The MacNeil/Lehrer Report; Skiiing Liability

ROBERT MacNEIL: Skiing has always been considered a risky sport. After a weekend on the white winter slopes, many a skier has returned home with a white plaster cast. The pressures of skiing demand conditioning, training, and skill. Even for the accomplished skier, taking a spill is common. But what`s also becoming common, is growing debate over who should pay the costs when a fall results in serious injury.

(Music.) Good evening. If you`re a skier about to take off for the hills this weekend, maybe you`ve thought about who pays if you fall and hurt yourself. The skiing industry is thinking a lot about skiers like this these days, all because of a young man called James Sunday. Back in 1974, James, then 21, and a novice skier, was working his way down a hill at Stratton, Vermont. His ski caught on some underbrush; he hit his head on a rock; and was permanently paralyzed from the shoulders down. That injury has thrown ski operators into a worse flap than a winter with no snow. James Sunday sued Stratton Mountain Corporation for negligence, and was awarded 12 million dollars in damages. Stratton`s insurance company threatened to cancel ski policies unless the law were changed. So far, they haven`t carried out the threat, but ski operators fear that this landmark award may force insurance rates so high that it drives them out of business. Tonight, who is at fault when a skier gets hurt; and who should pay? Jim Lehrer`s off, and Charlayne Hunter-Gault is in Washington. Charlayne?

CHARLAYNE HUNTER-GAULT: Robin, skiing is a small industry in terms of the number of people who take to the slopes each year, and the industry`s growth rate has declined sharply in recent years. But there are still roughly 8 million people hanging in there, and their equipment, resort facilities, and all the other accouterments this past year made skiing a 3 billion dollar industry. In many states, like Vermont, income from the ski industry is critical to the areas economic health, generating revenues and jobs. Fearing that this latest crisis may affect all that, industry lobbyists and others are pressing state legislatures to pass laws to return the risk of skiing to the skier. Robin?

MacNEIL: This is a lift ticket, which a skier buys to use the ski lifts and the slopes. This one says that the purchaser understands that skiing is a hazardous sport, and that he accepts the hazards and the dangers of injury. In the past it`s been assumed that ski operators were responsible for getting you up the mountain, but the skier was responsible for getting himself down. But the Sunday-Stratton case has forced operators to seek legal clarification of the risk. Dave Moore is manager of the Mount TomSki Area in Holyoke, MA, and president of the Massachusetts Ski Area Association.

DAVE MOORE: Courts seem to have changed their opinions of who`s responsible for what in a place of business. We had a situation where skiing used to be the kind of business where most people who took it up realized there was some risk in it. Now people are starting to forget that fact, and beginning to wonder just who`s responsible for what with regard to personal injury in the ski area.

MacNEIL: What have ski operators like Dave Moore worried, is that insurance prices have already gone up steeply. In his case, at Mount Tom,500 per cent in five years. Operators say that this could result in prices so high for lift tickets that skiers would just stay away. The man who precedes Dave Moore as operator at Mount Tom is Cal Conniff. Mr. Conniff is now Executive Director of the National Ski Areas Association, with 600 members from 36 states. As the industry`s major trade association, the NSAA watches over the interest of ski operators. Mr. Conniff, how bad is the insurance situation now?

CAL CONNIFF: Over the past two years, insurance premiums have escalated two to three hundred per cent in ski areas across the nation.

MacNEIL: So that 500 per cent is a bit unusual.

CONNIFF: That`s quite unusual, really. It`s a two or three hundred percent bite or increase on the premium from a ski area operator -- it`s a substantial increase, and it`s become a very major part of the ski operator`s expense.

MacNEIL: Typically, what kind of money does an operator pay?

CONNIFF: As an example, the premium right now could cost as much as twelve cents out of a dollar -- ten to twelve cents out of every dollar that the skier has to pay to ski at that ski area.

MacNEIL: Now, that`s after the 300 per cent increase?

CONNIFF: That`s correct.

MacNEIL: And what is this doing to the industry?

CONNIFF: What it`s doing to the industry -- it`s got the area operator concerned about where this is going from here. We have seen these increases over the past two years. We`re wondering what it is going to be like a year from now, or two years from now. Are we going to go up another 200 per cent? And we do feel that if the insurance is increased, it is ultimately the consumer who pays this price, whether it be for a ski lift ticket, or anything one buys as a consumer.

MacNEIL: But if they brought those increases up to typically twelve cents on the dollar that the ski operator receives, that still isn`t crippling, is it?

CONNIFF: Oh, it`s not crippling, but we wonder where the end is. We`ve seen dramatic increase in the past two years, and we`re simply wondering where is the end to all this.

MacNEIL: Ski operators and the insurance companies have begun asking state legislatures for some kind of protection. What kind of protection are they asking for?

CONNIFF: The ski area operators are not asking for any protection that will circumvent the rights of the law by the consumer. We`re simply trying to establish by law, what the responsibilities of the skier are, once that skier leaves the ski lift and starts down a ski slope.

MacNEIL: And what are the responsibilities, in your association`s view?

CONNIFF: In our association`s view, that anyone that takes up the sport of skiing realizes that there is a risk. People wouldn`t ski if there weren`t a risk. This is the reason why people got into the sport of skiing. This is what the excitement is of the sport. They`re starting down that mountain, and it`s the element of excitement and risk that makes them take up the sport in the first place. And we feel that the vast majority of the skiers are willing to assume this risk. But once they start down that mountain, whether there be changing snow conditions -- and this happens very, very often -- there is very much on that mountain that is totally out of the control of the ski area operator. We can do just so much to do a better job than what mother nature gave us. But whether there be changing icy conditions, or a bare patch on the slope that is bound to come up in the spring when spring skiing takes place, the skier has to realize that they`re going to go into that sport, and start down that mountain, and they have to assume some of that risk. And I think the vast majority of the skiers on the mountains today are willing to do that.

MacNEIL: Thank you. Charlayne?

HUNTER-GAULT: When whizzing down the slopes on a downhill run, a skier may encounter bare spots, rocks, a tree stump, or numerous other obstacles. Is the skier responsible for the consequences because he made the decision to take the chance? Someone who`s been taking such chances for 30 years is Harry Brown. Once a competitive skier, Mr. Brown is now the Eastern Director of the United States Ski Association, a consumer group. It is also the governing body of all national skiing events. Mr. Brown, you`ve been through it. How much risk do you think a downhill skier should assume?

HARRY BROWN: I basically think that the downhill skier assumes totally all the risk involved in his skiing sport, except for those things I call gross negligence. I think the bare spots, the changing in terrain, the changing in the weather, the brush, rocks -- I think all part of the skiing experience. I think that skiing is a method of self-expression; I think you`re talking about things that are out of human control. We don`t have control over the weather; we don`t have control over the changes in terrain. And I think that the skier has to assume all the risks that are normal risks in the sport of skiing, in the downhill section of it, at least, except for those things which we would consider as gross negligence or things that the area operator could protect us from.

HUNTER-GAULT: Could you give me some examples of that?

BROWN: Oh, a recent accident where a snowcap backed over a skier. I think those are the types of things where the area operator can protect us. Another example would be if a tree had fallen in the trail, and the area operator was aware of the tree being in the trail -- it had been there two or three days. I think the ski industry, as a business, has to accept those risks -they do. And they have to get rid of those obstacles when they`re aware of them.

HUNTER-GAULT: So you think that marking obstacles that are even natural, like the falling of a tree, which the operator can`t prevent, is something the operator should do. You think he should tell the skier, in advance, that there are obstacles out there which are marked and to be aware of. Should he go that far?

BROWN: First, I think he can only mark those obstacles which he`s aware of. If he becomes aware of them, he marks them. I do think that we, as the skiers, and the area operator, have to explain to the skier what he is to expect in the skiing experience. I think we`ve got to educate him, and probably do a better educational program on the things that are going to be obvious and necessary and that he is going to encounter in the skiing experience.

HUNTER-GAULT: You say the skiing experience. Do you mean the particular slope, or just skiing in general?

BROWN: Skiing in general, Charlayne. I think that what I might expect of the skiing experience might be completely different than that of the person who`s never skied before and is skiing for the first time. I think it`s a job of the industry to educate that skier that perhaps skiing isn`t dangerous, but at least, these are some of the things you could encounter on the slopes and that you have to be prepared for these, and that you have to assume the risk for these inherent dangers in the sport.

HUNTER-GAULT: Fine, thank you. Robin?

MacNEIL: Because of the risks of the sport, are more skiers injured on the trail heading toward the courts? Attorney John Burgess handles many such ski-related cases. Mr. Burgess is a former president of the Vermont State Trial Lawyers Association, and is now a member of the Board of Governors of the American Trial Lawyers Association. Mr. Burgess, there is said to be some two hundred thousand skiing accidents a year. Are more skiers suing now, because of the Sunday -Stratton case?

JOHN BURGESS: Not because of Sunday -Stratton, but because of a new awareness on the part of the consumers. Mr. Brown says he represents the consumer, but there`s a new consumer. It`s not the professional 30-year skier, it`s the weekend skier, the young couple who will ski three times in a year. That consumer is really not represented by the organized skier. That consumer feels he has a right to be protected against the things that the ski area not only knows, but reasonably should have known, and didn`t tell him about. The little water hydrant that protrudes one-quarter inch above the snow. The stump that stuck up eight inches and is now covered with snow; he can`t see it. The ski area knew it was there, or should have known it was there. All of these things that are unseen and unseeable by the skier.

MacNEIL: Are these new skiers led to believe, by the advertising to attract them, that ski slopes are safer, more manicured, more sort of man controlled than, in fact, they are?

BURGESS: Of course they are. I`ve never yet seen an ad by my friends who run ski areas that said, "Beware! There are hidden dangers." They don`t tell them that. They say, come on up, have a great time; they show beautiful pictures, all of which are true, but, there are dangers lurking behind all that beauty, and nobody ever tells the skier.

MacNEIL: Well, on the other side, are most of the suits -- and you have a lot of experience with suits that skiers bring -- are most of the suits justified, do you find?

BURGESS: Most of the suits that are brought are justified. The number of claims that a lawyer gets where a skier writes and says, bring a suit, and the number he actually brings to court are two different numbers. It`s been our experience, certainly recently, that a great many people write in or come in and want to talk about a ski suit. But, when you get right down to the courthouse door, when you bring the suit -- if you`re a conscientious and able lawyer -- you do the thing correctly. You bring the suits that you think have a chance of winning. You sue when the ski area should have protected the skier and didn`t.

MacNEIL: What`s the proportion of the suggested suits that a lawyer like you finds himself rejecting?

BURGESS: We`re beginning to find that we turn down between 25 and 30 per cent of all the downhill claims that are presented to us. We just don`t take them.

MacNEIL: I see. Since skiing is such an important industry to many states, do you think the state legislatures will make the laws more with an assumption of risk by the skier?

BURGESS: Nobody, really, who`s studied the subject, opposes the doctrine of the assumption of the risk being put back in. But, you see, the real problem is not with the ski areas. The problem is with the insurance industry. The Sunday case, they claim, has made a crisis in skiing. It hasn`t made a crisis in skiing. It`s made a crisis in the dividend to the stockholders of the large insurance companies. One grain of sand doesn`t make a beach; one robin doesn`t make a summer; and one adequate award to a boy who`s paralyzed for the rest of his life doesn`t make a skiing crisis. It makes some insurance underwriters nervous, but it doesn`t make a skiing crisis.

MacNEIL: Okay, thank you. Charlayne?

HUNTER-GAULT: Will insurance companies be forced to charge higher skiing liability premiums? A man who has been monitoring the insurance world is Felix Kloman. Mr. Kloman is president of Risk Planning Group, an independent risk management and insurance consulting firm. Mr. Kloman, you`ve just heard Mr. Burgess say that there`s an unnecessary panic, or that you`ve created a crisis. Do you agree with that assessment?

FELIX KLOMAN: I`d have to say at the outset, that I do not consider myself an apologist in any way, shape, or form of the insurance industry. It certainly has been brutally kicked about during the past several years with the malpractice crisis for doctors and hospitals, with the current product liability crisis facing many manufacturers; and now we see it in the ski industry as well. I don`t think the insurance industry, particularly in the case of the ski industry has panicked. We performed a study on behalf of the National Ski Areas Association last year, where we looked at the ski plans that are currently in effect in terms of the insurance plans, and both of them, we found, were reasonably well administered, reasonably well priced, with a limited, if not nonexistent, profit on the part of the insurance companies. We found that the losses that were reported to the insurance companies were indeed in excess, in some cases, of the premiums that had been paid, and that the premiums that were being charged were reasonably justified. Again, I say that from my position, not being an apologist for the industry.

HUNTER-GAULT: Right. But you understand the process of the industry. And as I understand it, there are some eight to ten million dollars in annual premiums paid. This particular suit we`ve talked about, the Sunday suit, amounted to half a million dollars. Does that equalize the equation?

KLOMAN: The most recent figures from 1976 indicate there are about sixteen million dollars of insurance premiums for both property and liability insurance paid to the insurance companies. Of that, approximately eight to ten million dollars represent liability insurance. The figures show that the recent loss ratio, that is the losses incurred by the insurance company, as compared to the premiums they`ve received over a five-year span is running around seventy percent. Now, the insurance companies generally operate with an overhead/cost ratio of around thirty per cent, which means they`re not making any profit whatsoever. If you take the eight million dollars and add on another 12 million dollars in the Sunday case, you can see automatically that the insurance companies may be in a very negative position.

HUNTER-GAULT: Okay, let`s press another point quickly. Why do you think this legislation to put the weight on the skiers is needed? That is, to return the risk to the skiers.

KLOMAN: Insurance underwriters are a very conservative group of people. They underwrite on the basis of predictability. Where there is latent unpredictability--and the Sunday case indicates to them that they don`t know how many cases may be brought in the future with regard to downhill cases, nor how much might be paid for downhill cases--the underwriters say, "we`re scared," and legitimately. Perhaps they have to reflect the fears of their shareholders; they have to pull out of the marketplace.

HUNTER-GAULT: Thank you. Robin?

MacNEIL: Yes. Let`s pursue this. And just so that we know what we`re talking about, could I ask each of you what your assessment is, starting with you, Mr. Conniff, of what causes, statistically, most accidents the skiers themselves, or the operators, as it`s been adjudged in courts, and so on.

CONNIFF: Very definitely it can be proven that the skiers themselves cause most accidents.

MacNEIL: Up to what sort of percentage? Have you got any feel for that?

CONNIFF: I would say, at least seventy per cent of the accidents are caused by the skiers. They`re not using good judgment themselves. I think the ski industry, for years, has been telling the people that take up skiing to ski within your own ability. Don`t get out over your head and find you`re on a slope you can`t handle. And many people do this. We`ve told people for years -- as release bindings have come on the market, for example -that you must get those bindings checked, and you must get them checked frequently. We know, from surveys that have been run in recent years, that the vast majority of the people do not get their release bindings checked, although through publications and at the ski areas we constantly try to tell these people to do that. We know that release binding will go out of adjustment very quickly. But still, we can`t force the skier to do these things. In most cases, the accidents that do occur, are the fault, I think, of the skier.

MacNEIL: Do you agree with that, Mr. Burgess, from your point of view?

BURGESS: If you take all the accidents that occur, the statistics are right and the conclusion is correct, but all accidents that occur aren`t the ones that go to court. Most accidents don`t go to court. Let`s talk about the ones that are pursued in litigation, at least in the Northeast where I practice law. In the Northeast, most of the cases that go to court are either settled or result in a verdict for the plaintiff. That`s a fraction of all the accidents that happen. So, I don`t really disagree:, that about seventy per cent of all the people who fall down, fall down because they`re clumsy, they have problems, they don`t do their job. But, about thirty per cent of them are hurt for some reason other than that. End that`s the thirty per cent that we want to see the two companies that now offer insurance coverage beginning to bear their fair share on. I`m fascinated with these insurance statistics, and if you want, let`s talk about them now, Robin. Or do you want to come back to them?

MacNEIL: I`d just like to ask Mr. Brown: do you agree on the seventy per cent fault of the skier?

BROWN: I disagree. I think it`s higher, I think it`s much higher. I think that the skier controls his destiny when he gets from the top to the bottom. In the isolated case -- and these are the cases that attorney Burgess is trying -- where the ski area is held at fault -- let`s not talk about product liability in terms of what created the accident from a product standpoint, but just from the ski area standpoint -- I`m willing to say that it`s up in the ninety per cent bracket, and not in the seventy as Cal said. Secondarily, along that whole line of the skier taking it, the small per cent that are the ski area`s fault, if we could handle those cases with the lowest possible transactional cost, and keep them out of court and perhaps come up with some responsibilities that the skier has, and some that the area has, and if the area violates those responsibilities, then there is a way, other than our present judicial system, to handle them. And that lowers the transactional cost, which lowers the cost to me as a skier.

MacNEIL: Have any significant awards been given to skiers who`ve injured themselves?

BURGESS: Not to my knowledge. And I`m still waiting for anyone at this table to document one where it happened. The jury made a determination, for there isn`t any award, that the area was at fault. Now, someone may disagree, but this theory that we`re going to take it away from the courthouse, that we`re going to put it someplace else -- you know, when you take away the citizen jury, you turn it over to the "Good Hands" people and they have a vested interest in keeping that award low. The jury, on the other hand represents the conscience of the community in determining fault. That jury system has served us very well. And now the great hue and cry: we can`t trust the jury! Let`s take it away from those Vermont`s and those folks in Colorado; let`s turn it over to the folks in Hartford.

MacNEIL: Why should all ski operators around the country be penalized by rising insurance rates if there are just a few operators held negligent in court cases that then prompt higher premiums, such as we`ve been hearing about?

KLOMAN: The actual rates vary considerably from one section of the country to another. Matter of fact, in the Rockies, the rate is a lot lower, and I would assume, part of that is a result of the fact that the skiers are more experienced out there. Unfortunately, like it or not, in and around New York City and major metropolitan areas we`re dealing with skiers who tend to be more litigious. One of the factors that came out in our recent study is the defense cost of many of these claims runs fifty per cent of the final adjudicated claim.

MacNEIL: Is that because skiers are suing more? Or is everybody suing more?

KLOMAN: Everybody. I think this is a social problem that we`re facing in this country, not just in the ski areas. That`s why I mentioned the hospitals, and malpractice, and product liability. There`s a social malaise and perhaps a restatement of personal accountability that we have to face in our society.

BURGESS: Robin, let`s talk about accountability. We`ve been running around a simple point. There are two principle ski insurers: American Home and a subsidiary of Lloyd`s of London.

KLOMAN: It is Lloyd`s of London, not a subsidiary.

BURGESS: So it is Lloyd`s directly. They`ve finally come out from behind the bush. But the owner of American Home is C. V. Starr and Company. C. V. Starr is a holding company. C. V. Starr also owns sixty per cent of Vermont`s largest ski area, the Mount Mansfield Company. Now, they, on the one hand, say, we`re going to cancel our own insurance coverage if you don`t give us a break. There`s a kind of corporate incestuous about that, that I think we`ve got to lay right out on the table for the audience and let them know what`s going on. The liability insurance industry, according to its own figures, in the first half of 1977, made a two billion dollar profit. Now, this is not some poor struggling little industry that`s starving to death. And the fascinating thing is, that when they talk about their 16million dollars worth of premium, and then build in the cost, one of the costs they build in is reserved for a possibility that may never happen.

MacNEIL: We don`t have anybody from that company here to reply. Do you care to say anything on their behalf?

KLOMAN: I`ve attacked the American Home frequently, and now I find myself apologizing for them. We have looked at the reserves. We do not think that the reserves of the American Home and its administrator are overstated, nor do we think that the reserves established by Lloyd`s of London are overstated. As a matter of fact, in some instances, I think they are seriously understated.

MacNEIL: Okay. Can we leave this point now, since we can`t resolve it? Charlayne?

HUNTER-GAULT: Okay. Just quickly. We`ve talked a lot about the irresponsible skier; what about the irresponsible ski owner? Is there any area there that ought to be probed? Say, for example, inspection practices and so on -- are they outmoded; are they up to date? Mr. Conniff?

CONNIFF: For many years -- in fact it was the ski industry itself that some thirteen or fourteen years ago developed the American National Standards as to the B-77 code. This code was for the industry to police itself on the safe operation, the construction, and maintenance of the ski lifts in this country, because we wanted the ski lifts in this country operated as safely as possible for our skiers. And I believe that, as an industry, we are doing a good job in policing our industry in this respect. If we know of a ski area operator that is not doing the job right, particularly in the operation of his lifts, we take a very dim view of that.

HUNTER-GAULT: Okay, fine. I`d like to get some more opinions on that, but we`re about to run out of time, and I would like to ask you, in the event that the industry gets the legislatures to approve returning the risk to the skier, what do you think the future patterns are going to be for this? For example, there will still be opportunities for lawsuits. What`s going to happen to the industry. Let`s start with you, Mr. Burgess.

BURGESS: The ski industry will survive if the insurance industry is willing to let it, just like the doctors survived once truth came to the malpractice area. What we need to do is break the monopoly of two companies and make all companies who write liability insurance-in a given state offer ski area liability.

HUNTER-GAULT: Thank you. I`m sorry, we have to move along. Robin?

MacNEIL: Time ran out a bit faster than we expected. Sorry. Thank you all very much for coming. Good night, Charlayne.

HUNTER-GAULT: Good night.

MacNEIL: That`s all for tonight. We`ll be back on Monday night. I`m Robert MacNeil. Good night.