Preventing Lawsuits 
A friend recently asked, in respect to his cycling club, how they could prevent someone from suing the club or its leaders. The short answer is: “Nothing can prevent a lawsuit.” Why? Because any fool with the price of admission can file a suit. The price of admission? Yes, that is the real meaning of the filing fee and service of a Summons and Complaint. However absurd, anyone can file a suit, even with little or no basis.

The costs are not astronomical, but they are now somewhat more significant. The costs vary dependent on which court has jurisdiction, the type of suit, the number of parties to the suit, and other issues. A completely bizarre suit will likely be dismissed quickly, possibly with an award of attorneys fees. You must bring this by motion before the court, probably through legal counsel, at your expense. Even if the action is dismissed and you recover your fees, you have still been distressed by this, and used some of theat rare commodity, time.

So why discuss this if there isn’t any way to prevent suits? Answer – because there are ways to minimize the effect of suits. In the instance of recreational clubs, good and effective releases are important. Requiring use of all the proper safety equipment, with the agreement to do so in the same written release. Insure the organization – and for that matter HAVE an organization (probably under one to the sub-parts of the Internal Revenue Code at Section 501(c)). Insure the organization and its officers and directors for a reasonable sum. Recreational organizations can usually find special interest groups or associations which are sources for insurances. Insist upon minimum skills or training for joining in on activities. Provide training in the basics (or more) for beginners. Keep records of the training. Create a report form for incidents, and keep a signed copy in your records. These steps are to protect members from each other, as well as the organization and its leaders.

These concepts translate into a business environment as well. Have an entity that protects you; carry insurances; train, train, train to minimize injury; keep records and take good reports for every incident. These things may discourage suits, will reduce factual uncertainties, and help quantify any liability. While eliminating lawsuits is not realistic, minimizing their effect is.