Q: Our agency has a small division that specializes in tours to an increasingly popular Third World destination. We contract directly with a ground operator and several resorts. None of those companies has an office in the U.S., and they do no business in the U.S. except through a few travel agencies like ours. If a client is badly injured at one of the resorts, how likely is it that we will get sued? If it is fairly likely, what can we do to deter such suits or avoid going broke if we do get sued?
A: An aggressive personal injury attorney in the U.S. would almost definitely sue your agency as well as the resort. The attorney's instinct will be to sue everyone in the chain of sale and hope that someone will be proved liable.
Since the resort would probably have no assets in the U.S., a judgment against the resort would be almost worthless. Therefore, the attorney would try very hard to construct a case against your agency.
The lengths to which an aggressive attorney will go are illustrated in a pending case in federal court in Philadelphia called Yuschak v. Los Altos Beach Resort, et al. In that case, a family of four was allegedly badly hurt when the vehicle taking them from the resort's lobby to its private beach crashed.
The judge twice dismissed the claim against the tour operator, since there was no allegation about any material fact that the operator failed to warn about or investigate. However, the judge allowed the plaintiffs to file a third complaint with more specific allegations.
Last month, the judge declined to dismiss the third complaint, holding that the new allegations were sufficient to allow the case to move forward, which was no doubt a big disappointment to the operator.
Although the plaintiff's attorney cited no less than 15 theories under which the operator was allegedly negligent, almost all were obviously frivolous. The specific allegation that survived dismissal was the agency's alleged failure to warn that the resort had a "practice of hiring unskilled drivers who were inexperienced with the hazardous roadways local to Los Altos."
To win their case, the plaintiffs will have to prove that the resort had that practice and that the operator either actually knew of it or should have known of it because it had a duty to investigate the resort's hiring and training of its drivers. Although this sounds utterly preposterous to anyone in the travel industry, the case is going forward, and the plaintiffs are hoping that they can find some evidence to support their claim.
The lesson here is that, in the case of injuries, an aggressive personal injury attorney and a lenient judge can keep a case going for months or years, costing the agency tens or even hundreds of thousands of dollars in legal fees, even if the agency ultimately wins.
Since an errors-and-omissions policy will cover your legal fees if a suit alleges that your negligence resulted in injury to a client, all tour operators and agencies that arrange tours on a regular basis ought to get errors-and-omissions coverage. In addition, you need appropriate disclaimers, and you need to offer medical insurance. Even if the clients decline the insurance, they are less likely to sue if you offered it.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].