The Risk Management Implications of Premises Security
Warfel, William J., Risk Management
The frequency of lawsuits filed behalf of crime victims who were attacked while on the premises of a commercial entity has increased dramatically since the mid-1980s. Media coverage of violent crime, victims looking for redress through civil litigation and an active plaintiff's bar have all contributed to this phenomenon. Few organizations are unaffected. Hospitals, hotels, office buildings, universities, convenience stores, retail shops, apartment complexes and shopping malls have all been targets. As a result, premises security has become yet another risk management responsibility.
Nature of Exposure
In premises security lawsuits, plaintiffs either allege that the commercial entity failed to provide adequate security or that it failed to eradicate conditions on the premises that foster criminal activity. Although defendants often prevail in these lawsuits, the defense costs are substantial--averaging between $18,000 and $53,000. Settlements typically range from $500,000 to $2.5 million, depending on the nature of the crime.
In a premises security case, the plaintiff must prove that the defendant owed a legal duty to protect the plaintiff; that the defendant breached such duty; and that the breach of duty was a proximate cause of both the criminal act and the resulting injury to the plaintiff. Courts have delivered substantial verdicts in favor of plaintiffs. shifting additional financial responsibility to commercial entities.
Duty to Protect
Whether the defendant owes a legal duly to protect the plaintiff is a question of law, as opposed to a question of fact. If the defendant can prove it owes no duty (or the plaintiff can not prove it does). the case will not reach a jury. If the issue resolves in the plaintiff's favor, however, a case's settlement value dramatically increases once it is in the jury's hands.
In evaluating whether a duty to protect exists, courts have applied the following approaches:
* Knowledge of imminent criminal activity. Under this approach, liability is limited to circumstances under which the commercial entity had good reason to believe criminal activity was likely. If it failed to intercede to change those conditions and protect the plaintiff, it is held liable.
* Voluntary assumption of duty. Courts have found that organizations can indirectly assume a duty that did not previously exist. Normally in these cases, the entity undertakes a security measure after recognizing that an act of violence is possible. (Foreseeing the danger is thus a foregone conclusion.) The issue then turns on whether the defendant was negligent in providing protection against that threat. In Jardel v. Hughes (1987), for example, a shopping mall was held liable for injuries sustained by a tenant's employee who was abducted in the parking lot and raped nearby. The court reasoned that "having undertaken to provide a security program, albeit voluntarily, Jardel was obligated to perform the task in a reasonable manner with a view toward the dangers to which the program was directed."
* Contract. Seemingly innocuous contractual provisions in a lease--for example, pertaining to the general upkeep of the premises--may result in an open-ended premises security exposure for a landlord. If the plaintiff relied on the defendant to take appropriate security measures, a court may reason that providing security is an implied contractual obligation. In Furek v. University of Delaware (1991), for example, the court determined that establishing security for students is "an indispensable part of the bundle of services which colleges ... afford their students."
* Special relationships. In cases where the crime victim was on the defendant's premises for a purpose that was mutually beneficial to both parties (e.g., customers, delivery people, employees), courts are inclined to find a duty to protect. Such is the case if evidence suggests that the victim had in some way entrusted his or her safety to the defendant, and the defendant had accepted this duty. …