1. LIABILITY ISSUES FOR ROTARY CLUBSRisk Management2004 District 7810 Conference G.R.BASQUE, Q.C. MONCTON ROTARY CLUB May 15 2004

2. Housekeeping: • Only scratching the surface • No time to go into any depth on any subject • Do not consider this as legal advice • Specific advice will depend on specific situation • Congrats to Convention Committee for their initiative • Don’t shoot the messenger • This is why people hate lawyers! • Something to think about

3. WHAT! I’m being sued? • Society is increasingly litigious • People more and more prepared to sue • Even Canadians • People are more aware of their rights • Lawyers take “shotgun approach” • “Deep pockets” thinking • Cost of defence can outstrip damages • No “charitable” exemption in Canada SUED FOR WHAT?

4. Potential Liabilities • Weekly meetings • Food poisoning • Injury • Theft of goods • Defamation by a speaker / member • Human Rights violation • Sexual harassment by a member • Hotel / Restaurant staff • Club staff • Other member

5. Potential Liabilities • Youth exchange • Injury or death • In the course of a Rotary activity • On the way to the meeting in Rotarian’s vehicle • In a host family vehicle, at the host’s home, on a host family activity • DUI, swimming pool accident, etc. • Serious illness • Accusation of assault on the student by a Rotarian • Host parent / sibling • Accusation of harmful activity by the student • Against a Rotarian or a Rotarian’s family • Against a third party • Improper supervision • Pregnancy, STDs, alcohol, drugs, criminal activity

6. Potential Liabilities • Group study exchange • Injury or death • Serious illness • Improper conduct by a Rotarian • Improper conduct by the exchange member • Criminal • Tort • Other • Against a Rotarian’s family • Against a third party

7. Potential Liabilities • Employees • Termination • Constructive dismissal • Harassment by officer or director • Source deductions for C.P.P., E.I. and income tax not remitted to Revenue Canada • Motor vehicle accident of a Rotarian in the course of doing work for the Club • DUI • Contracts or checks not signed properly • Overreaching in contracts • Potential liability to members

8. Potential Liabilities • Fundraising or other club activities • Failure to meet commitments • Debts to funding partners • Injury during the activity • Injury as a result of the activity • Food poisoning • Defective product • Host liability issues • Accident with DUI as a result of consumption at the activity • Defamation • Human Rights violations • Privacy issues • Environmental problems caused by the activity

9. Potential Liabilities • Privacy issues • Now a major consumer concern • Are you privacy compliant? • Web site • Files • Information collected during fundraising activities • Canada: PIPEDA; US: Safe Harbor Legislation • “Commercial Activity means any particular transaction, act or conduct or any regular course of conduct that is of a commercial character, including the selling, bartering or leasing of donor, membership or other fundraising lists”

10. Potential Liabilities • Director’s liabilities • Source deductions • G.S.T. \ Sales taxes • Certain wages due to employees • Breach of statutory obligations • Filing annual returns, tax returns, etc. • Breach of common-law obligations • CARE, SKILL, PRUDENCE, DILIGENCE, HONESTY, AND GOOD FAITH • Exceeding authority in bylaws

11. HOW’YA DO’IN

12. Liability Solutions • Incorporate • Unincorporated association means potential liability for individual members • Insurance cannot cover everything • Insurance • Blanket liability and/or specified perils • Motor vehicle (excess) • Directors’ liability • Health • Students, exchange members • Have a broker do an insurance review

13. Liability Solutions • Weekly meetings • Insure location has insurance • Is it wheelchair accessible? • Rotarians and host families who interact with students and exchange members • Should be screened • Consider police checks • Should there be training? • How to handle difficult cases • Alcohol issues • Should they enter into a “contract”? • Should you ever be one-on-one?

14. Liability Solutions • Structural safeguards • Don’t leave coat check, valuable equipment, etc. unattended • Policy issues • Code of conduct • State unequivocally principles of mutual respect, zero tolerance of harassment, etc. • Fixed term contracts for employees • Make sure Revenue Canada is paid first, employees second

15. Liability Solutions • Careful of the contracts you take on • Understand how contracts and cheques are to be signed: • “Your Rotary Club Inc. Per: President Per: Treasurer”

16. Liability Solutions • Director’s liability • Insurance • None available for environmental issues!! • Indemnity clause in bylaws • Annual ratification motion • Stay within authority of bylaws • Understand director’s obligations • Get a lawyer to do a session for you • Declare conflicts of interest • Watch statutory obligations • Remittances, annual returns, environment • Not just for your CV: Read your materials! Go to meetings!

17. Liability Solutions • Report environmental issues, if they happen • Deal with harassment issues immediately • Deal with Human Rights issues immediately • Have a lawyer do a “liability check-up” • Do a “privacy check-up” • Are your databanks secure? • Electronic and paper • Are your files secure • Members’ financial information

18. Questions?

19. FORBES ROTH BASQUE L A W Y E R S - A V O C A T S P.O. Box 480 Suite\Pièce 300 – 814 Main Moncton (N.B.) E1C 8L9 Tel: 506 857 4880 Fax: 506 857 0151 grbasque@forbesrothbasque.nb.ca