Risk Management: Vetting Your Independent Contractor

By Doyice Cotten

The general rule is that a business entity is liable for injuries resulting from the negligence of the business or its employees. The business, however, is not generally liable for injuries caused by the negligence of independent contractors working.

Nevertheless, the business entity does have an important duty in regard to engaging an independent contractor – the duty to take care and do due diligence in the hiring (and retention) of the independent contractor. In a recent case (Smolnikar v. Royal Caribbean Cruises, LTD., 2011 U.S. Dist. LEXIS 63446), the cruise line was sued for an injury to a passenger that occurred while the passenger was on an onshore zip line tour. The passenger claimed the zip line company (Chucka Caribbean Adventures, LTD.) was negligent. Of course, Royal Caribbean cannot be held liable for negligence by such an independent contractor. The passenger, however, sued Royal Caribbean alleging that Royal Caribbean was negligent in selecting and retaining Chucka as its tour operator.

Fortunately, Royal Caribbean had investigated Chucka carefully and was able to provide evidence of having done so. Evidence provided to the court included:

(1) that Royal Caribbean had an incident-free relationship with Chukka dating back 4-5 years before offering the Montego Bay tour;

(2) that it had never been made aware of any accidents occurring on any of Chukka’s other tours;

(3) the positive feedback received from Royal Caribbean passengers who participated in Chukka’s other tours;

(4) Chukka’s reputation as a first-class tour operator;

(5) that a zip line expert had assisted in designing and building the Montego Bay zip line excursion;

(6) that Chukka had operated both the Montego Bay and Ocho Rios zip line tours without any problems, albeit for a limited period of time;

(7) that at least two other major cruise lines had been offering the Montego Bay zip line tour for approximately a year;

(8) that it had sent representatives to participate on the tour and there was no negative feedback;

(9) that Chukka met the requirements of Royal Caribbean’s “request for approval” process, including the insurance requirement;

(10) that it had not received any comment forms or surveys from its passengers indicating, in any way, that Chukka was unfit to operate the Montego Bay tour;

(11) that none of its own representatives had witnessed any accidents during the zip line tour;

(12) that it never received any accident reports from Chukka pertaining to the Montego Bay tour, and

(13) testimony establishing that Chukka conducted its own semi-annual inspections of the tour.

 The negligent selection and retention claim against Royal Caribbean was dismissed.

Although the reader may not run a cruise line, managers of just about every sport-related business hire an independent contractor at one time or another. Make sure the contractor is qualified and competent before you hire him or her; and if this is a long term appointment, make sure you conduct some type of evaluations over time. If evidence shows that the work is not satisfactory, you have a legal obligation to replace the contractor.

Photo Credit: Thanks to Grand Velas Riviera Maya at http://www.flickr.com/photos/grandvelasrivieramaya/3179398461/sizes/n/