Industry Wire

Vicarious Liability Cap for Rentals Approved by Alberta Legislature

The Alberta Legislative Assembly has passed legislation that rightfully limits the liability of non-negligent owners of vehicles under short-term rental agreements.  Under the provisions of Bill 30, which passed after 3rd reading on June 3, 2009, owners of rental vehicles could only be held vicariously liable for up to $1 million.  Currently, such rental vehicle owners can be subject to unlimited liability solely on the basis of their ownership of a vehicle involved in an accident.  To see a copy of Bill 30, please click here.

The passage of Bill 30 follows the enactment in December 2007 of Bill 49, capping vicarious liability at $1 million for non-negligent owners of vehicles leased for periods longer than 30 days.  The definition of rental vehicle under Bill 30 is vehicles rented for 30 days or less.  Following the expected enactment of Bill 30, vehicle operators responsible for accidents, rather than non-negligent owners, will be liable for the injuries and damages they cause.  However, if the rental or leasing company is found to be negligent, then the provisions of Bill 49 and Bill 30 would not protect the company from liability.

Bill 49 would also reverse the current insurance primacy laws in Alberta.  Under the new provisions, the operator of a rented or leased vehicle would be the primary insured in the event of a claim.  Previously, the rental or leasing company would be primary even if the driver was at fault in the accident.

TRALA, along with representatives from its other Canadian allies, will be meeting with senior officials from the Alberta Ministry of Finance and the office of the Superintendent of Insurance on June 19 to discuss the development of regulations to implement the provisions of both Bill 49 and Bill 30.

TRALA is hopeful that full implementation of vicarious liability reform and insurance primacy reversal will be in place in Alberta by the end of 2009. (ACCRO). For more information, contact TRALA’s Tom James at 703-299-9120 or at tjames@trala.org.