Management Liability for NFP Organisations Regarding Injuries & Accidents Due to Negligence

Introduction

Not-for-profit organisations have a legal duty of care to protect their employees, volunteers, clients, and the public from foreseeable harm. A failure to meet this standard can result in claims of negligence, creating legal and financial risks that can impact a charity’s ability to continue its work.

This article explains the key legal responsibilities for a not-for-profit organisation, including duty of care, negligence, and vicarious liability for the actions of staff and volunteers. It also outlines practical risk management strategies and essential insurance solutions to help protect your charity from liability following accidents and incidents.

Interactive Tool: See If Your NFP Is Liable for Injuries & Accidents

NFP Organisation’s Duty of Care

Identifying Who Your Charity Owes a Duty of Care To

A not-for-profit organisation has a legal obligation to prevent foreseeable harm to certain individuals. This responsibility, known as a duty of care, extends to various groups connected with your charity’s operations. While some duties are well-established by courts, you should generally assume your organisation owes a duty of care to:

• Employees: Your organisation has an unequivocal duty of care to its employees.
• Volunteers: A duty of care is owed to volunteers performing work for your charity.
• Clients: The people your organisation assists and serves are owed a duty of care.
• The public: This includes individuals who enter your premises or rely on materials you publish.

Courts consider several factors when determining if a duty of care exists in a specific situation, including:

• the foreseeability of the harm;
• the vulnerability of the person who suffered damage; and
• your organisation’s ability to control the risk.

For example, if your charity works with individuals who have experienced trauma, it is foreseeable that employees could suffer psychological injuries. Therefore, a duty exists to take proactive steps to ensure their work can be performed safely.

Meeting the Required Standard of Care

Once a duty of care is established, your not-for-profit organisation must meet a specific standard of care to avoid claims of negligence. Your charity will be judged against the standard of a reasonably competent and prudent organisation in the same position and with the same knowledge. Acting in accordance with established practices within the community sector can help demonstrate that your organisation has met this standard.

The expected standard of care can be higher in certain situations. If your not-for-profit provides professional services, such as legal or health advice, the standard is that of competent professional practice as accepted by peers in that field.

Additionally, specific legislation imposes a direct duty on organisations to take reasonable precautions to prevent the physical or sexual abuse of children by associated individuals in the following jurisdictions:

• New South Wales;
• Victoria;
• Queensland;
• South Australia;
• the Northern Territory; and
• Tasmania.

In these jurisdictions, the organisation must prove it took all reasonable precautions to prevent the abuse from occurring.

How a Breach of Duty Leads to Negligence Claims for Charities

Establishing a Breach of Duty

A not-for-profit organisation is considered to have breached its duty of care if it fails to take adequate precautions against a risk. For a breach to be established, three conditions must be met:

• the risk must have been one the organisation should have known about;
• the risk was “not insignificant”; and
• a reasonable organisation in a similar position would have taken steps to prevent it.

When deciding if a reasonable organisation would have taken precautions, a court will consider several factors, including:

• The social utility of the conduct: A court assesses the community benefit of the activity that created the risk. For example, if an incident occurred while a charity was providing essential services, the importance of that work is weighed.
• The burden of taking precautions: The court considers how difficult or expensive it would have been to prevent the harm. Failing to put up a simple warning sign for a wet floor is viewed differently from not installing costly safety equipment an NFP could not afford.
• The gravity of the risk: If the potential harm was severe, the organisation was expected to take greater measures to avoid it.
• The seriousness of the harm: A risk is generally considered significant if it results in an injury.

Proving Damage & Causation

Even if a breach of duty occurs, a not-for-profit organisation cannot be found negligent unless someone has suffered legally recognised damage. The most common types of damage in these claims are as follows:

• personal injury;
• property damage; and
• financial loss.

Furthermore, the person who suffered the harm must also prove that the organisation’s negligence was the cause of the damage. The key question is whether the damage would have happened “but for” the organisation’s conduct.

To illustrate, imagine an employee mops a floor but forgets to put out a warning sign. If someone slips and is injured, causation is established if they can show they would have avoided the area had the sign been present.

Case Study on Employee Safety & Negligence

A past court case highlights how these principles apply to a not-for-profit organisation. In Beven v Brisbane Youth Service Inc [2016] QSC 163 (‘Beven‘), a family support worker was sexually assaulted by a client who had a known history of violence and sexualised behaviour. Ultimately, the Supreme Court of Queensland found that the not-for-profit had breached its duty of care to the employee.

The court’s decision, which was upheld on appeal in Brisbane Youth Service Inc v Beven [2017] QCA 211 (‘Brisbane Youth Service v Beven‘), was based on several key findings:

• the organisation was aware that other employees had felt unsafe with the client;
• the risk of injury to the worker was not insignificant; and
• the court determined that the risk of assault was foreseeable.

Given the serious potential harm, the organisation should have taken protective measures, such as declining to offer services to that client or sending a second support worker on visits. While the court acknowledged the social value of the charity’s work, this did not override its fundamental duty to provide a safe workplace for its employees, a core focus of NFP employment and workplace law.

Vicarious Liability for Employees & Volunteers

When Organisation is Liable for Employee Actions

A not-for-profit organisation can be held legally responsible for the actions or failures of its employees through a concept known as vicarious liability. This responsibility applies when an employee’s conduct occurs within the course or scope of their employment. Furthermore, the organisation can be liable even for actions it did not authorise or expressly prohibited.

The key test is whether the employee’s conduct was sufficiently connected to their employment. Even criminal acts committed by an employee do not automatically prevent the charity from being found vicariously liable. When making a determination, a court will consider several factors, including:

• The legal relationship between the organisation and the individual;
• Whether the wrongful act occurred within the scope of employment activities; and
• The special role the organisation assigned to the employee, which may have provided the authority, power, trust, or control to commit the act.

Understanding Volunteer Protections & Organisational Liability

State and territory legislation provides special protections for volunteers who perform community work for a not-for-profit organisation. Generally, a volunteer is protected from personal liability for any personal injury or property damage they may cause, provided they were acting in good faith and without recklessness.

When a volunteer is protected from personal liability, the legal responsibility often shifts to the community organisation. This means the charity itself may be held liable for the harm caused by the volunteer’s actions. The specific protections vary by jurisdiction as follows:

• New South Wales: Under the Civil Liability Act 2002 (NSW) (‘Civil Liability Act‘), volunteers are generally not personally liable for acts done in good faith.
• Northern Territory: The Personal Injuries (Liabilities and Damages) Act 2003 (NT) (‘Personal Injuries Act‘) protects volunteers from personal liability for injuries caused while acting in good faith and without recklessness.
• Queensland: Protections are offered under the Civil Liability Act 2003 (Qld) (‘Civil Liability Act‘) for volunteers acting in good faith.
• South Australia: The Volunteers Protection Act 2001 (SA) (‘Volunteers Protection Act‘) provides similar protections, with the organisation potentially being vicariously liable.
• Tasmania: The Civil Liability Act 2002 (Tas) (‘Civil Liability Act‘) states the community organisation will be liable instead of the volunteer.
• Victoria: Under the Wrongs Act 1958 (Vic) (‘Wrongs Act‘), volunteers are not personally liable for acts done in good faith.
• Western Australia: The Volunteers and Food and Other Donors (Protection from Liability) Act 2002 (WA) (‘Volunteers and Food and Other Donors Act‘) shifts liability to the community organisation.

Case Studies on Worker Liability During Disasters

Hypothetical scenarios help illustrate how liability can apply during emergency situations. Ultimately, these examples highlight the importance of risk management for any charity or not-for-profit.

Consider a case where a community organisation arranges transport for vulnerable people during a heatwave. A volunteer driver is involved in a car accident, causing injuries. Liability in this situation depends on factors like:

• Driver negligence: If the volunteer was speeding or otherwise driving carelessly, they could be found negligent.
• Vicarious liability: The organisation may be held responsible if the driver was acting within the scope of their volunteer duties.
• Workplace health and safety: Regulators may investigate if the organisation had proper systems to ensure the driver was competent and the vehicle was safe.

To illustrate another scenario, imagine a storm blocks access to a community centre with a fallen tree. A social worker, who does not typically perform maintenance, uses a chainsaw to clear the branches and injures himself and a member of the public. Determining liability would involve assessing:

• The organisation’s duty of care: The charity has a duty to ensure worker and community safety, which includes providing proper training and supervision for hazardous tasks.
• Scope of duties: The fact that using a chainsaw is outside the worker’s usual role is a relevant factor in determining if they had the necessary training.
• Worker negligence: The worker’s own actions, such as whether they followed safety procedures, would be considered.

Managing Risks & Protecting NFPs

Immediate Steps to Take When Accidents & Incidents Occur

When an injury or accident occurs, your not-for-profit organisation should act promptly to document the event and prevent it from happening again. A structured response can help manage claims and protect your charity from ongoing legal issues. Key actions to take immediately following an incident include:

• Prepare an incident report: Document how the incident occurred as soon as possible, including details of any injury or property damage.
• Take photographs: If possible, capture images of the location where the incident happened and any damage that resulted.
• Gather witness statements: Collect accounts from anyone who saw the accident or incident. Your insurer may be able to provide assistance with this process.
• Maintain a register: Place the completed incident report on a register of incidents for your organisation’s records.
• Implement safety changes: Make any necessary adjustments to your procedures or premises to avoid a similar event in the future.
• Notify relevant parties: Inform your insurer and the appropriate workplace health and safety authorities where required. You should also decide if the board needs to be notified.

Implementing Effective Risk Management Strategies

Proactive risk management helps your not-for-profit organisation meet its duty of care and prevent harm before it occurs. This involves creating strong internal systems and ensuring all workers are prepared to perform their duties safely. Your charity can implement several strategies to minimise risks:

• Screen workers: Ensure all employees and volunteers are properly screened and qualified for their roles.
• Provide ongoing training: Offer continuous training and support to help workers understand safety policies and perform their tasks safely.
• Develop clear policies: Establish and implement clear procedures for workplace safety, incident reporting, and overall compliance with applicable laws, a key aspect of NFP governance and ACNC compliance.
• Conduct regular inspections: Regularly inspect the workplace to identify and address potential hazards before they cause an incident.
• Foster a compliance culture: Encourage transparency so that individuals feel comfortable reporting potential breaches or safety concerns, which can help preempt the need for formal NFP dispute investigations.
• Create a risk register: Develop a register, such as an ACNC risk register, to identify current and potential risks and outline how your organisation will minimise them.

Essential NFP Insurance Solutions Designed for Charity

Insurance is a critical tool for protecting your not-for-profit from the financial consequences of negligence claims and other liabilities. Without adequate insurance coverage, your organisation’s management and board members could be exposed to significant personal financial hardship. Key insurance solutions designed for the insurance needs of charities and not-for-profits include:

• Public Liability Insurance: This covers claims of injury or property damage made by members of the public in connection with your charity’s activities or events.
• Employers’ Liability Insurance: This form of business insurance protects your organisation against injury claims from employees or volunteers who are harmed while working for you.
• Directors and Officers Insurance: This coverage protects board members and officers from personal liabilities that may arise from decisions made in good faith while performing their duties. It provides a financial cushion to defend against claims of wrongdoing.

Conclusion

Not-for-profit organisations have a legal duty of care to prevent negligence and can be held vicariously liable for the actions of their employees and volunteers. Implementing clear risk management strategies and securing the right insurance coverage are critical steps to protect your charity from legal and financial risks.

To ensure your charity meets its legal obligations and has the right protections in place, contact our experienced not-for-profit lawyers at LawBridge today. Our legal team provides expert guidance on the specific liability and insurance needs of not-for-profits, helping you secure the necessary safeguards to protect your organisation’s mission and community impact.

Frequently Asked Questions