Liability

txflyer

txflyer

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Inspired by Unit74's thread where he woke up a new customer to flying, I want to take people flying and try to turn them on, but I'm scared ****less of it.

I did not come all this way to be sued back into the stone age.

More than one attorney has said to me that basically they can wipe their backside with any release form. Especially a minor. That's about what liability release forms are worth. How do you mitigate this liability? You don't? You can't? You can somehow? Maybe LLC owns the plane? School me.



Thanks in advance ... :)
 
txflyer said:
Inspired by Unit74's thread where he woke up a new customer to flying, I want to take people flying and try to turn them on, but I'm scared ****less of it.

I did not come all this way to be sued back into the stone age.

More than one attorney has said to me that basically they can wipe their backside with any release form. Especially a minor. That's about what liability release forms are worth. How do you mitigate this liability? You don't? You can't? You can somehow? Maybe LLC owns the plane? School me.



Thanks in advance ... :)
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Stop flying
 
Insurance.

LLC only helps if you're not the one flying in the event of an accident. If there's an accident, the owner (LLC) and the Operator (pilot) are "jointly and severally liable", basically meaning that you can sue, either, or both, and collect some or all of any judgement from either or both. Where an LLC helps you is if someone else is flying your plane.
 
txflyer said:
Inspired by Unit74's thread where he woke up a new customer to flying, I want to take people flying and try to turn them on, but I'm scared ****less of it.

I did not come all this way to be sued back into the stone age.

More than one attorney has said to me that basically they can wipe their backside with any release form. Especially a minor. That's about what liability release forms are worth. How do you mitigate this liability? You don't? You can't? You can somehow? Maybe LLC owns the plane? School me.



Thanks in advance ... :)
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Just quit being scared and have some faith, that's all you can do. Typically, unless you do something egregious, as long as you carry the 'standard coverages' you will not be held liable for more than the insurance.
 
JeffDG said:
Insurance.

LLC only helps if you're not the one flying in the event of an accident. If there's an accident, the owner (LLC) and the Operator (pilot) are "jointly and severally liable", basically meaning that you can sue, either, or both, and collect some or all of any judgement from either or both. Where an LLC helps you is if someone else is flying your plane.
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Thanks. That's a good concise answer. :)
 
Insurance, training, proficiency, and good judgment. And as noted by your attorney friend, those "hold harmless" agreements are generally not a viable part of the solution. Ask around to see how many pilot you can find who were financially wiped out by an aviation accident lawsuit, and if you can find one, see how those four items I mentioned (or more accurately, lack of one or more of those four) played into the equation.
 
txflyer said:
Inspired by Unit74's thread where he woke up a new customer to flying, I want to take people flying and try to turn them on, but I'm scared ****less of it.

I did not come all this way to be sued back into the stone age.

More than one attorney has said to me that basically they can wipe their backside with any release form. Especially a minor. That's about what liability release forms are worth. How do you mitigate this liability? You don't? You can't? You can somehow? Maybe LLC owns the plane? School me.



Thanks in advance ... :)
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Do any of these attorneys have any experience with aviation litigation? The answer to whether a hold harmless agreement has any value depends on your jurisdiction. In California they have quite a bit of value. Are you signed up for the AOPA legal program. If so, you can get an hour of lawyer time to address the issue in your jurisdiction. Also, if you are an EAA member, the Young Eagles program provides you with both a hold harmless and an additional $1M of insurance.

BTW, if it matters, I have a dozen years of experience doing aviation litigation and have defended a flying club in a Young Eagles case. The case was settled without any money from the pilot or owner of the aircraft.
 
Don't live your life in fear.

If someone really wanted to sue you tomorrow, some scum bag lawyer could find some reason to drag you into court, that's just life in a 1st world country.

Just do you thing, do what's safe and prudent, document things, and take life as it comes.
 
Kristin said:
Do any of these attorneys have any experience with aviation litigation? The answer to whether a hold harmless agreement has any value depends on your jurisdiction. In California they have quite a bit of value. Are you signed up for the AOPA legal program. If so, you can get an hour of lawyer time to address the issue in your jurisdiction. Also, if you are an EAA member, the Young Eagles program provides you with both a hold harmless and an additional $1M of insurance.

BTW, if it matters, I have a dozen years of experience doing aviation litigation and have defended a flying club in a Young Eagles case. The case was settled without any money from the pilot or owner of the aircraft.
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Thanks.

I don't know if any of the attorney's I have have ever litigated an aviation case.... How we got on the subject is we own quite a bit of land and I was talking to them about hunters and release forms.

I'm curious, did either the pilot/owner of the incident hold large assets personally? I would think that makes a difference in the tactics of the attorney and his client. I don't want to come off sounding gosh, but we have much much more to attach than one million.
 
txflyer said:
Thanks.

I don't know if any of the attorney's I have have ever litigated an aviation case.... How we got on the subject is we own quite a bit of land and I was talking to them about hunters and release forms.

I'm curious, did either the pilot/owner of the incident hold large assets personally? I would think that makes a difference in the tactics of the attorney and his client. I don't want to come off sounding gosh, but we have much much more to attach than one million.
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The pilot had substantial assets, as I understand it. In California the plaintiff can't obtain discovery into the assets of the defendant until they obtain a judgment. Now some is public record. If Harrison Ford crashes on a Young Eagle flight, then obviously the plaintiff's attorney is going to know that there are assets there. But if someone's assets are stock in a corporation, even a closely held one, it may not be obvious to a plaintiff's attorney that there are assets to be gotten.

Plaintiff's attorneys like insurance policies, and will usually settle for the insurance policy unless the case against the defendant is strong and there is a strong indication of available assets. One of the first lessons a new plaintiff's attorney learns is that it is one thing to obtain a judgment, but it is another to collect it. The attorneys do not want to get into the collection business where they have to try to seize and liquidate assets.

If you have substantial assets, then you need more than $100K a seat that most insurers like to sell. At a minimum, you need $1M with no sublimits. In the trade jargon, that is referred to as one million smooth. Above that you can either buy higher limits or obtain an excess policy over that. I don't know about Texas, but it is pretty hard to get over $1M for a child unless they are severely injured and will need life care. Those and burns are the scary ones. They are also quite rare, fortunately.

We don't think about it because driving is common place, but you stand as good or a better chance of doing damage with your car that exceeds the limits on your policy. It is not a worry if you don't have much in the way of assets, but if you do have assets, then there is no such thing as 100% protection.

If hold harmless agreements haven't been clearly ruled to be unenforceable in your jurisdiction, then they have some value. They add a level of uncertainty for the plaintiff. Lets suppose you take a kid for a ride, and a crash ensues. Lets assume that the kid is paralyzed and his claim is worth $2-3M. You have $1M worth of insurance and assets exceeding the difference. Without the hold harmless, the family might go after you personally if liability is clear and there are no other defendants. But with the hold harmless, there is a risk that the court will uphold it, and the family gets nothing to help take care of the kid. With the risk of zero, the sure thing of the $1M, which believe me the insurance company will offer up immediately, might be irresistible. Especially when you think that taking it to trying, might cost $300,000 which will come off the top.

As you are in a fortunate position of having something to protect, whether you ever have anyone in your plane or not, you need some knowledgeable advice on how to minimize your risk. A hold harmless agreement can be one part of the strategy. Incorporating the aircraft may or may not make sense. Incorporating other assets might also make sense. Having enough insurance is always a key part of the equation. It is worth your investing a few shekels to minimize your exposure.
 
Richard said:
I do not understand the above sentence. Clarification please.
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If there is a chance that the court will uphold a waiver of liability/hold harmless agreement that a passenger signed, then a plaintiff has the potential going into a case of getting zero, even is the pilot would have been found to be negligent. Put yourself in a parent's position with a 12 year old who will be in a wheelchair for life. You have an offer from the insurance company of the pilot, for the policy limits of $1M, in our hypothetical. If you go to trial, you may get $2-3M, or you might get nothing if the court grants the defense motion to dismiss based on the hold harmless agreement. Given the costs and uncertainty of a trial, even without a hold harmless agreement, do you take the $1M and run? IMX, most of the time the plaintiffs will settle, on the advice of their attorney, in a similar situation as that which I used for an example here.
 
Kristin said:
If there is a chance that the court will uphold a waiver of liability/hold harmless agreement that a passenger signed, then a plaintiff has the potential going into a case of getting zero, even is the pilot would have been found to be negligent. Put yourself in a parent's position with a 12 year old who will be in a wheelchair for life. You have an offer from the insurance company of the pilot, for the policy limits of $1M, in our hypothetical. If you go to trial, you may get $2-3M, or you might get nothing if the court grants the defense motion to dismiss based on the hold harmless agreement. Given the costs and uncertainty of a trial, even without a hold harmless agreement, do you take the $1M and run? IMX, most of the time the plaintiffs will settle, on the advice of their attorney, in a similar situation as that which I used for an example here.
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Thank you.

Also, of note, at least in CA in a civil case, as I understand it, if an offer to compromise (settlement) is rejected by plaintiff, and they later do not prevail, they get nothing but also are required to pay court costs including (I believe) att fees. This is tangential to the thread subject but worth noting.
 
Richard said:
Thank you.

Also, of note, at least in CA in a civil case, as I understand it, if an offer to compromise (settlement) is rejected by plaintiff, and they later do not prevail, they get nothing but also are required to pay court costs including (I believe) att fees. This is tangential to the thread subject but worth noting.
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It's generally not all the attorney's fees, it's just the reasonable fees after the offer of settlement is rejected. However, this is generally not automatic - and there is still an appeals process.

There are interesting theories on liability limits. There are competing issues, with high limits, there is a larger pool for an attorney to fight hard, with low limits, it's not worth the attorney's time so they'll encourage their client to settle (remember, it is the client who has the power to settle not the attorney). However, on the other side of the story you have too low limits and high personal assets, you're another target. Have you talked to an estate planner / trust attorney to set things up correctly so they can't be touched. I.e. it may be possible to put most of your assets in a trust and then get a "payment" from the trust. This is not a complete solution because trusts can be pierced. Texas is probably going to be more likely to protect your assets than California would be.

The real answer is, go talk to an attorney who specializes in TX aviation law. Spend 2hrs (probably $300-500 = 1 tank of gas) to figure out what you should do based on what has happened in TX in the past. If you have substantial personal assets, you also need to talk to an estate planning attorney and make sure things are set up correctly. A few thousand now may save 100s later...
 
mrkbbd said:
It's generally not all the attorney's fees, it's just the reasonable fees after the offer of settlement is rejected. However, this is generally not automatic - and there is still an appeals process.

There are interesting theories on liability limits. There are competing issues, with high limits, there is a larger pool for an attorney to fight hard, with low limits, it's not worth the attorney's time so they'll encourage their client to settle (remember, it is the client who has the power to settle not the attorney). However, on the other side of the story you have too low limits and high personal assets, you're another target. Have you talked to an estate planner / trust attorney to set things up correctly so they can't be touched. I.e. it may be possible to put most of your assets in a trust and then get a "payment" from the trust. This is not a complete solution because trusts can be pierced. Texas is probably going to be more likely to protect your assets than California would be.

The real answer is, go talk to an attorney who specializes in TX aviation law. Spend 2hrs (probably $300-500 = 1 tank of gas) to figure out what you should do based on what has happened in TX in the past. If you have substantial personal assets, you also need to talk to an estate planning attorney and make sure things are set up correctly. A few thousand now may save 100s later...
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Define 'substantial'. One may have assets that they consider not worth the cost of liability except they have strong attachment to those things. Example, one may fear losing his prized collection of antique firearms yet on the financial scale the collection is less than the cost of coverage.

Or two run down shacks on adjacent parcels. Small intrinsic value but the potential is anticipated to be of a much higher value. How many yrs of coverage would it take to exceed the tax valuation?

As far as attorney consultation, I don't mean to ruffle any feathers but absent a specific case, but even then, a general consultation is not much more than being discerning while surfing the legal web links. Recently I blew $600 on an attorney who should've paid more attention in school. Before that I 'lost' $350 for an attorney to tell me exactly what I already knew regarding tax liability. Value = zero.

As an alternative, I suggest a serious conversation with the underwriter.
 
Richard said:
Define 'substantial'. One may have assets that they consider not worth the cost of liability except they have strong attachment to those things. Example, one may fear losing his prized collection of antique firearms yet on the financial scale the collection is less than the cost of coverage.

Or two run down shacks on adjacent parcels. Small intrinsic value but the potential is anticipated to be of a much higher value. How many yrs of coverage would it take to exceed the tax valuation?

As far as attorney consultation, I don't mean to ruffle any feathers but absent a specific case, but even then, a general consultation is not much more than being discerning while surfing the legal web links. Recently I blew $600 on an attorney who should've paid more attention in school. Before that I 'lost' $350 for an attorney to tell me exactly what I already knew regarding tax liability. Value = zero.

As an alternative, I suggest a serious conversation with the underwriter.
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People are going to define it differently - I would say the substantial is greater than $2-3mm NOT including your primary residence.

Consultations are generally free - you pay for the advice. There are a few good lawyers, there are bad lawyers, and there are OK lawyers - just like everything you get what you pay for. There are lawyers who will charge you $100 to do something that someone else will charge $1,000. Ask around, look to see if the lawyer publishes anything, what he/she typically handles. The issue you are referring to is likely due to people expanding their practices to include more practice areas without a specific expertise just because one or two clients started asking questions. Get someone who specializes in what you need - you are allowed to have more than 1 attorney.
 
mrkbbd said:
People are going to define it differently - I would say the substantial is greater than $2-3mm NOT including your primary residence.

Consultations are generally free - you pay for the advice. There are a few good lawyers, there are bad lawyers, and there are OK lawyers - just like everything you get what you pay for. There are lawyers who will charge you $100 to do something that someone else will charge $1,000. Ask around, look to see if the lawyer publishes anything, what he/she typically handles. The issue you are referring to is likely due to people expanding their practices to include more practice areas without a specific expertise just because one or two clients started asking questions. Get someone who specializes in what you need - you are allowed to have more than 1 attorney.
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Roger that. The operative word is discernment.

Actually the best advice I've gotten was free. One attorney I consulted for sticky problems in business law was free for the first consultation. That went on for nearly 90 minutes. (small town and all that)

The 2nd was a highly skilled attorney who was also professor at a law school. Because the law school provided zero fee legal services to the community. I'd hire her in a NY second if need be.

Still, because attorneys may be loathe to speak of their expertise, I suggest speaking with the underwriter. Or, maybe not THE but AN underwriter.
 
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Who needs to pay for a lawyer? PoA is full of 'em (Some real, most pretend) and will offer page after page of "advise".

Worth every penny you pay for it....:rolleyes:
 
Geico266 said:
In Nebraska punitive damages are not allowed as a general rule. You can only sue for actual damages. I think the country would be better off following our example. :dunno:

Someone just won $500,000 for spilling hot coffee on themselves. Really? :mad2:
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Gross Negligence is best how one exposes themselves to punis, Bad Faith is another, but that is limited in commerce.
 
Richard said:
Thank you.

Also, of note, at least in CA in a civil case, as I understand it, if an offer to compromise (settlement) is rejected by plaintiff, and they later do not prevail, they get nothing but also are required to pay court costs including (I believe) att fees. This is tangential to the thread subject but worth noting.
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Not attorneys fees, but all the other costs, including expert fees. It is usually not enough of a threat to force a settlement, but it can help.
 
Geico266 said:
In Nebraska punitive damages are not allowed as a general rule. You can only sue for actual damages. I think the country would be better off following our example. :dunno:

Someone just won $500,000 shen they allowed their 14 month old access to a hot cup of coffee. Really? :mad2:

http://consumerist.com/2014/10/24/f...e-at-dennys-lands-reported-500000-settlement/
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What about the guy running an intersection on gravel and hitting a school bus? Didn't he successfully sue the county for missing stop sign to the tune of $1m?
 
We have an umbrella policy through USAA.

I need to drill into it and see what all it covers.
 
Don't take up a passenger who is a young doctor with kids.

I did that once, and later I realized that if we died, his estate would thoroughly extinguish mine, in a lawsuit by his family. My family would starve.

Taking up your elderly mom is a much better idea.
 
I like to share my love of flying with just about anyone. I can't count the number of first rides I have given over the years and I've never worried about liability. I don't do Young Eagles but have given a lot of kids their first ride in an airplane. Two have gone on to careers in the Navy and Air Force and a couple others got their PPL. I gave an aerobatic ride to a kid right out of high school and he's on the US Aerobatic Team and is an airshow pilot. Don
 
Sit in your basement and hug your pot of gold. Never leave, never sleep. There is great wealth in being judgment proof.
 
Henning said:
Gross Negligence is best how one exposes themselves to punis, Bad Faith is another, but that is limited in commerce.
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Very state dependent - do not accept this as a generalization, punitives may also be reduced at the discretion of the court or on appeal - so an award at the lowest level, is not necessarily an actual award...also what most people don't understand is an award is not a collection, you still have to find the assets and attach them to the judgment (if you're allowed to).

I also learned something interesting, NTSB reports can be inadmissible, so just because the agency attaches liability to the pilot doesn't mean the court will
 
mrkbbd said:
I also learned something interesting, NTSB reports can be inadmissible, so just because the agency attaches liability to the pilot doesn't mean the court will
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Yes, the final NTSB report is inadmissible. 49 U.S.C. § 1154(b)
 
txflyer said:
We have an umbrella policy through USAA.



I need to drill into it and see what all it covers.
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Does your's have an aviation exclusion?

USAA goes in and out of the aviation exclusion business with their umbrella policies. Some folks have been able to get aviation included in theirs, but last I checked, USAA hadn't offered that for a while.
 
Mine includes aviation, but I had to push the agent to ask and get a special questionnaire about my aviation activities from the underwriter and then apply for the add-on.

She said it could come back approved, disapproved, or a rate hike. We just had to wait a week or so from the underwriter. It came back approved.

One of the questions was whether you were involved in commercial aviation. I found that interesting. Assuming my answer of "no" was obviously one of the answers that led to a simple "approved" means the actuaries think commercial aviators get sued more. And probably for more money.

Makes sense I guess. Other questions were typical of aviation insurance. Time flown per year, time in type, ratings held. Nothing really even interesting.

Similar deal with life insurance but the aviation bumped my rate a tiny tiny bit. Very tiny.
 
denverpilot said:
Similar deal with life insurance but the aviation bumped my rate a tiny tiny bit. Very tiny.
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One of my shipmates (helo pilot) is looking at getting out and was shopping life insurance and keeps getting denied because he lists his occupation as pilot.
 
A friend of mine was recently sued as the owner of an aircraft involved in an accident. A waiver was signed for the flight, but we all know that they're merely a road bump to a lawsuit. After seeing what it's done to him (mostly emotionally), I've decided to stop giving Young Eagle rides and flights to people I don't know well.

A few other chapter members have done the same, and it's quite unfortunate. At the end of the day, however, I fly for my enjoyment. I'd love to continue spreading the joy of flying to others but it's just not worth financial and emotional ruin should the unexpected happen.
 
Turningfinal said:
A friend of mine was recently sued as the owner of an aircraft involved in an accident. A waiver was signed for the flight, but we all know that they're merely a road bump to a lawsuit. After seeing what it's done to him (mostly emotionally), I've decided to stop giving Young Eagle rides and flights to people I don't know well.

A few other chapter members have done the same, and it's quite unfortunate. At the end of the day, however, I fly for my enjoyment. I'd love to continue spreading the joy of flying to others but it's just not worth financial and emotional ruin should the unexpected happen.
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What was the outcome of the lawsuit? I certainly don't disagree with your position on YE rides. It turns what could be a cool learning experience into nothing more than a carnival ride.
 
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Fearless Tower said:
One of my shipmates (helo pilot) is looking at getting out and was shopping life insurance and keeps getting denied because he lists his occupation as pilot.
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Tell him to keep looking. When I started at Cal Dive the benefits lady had trouble finding life insurance for me because I was a pilot. She finally found it though, and it was such a good quote she shifted the whole company to them.
 
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