INSIGHT: Avoid E-Scooter Claims with Carefully Drafted Contracts

Sept. 30, 2019, 8:00 AM

Low cost, accessible e-scooters have become popular among environmentally conscious urban commuters. As the popularity of e-scooters increases, so have criticisms about safety, product defects, and the enforceability of exculpatory clauses in user agreements.

Although some e-scooter companies have adopted best practices for safety by including training modules with their apps and even giving away free helmets, the alarming rate at which riders and non-riders are injured because of e-scooters presents valid concerns about their continued use as an alternative mode of transportation.

Injury and Exposure to Liability

The rate at which e-scooter riders have sustained broken bones and head injuries prompted a study by the Center for Disease Control (CDC) in conjunction with the Public Health and Transportation Departments in Austin, Texas.

Researchers evaluated over 182,000 hours of e-scooter use, in excess of 891,000 miles ridden and over 936,000 e-scooter trips. The research team calculated that roughly 20 individuals were injured per every 100,000 trips taken during the three-month study from September to November 2018. Of those injuries, approximately half were head injuries which could have been prevented by wearing a helmet.

Although the Austin study was the first to be overseen by federal epidemiologists, other studies have yielded similar results. The University of San Diego (USD) Medical Center tracked severe injuries reported in its trauma center between September 2017 and March 2019 where 42 patients were admitted for e-scooter related injuries.

The study revealed that 98% percent of injured patients were not wearing a helmet, 48% had a blood alcohol level above the legal limit for intoxication and 52% tested positive for an illicit substance.

Some injured riders have claimed that the scooter itself was defective, complaining of uncontrollable acceleration due to sticking throttles, faulty brakes, front wheel lock and defective handlebars. E-scooter companies encourage riders to report problematic equipment, but the quick and convenient transfer by riders presents concerns about the maintenance of the equipment once the e-scooter is in use and potentially misused by other riders.

Lime has attempted to combat this issue by releasing an upgraded Gen 3 model with stronger safety features like bigger wheels and extra rear brakes. Bird has also made improvements to its design by eliminating exposed screws to prevent vandals from dismantling scooters and by adding puncture proof tires.

Defense to Product Defect Claims

In most jurisdictions, misuse of the equipment after it has left the manufacturer’s control is a valid defense to product defect claims. However, a manufacturer’s prior knowledge of misuse or an e-scooter rental company’s failure to properly inspect and maintain the units can expose them to liability.

Some e-scooter companies dispatch independent contractors to inspect and repair e-scooters when notified by riders of issues and when the e-scooters are collected for charging.

To limit exposure to product defect claims, e-scooter companies should evaluate their inspection and maintenance programs to ensure that they sufficiently identify and remedy potential problems.

Manufacturers should consider technology that alerts riders to an issue, just as a motor vehicle alerts drivers if the oil is low or if the engine needs checking. The newly released Bird Two incorporates technology such as self-reporting damage sensors that alert Bird mechanics to issues in need of repair.

Validity of Exculpatory Clauses

Most e-scooter apps contain lengthy terms and conditions which limit the company’s liability for personal injury and property damage and require claimants to forgo their right to a trial by jury in favor of binding arbitration. These liability waivers often include a cap on recoverable damages.

The majority of jurisdictions hold that where a plaintiff signs an express contractual assumption of risk before injury, the plaintiff’s recovery is barred because the defendant breached no legal duty to the plaintiff. However, some states are looking to combat this tenet of contract law due to public policy concerns.

For example, Louisiana, Virginia, and Connecticut refuse to enforce these liability waivers as void against public policy. See, Ramirez v. Fair Grounds Corp., 575 So. 2d 811 (La. 1991); Heitt v. Lake Barcroft Commty Assoc., 418 S.E. 2d 894 (Va. 1992); Hanks v. Powder Ridge Restaurant Corp., 276 Conn. 314 (2005).

Most jurisdictions either by common law or statute will limit enforceability of such waivers in a claim of gross negligence. See, Cal. Civ Code § 1668; La. Civ. Code Ann. Art. 2004 (1985); Montana Code Ann. §28-2-702; Barnes v. Birmingham Intern. Raceway Inc., 551 So. 2d 929 (Ala. 1989); McShane v. Stirling Ranch Property Owners Ass’n Inc., 393 P.3d 978 (Colo. 2017); Adams v. Roark, 686 S.W. 2d 73 (Tenn. 1985).

In many jurisdictions, exculpatory provisions in the user agreement need not contain specific language, but they must be sufficient to apprise the party of the effect of signing the document.

Generally, while an enforceable release does not need to mention every conceivable risk within its intended scope or the specific risk that caused the plaintiff’s injury, the negligent act must be reasonably related to the object or purpose of signing the release.

Clickwrap agreements, which require an app or computer user to consent to terms and conditions by clicking on a dialog box, have become increasingly common and routinely upheld. Hancock v. AT&T Inc., 701 F.3d 1248, 1256 (10th Cir. 2012); see also, Corwin v. NYC Bike Share LLC, 238 F. Supp. 3d 475, 481 (S.D.N.Y. 2017) (upholding a clickwrap agreement in a personal injury case).

While the enforceability outlook seems somewhat favorable for e-scooter companies in most jurisdictions, litigation involving these new products is only just beginning.

E-scooter manufacturers and rental companies should stay abreast of current technology while also ensuring that their contractual language and inspection and maintenance programs protect them from potential liability.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Brannon Arnold is a partner in the Atlanta office of Weinberg, Wheeler, Hudgins, Gunn & Dial LLC where she practices civil litigation with an emphasis on product liability, catastrophic injury and professional liability. She represents a broad range of clients in cases involving serious injury and wrongful death across the country.

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