The government of Alberta, Canada last week approved vicarious liability reform regulations to accompany legislation that was aggressively sought by Truck Rental and Leasing Association (TRALA).

Implementation of the regulations will rightfully limit the liability of non-negligent owners of vehicles operating under both long-term lease and short-term rental agreements. Previously, non-negligent vehicle owners were exposed to unlimited amounts of vicarious liability for the actions of their customers, solely on the basis of vehicle ownership.

As part of the vicarious liability reform in Alberta, the Alberta Legislative Assembly also passed legislation that will reverse insurance primacy, so 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 the primary insured even if the driver of the rented or leased vehicle was at fault in the accident.

TRALA has been pushing for implementation of the laws, which it developed in conjunction with the government of Alberta, since 2007. In December 2007, Bill 49, which capped vicarious liability at $1 million for non-negligent owners of vehicles leased for periods longer than 30 days, was passed. Following that, Bill 30, which applied the same limits on vicarious liability to owners of vehicles rented for periods of 30 days or less was passed in June 2009. Bill 30 also reversed insurance primacy.

Since that time, TRALA has worked with the Alberta Ministry of Finance while necessary insurance regulations were drafted before Bill 30 and Bill 49 could be fully implemented. Passage of vicarious liability reform in Alberta follows the passage of similar laws sought by TRALA in the Canadian provinces of Ontario and British Columbia.

Alberta vicarious liability reform, just like the Graves/Boucher Law in the United States, which TRALA helped pass, only protects non-negligent renting and leasing companies. 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.

For questions about Alberta's vicarious liability reform, please contact TRALA's Tom James at tjames@trala.org or by calling (703) 299-9120.