Click and Lose Your Rights: Legal Risks of Booking on Public Websites in Canada

1. Click and Lose Your Rights: Legal Risks of Booking on Public Websites in Canada By Mark Pestronk

2. The big idea: It is risky for you or your clients to book on the public websites of travel suppliers and OTA’s. Let me show you why!

3. This can really happen: • Your client books hotel on, say, Expedia.ca. • The hotel’s shuttle bus crashes. • Your client is badly injured. • Can the client successfully sue the hotel?

4. Disclaimers! • I am not licensed to practice law in Ontario. • I am not even licensed anywhere in Canada. • What I say is not legal advice. • But this is what my research shows. • Be sure to consult your own attorney.

5. The legal case against booking on public websites Using public websites requires agreement to the “terms & conditions” T&C’s are binding contracts, usually upheld by the courts in Canada. T&C’s disclaim liability for the suppliers, limit damages, and set “exclusive forums” for suits. Even if the traveler doesn’t use the public website, you could bind the client if you book there for him.

6. So what else is new? • The public booking websites go further! • OTA’s disclaim liability for acts of suppliers! • They protect the suppliers from liability! • They disclaim liability for anything that happens on the trip! So, click and lose your rights – not only against the website operator, but also against the travel supplier.

7. Example: Hilton.com “All users agree that the Indemnified Parties [the chain and hotels] … are not responsible or liable for…any losses, injury, death, property damage…that may occur from use…or the acceptance of…services or products related thereto or acquired therefrom.” So, if a hotel fires kills the consumer that booked using Hilton.com, the consumer’s spouse and estate cannot successfully sue the chain for damages!

8. Hilton.com, continued “You agree that any action…arising out of or relating to the terms of this Agreement shall be filed only in the United States District Court for the Eastern District of Virginia or, if there is no federal jurisdiction over the action, in the courts of the Commonwealth of Virginia located in Fairfax County, Virginia.” So, if you book on Hilton.com, you can’t sue in your home state, and you can’t win.

9. Where you have to sue 55 chains Hilton (10 brands): Alexandria, Virginia federal court or Fairfax state court Marriott (18 brands): Maryland Wyndham (27 brands): New Jersey

10. Example: Expedia.ca Expedia’sT&C’s: “In no event shall the Expedia Companies…and/or their respective suppliers be liable for any…damages arising out of, or in any way connected with, your…use of this Website…whether based on a theory of negligence, contract, tort, strict liability, consumer protection statutes, or otherwise….” So, the traveler and his or her employer waive all their rights to sue not only Expedia but also the travel suppliers, no matter what happens on a trip.

11. Expedia.ca, continued “If, despite the limitation above, the Expedia Companies…or their respective suppliers are found liable for any loss or damage…, then the liability of the Expedia Companies… and/or their respective suppliers will in no event exceed…the greater of (a) the service fees you paid to Expedia, Inc. in connection with such transaction(s) on this Website, or (b) One-Hundred U.S. Dollars (US$100.00) or the equivalent in local currency.” So, even if your clever attorney thinks of grounds for suit that are not covered by the disclaimer, the most you can get is $100.

12. Expedia.ca, continued “Except as restricted by applicable law (which may include Quebec), you hereby consent to the exclusive jurisdiction and venue of courts in King County, Washington, USA, in all disputes arising out of or relating to the use of this Website.” So, even if your clever attorney thinks of grounds for suit that are not covered by the disclaimer, you have to sue in Seattle.

13. Where you have to sue and be sued • Expedia.ca: King County, WA • Orbitz.com: Cook County, IL • Travelocity.ca: Tarrant County, TX • Priceline.com: Fairfield County, CT • Hotwire.com: Delaware • Booking.com: Arbitration in Chicago • Ca.Hotels.com Dallas County, TX What’s the purpose of these clauses?

14. The U.S. DOT outlawed exclusive forum clauses for airlines! • “It is our view that…a passenger must be able to seek legal redress in any court of competent jurisdiction. Trying to force passengers to file what are generally small claims in courts that may be thousands of miles from their homes effectively deprives them unfairly of legal recourse. Such provisions are unconscionable….”

15. “Unconscionability” is alive and well in Canada Every province has a Consumer Protection Act outlawing unconscionable terms; e.g. Ontario: “…in determining whether a representation is unconscionable, there may be taken into account that the person making the representation or the person’s employer or principal knows or ought to know… (e) that the consumer transaction is excessively one-sided in favour of someone other than the consumer.”

16. O You Canadian Skeptics Do Canadian courts really uphold these contracts? “In Canada, the courts have held that, generally, online agreements are binding but they have made it clear that they will not enforce an online agreement if it would not otherwise be enforceable – for example, if the terms are unconscionable or contrary to statute.” (c) Deeth Williams Wall LLP

17. Furthermore in a 2007 Supreme Court case: • “The Court concluded that contractual terms and conditions can be enforceable even if the consumer is required to click on a hyperlink to access them (i.e., the terms are not found on the ordering page itself).  It emphasized that the terms and conditions must be "reasonably accessible” and expressed the view that a hyperlinked document meets that standard.” Professor Michael Geist of University of Ottawa

18. Furthermore, cont. In a 2012 BC case, Loychukv. Cougar Mountain Adventures the court stated: “…a properly drafted waiver, that is understood and signed by the participant, may even protect an organization from liability for serious injuries or even death caused by the negligence of its own employees.”

19. As to exclusive forum clauses: • “The governing Supreme Court of Canada case on choice of forum clauses articulates what has become known as the “strong cause” test. In a nutshell, Canadian courts should respect a forum selection clause selecting another jurisdiction and should stay the local proceeding unless there is strong cause for not doing so.” (c) Lawson Lundell

20. What do I conclude? • Canadian courts are less inclined to uphold oppressive clauses than U.S. courts because “unconscionability” is more enshrined in Canadian law. • Canadian courts are also lss inclined because of other parts of the Consumer Protection Acts. • Nevertheless, Canadian courts generally uphold online T&C. • Fact: no Canadian court has ever found any travel website T&C clause to be “unconscionable” • Conclusion: Expect heavy opposition to any suit!

21. Some FAQ’s • Don’t GDS bookings require you to agree to suppliers’ T&C’s? • Don’t online booking engines have similar T&C’s? • Are these T&C’s just standard, ubiquitous boilerplate? • What if you book on supplier website on behalf of client – is client deemed to agree?

22. The takeaways • A client that books directly on suppliers’ websites is taking a huge risk by “effectively depriving himself of legal recourse”, no matter what happens on the trip. • So, tell you clients about these risks and suggest that they use you instead! • When you book on public websites for the client, CYA by getting the client’s consent in your own disclaimer!

23. QUESTIONS?