Careful - It's Loaded!

OK, I'll admit it. I have a real prejudice. Certain things ought to be banned from use! This time I thought we'd look at some highly inflammatory stuff. Stuff that can really burn you.

 

Story by Matt Crouch

A word! Yes, a “mere” word that can mean all the difference. A word that is loaded with legal meaning. A word that is so often brandished about by meetings and event folk with little understanding of just how volatile that word is and just what damage it can cause when it explodes in your face…

I am well aware that the preceding paragraphs sound just a little hysterical – but it’s a deliberate attempt on my part to attract your attention. Now that I have it, let me calmly explain the need for caution with this commonly heard expression – “Partner”.

Partner is a commonly used expression in the meetings and events space, and in business tourism. Service providers often need to collaborate with others to provide a combined service or a package of services. It is very common for suppliers to refer to each other as their “partners”. It creates a nice, cosy sense of collaboration – that each business has an intimate relationship with the other and is, in a sense, “embedded” with the other. Sometimes businesses even like to refer to their relationship with their customers as a “partnership”. In fact this is one of the most “loaded” expressions of all. It has a very specific and potentially very dangerous legal meaning. A “partnership” is characterised by the concept of joint and several liability. This means that each partner is liable for the acts and omissions of the other partners. If one partner is negligent and causes someone loss, all partners are liable for that negligence and all can be sued for the loss.

A good way to remember this is to remember the motto of the three musketeers – “All for one and one for all”. Each partner can be sued alone for the entire loss, or together with the other partners.

To put this in context, an event manager should not normally refer to the various event suppliers as “partners”. This will give the event host (the event manager’s client) the impression that the event manager is jointly and severally liable for the acts and omissions of the suppliers.

If something goes wrong – say a loose electrical lead supplied and installed by an independent AV supplier causes someone to trip and seriously hurt themselves – it goes without saying that the event manager would not want to carry liability for this, and why should it? But the injured party may have been led to believe that the event manager is in partnership with the AV supplier.

The event manager may correctly reply “We are not actually in a partnership with the AV supplier.” But if the language used by the event manager implies a partnership and makes the customer believe there is a partnership, the event manager may have a case to answer.

The event manager doesn’t want to have to defend a claim that it is liable for the AV supplier’s negligence – to say nothing of the fact that the event manager’s insurance may not cover it for liability caused by the actions of the AV company.

As a general risk management principle, it’s a good idea to avoid being liable for the actions or omissions of others. It is a good idea to avoid using the words “partner” and “partnership” unless you really mean to convey that the partners are liable for each other.

Now, I don’t mean to suggest that the mere use of the word “partner” will automatically mean that a partnership is implied – as always there will be arguments both ways. The point is that it is easy enough to avoid using the word and avoiding the argument!

What alternative expressions can be used? If you really want to use terminology that suggests a deep and commercially intimate relationship with the other businesses that you collaborate with, I suggest you describe the relationship as a “strategic alliance” or refer to them as “affiliates”. Better still, refer to them as “independent contractors” and you’ll convey a meaning that doesn’t imply joint and several liability at all.

Another expression to be “handled with care” is the word “agent”, and we’ll delve into that high explosive another time.

For further details contact Matt Crouch on (02) 8281 7800 or email mcrouch@bartier.com.au.