanding reform in this area.
A new California law establishes a process to voluntarily certify
individuals as “access specialists” in an effort to aid businesses
in becoming compliant with the ADA. The California
Chamber of Commerce is promoting further legislation that would create a
safe harbor for businesses who utilize these access specialists.
Beyond ADA issues, those in the tourism trade need
to be aware of their legal responsibilities in this current litigious
environment, so that their customers enjoy their free time.
You want to see them next time on a repeat visit, not in court.
People are incredulous to hear about the
substantial numbers of specific laws and legal issues pertaining to this
industry. I will merely
list some of them: licensing; pervasive regulation of health, food,
alcohol, etc.; protection of a guest’s right of privacy; “diminution
of holiday values” claims; personal injuries and property losses;
overbooking; safety and security issues; and the list goes on and on.
A comprehensive treatment of these laws is not possible here
(whew!), so the remainder of this article touches upon some of the more
obscure or humorous legal issues involved, and ends with a checklist of
risk mitigation recommendations.
Did I say there were license issues?
Any hotel,
restaurant, or other concern in California that manufactures a product
of milk for the use of any patron or employee shall obtain a milk
products plant license. Products
of milk include frozen milk confections.
Hopefully, they don’t include chocolate milk.
Let’s visit another obscure law. In California, if (maybe it should be “when”) there is an
earthquake, flood, fire, riot, storm, or other natural disaster declared
in any county or city, and for a period of 30 days following that
declaration, an owner or operator of a hotel
or motel may not increase the hotel
or motel's regular rates, as advertised immediately
prior to the declaration of emergency, by more than 10 percent, unless
the owner or operator can prove that the increase in price is directly
attributable to additional costs imposed on it for goods or labor used
in its business, to seasonal adjustments in rates that are regularly
scheduled, or to previously contracted rates.
So much for demand and supply theory!
Has a customer recently claimed loss of her fur
coat in your restaurant? Liability
for such losses is often premised upon the proximity of the coat to the
customer. If, for example,
the customer chooses to hang her coat on a hook within a few feet of her
seat then liability rarely attaches to the restaurant for its loss. A
sign, “Watch your overcoat, we are not responsible,” if conspicuous,
might get you off the hook, so to speak.
There are numerous criminal laws specifically
related to the travel and hospitality industry.
For example, any person engaged in the transportation of persons
by taxicab or other means of conveyance who knowingly misdirects a
prospective guest of any hotel,
inn, or similar, or knowingly takes such a prospective guest to a hotel,
inn, or similar different from that of his instructions from such
prospective guest is guilty of a misdemeanor.
Paying a driver to do so is also a misdemeanor.
We end with ways to mitigate the legal risks of the
tourism business.
(1) Know
the law and current legal trends. Read
trade books, journals and other publications closely aligned with your
business. Attend
conventions, particularly those sessions designed for risk management.
Adopt current policies, procedures and forms in writing which
take into account the applicable law, so that you and your staff have a
convenient source of such knowledge and safe practices.
(2) Audit
your operations and facilities for safety issues.
If one person has been hurt, or almost hurt, others will follow.
Don’t put off fixing safety issues coming to your attention.
Prior knowledge can be used against you in court.
(3) Ensure
that your personnel are properly trained, and that all training
incorporates review and use of your firm’s current policies,
procedures, and forms.
(4) Check
that your vendors, subcontractors, and other business partners are, and
remain, properly licensed, reputed, and insured.
Deal only with those who are financially stable.
(5) Agreements
are very important. Have a
written agreement with everyone you deal with paying particular
attention to performance standards and rights to terminate for breaching
same. If this is your first
exposure to a particular type of agreement, seek legal counsel. It is a good investment.
You won’t make large mistakes on the first of this particular
type of agreement due to ignorance of the legal risks involved.
In addition, you will know how to do these transactions routinely
in the future without legal counsel, unless you are presented with a
significant departure from previous terms and conditions that you are
not sure about.
(6) Procure
and maintain good insurance coverage.
Review the policies carefully to determine if they really cover
the types of specific risks your tourism business entails.
Obtain riders for significant risks not covered by the policies.
(7) If
you have not already done so, investigate the feasibility of placing
your tourism business assets and risks inside of a limited liability
entity, such as a corporation or limited liability company.
Bon voyage!
Caveat:
The purpose of this article is to provide information, rather than
advice or opinion. It is accurate to the best of my knowledge as of the
date of the article. I have no duty to update this article. The
information, examples and suggestions presented in this article have
been developed from sources believed to be reliable. This article should
not be viewed as a substitute for the guidance and recommendations of a
retained professional and should not be construed as legal or other
professional advice. In addition, I do not endorse any actions addressed
herein, unless they are produced or created by me. I recommend
consultation with me or other competent legal counsel and/or other
professional advisors before applying this material to any particular
factual situations.
