Risk Management in Higher Education
Tort Liability, Other Sources of Risk
During the late twentieth century, American society and higher education experienced a substantial increase in lawsuits resulting from some form of personal injury, according to John F. Adams and John W. Hall. A response to the trend of litigiousness, risk management seeks to control exposure to legal risk, thus limiting the negative impact of liability on the institution. In 1995 William A. Kaplin and Barbara A. Lee described four of the most common methods of risk management: risk avoidance, risk control, risk transfer, and risk retention. Risk avoidance entails an effort on the institution's part to limit risk by eliminating programs or activities or avoiding creating those that involve risk. A less extreme approach is risk control, which seeks to manage liability by structuring activities and programs in ways that reduce or limit institutional risk. There are several methods of transferring risk to other parties including insurance, indemnification agreements, and releases and waivers. Risk retention describes the self-insurance as a means to prepare for the financial implications of legal liability.
One of the primary areas of legal liability that risk management addresses is tort liability, which is generally defined as "a civil wrong, other than a breach of contract, for which the courts will allow a damage remedy" (Kaplin and Lee, p. 98). The area within tort liability with which institutions of higher education must most often deal is negligence. Most of these cases involve lawsuits by students and others who suffered injuries that they claim the institution should have prevented through the exercise of reasonable care. The four elements of negligence are duty, breach of that duty, injury (physical or emotional), and proximate cause.
In addition to duties commonly associated with any business enterprise, colleges and universities, according to some courts and authors, have a special relationship with students that demands a higher level of care. Many of the cases heard in the 1980s and 1990s rejected this claim of a higher duty. For example, in Beach v. the University of Utah (1986) the institution was freed from any legal responsibility for the injuries that befell Donna Beach while on a university-sponsored field trip where underage students, including Beach, were served alcohol in the presence of the faculty member supervising the trip. The Utah Supreme Court ruled that no special relationship existed between Beach and the university to prevent her injuries. This decision was not anomalous during this period. In rulings in such cases as Bradshaw v. Rawlings (1979), Baldwin v. Zoradi (1981), and Rabel v. Illinois Wesleyan University (1987), the courts continued to reject the idea that college and universities had any heightened duty for the safety of their students and others on campus.
These cases and a number of others led Robert D. Bickel and Peter F. Lake in 1999 to describe this period and line of reasoning as the bystander university that "cast the university in the legal and cultural role of helpless 'bystander' to student life and danger" (p. 49). During this time, colleges and universities were often seen as having no duty to their students, and as a result no legal liability for the harm their students may suffer. However, not all courts embraced this no-duty reasoning. For example in Mullins v. Pine Manor College (1983) and Tarasoff v. Board of Regents of the University of California (1976), the courts clearly articulated heightened duties for colleges and universities to their students and others. In Mullins the Massachusetts Supreme Court found Pine Manor College liable for the rape of a student in a residence hall by a third party, noting that a residential college has a general duty to provide for campus security and noting that efforts by the college to provide for campus security (including fences around the campus) represented a voluntary assumption of a duty as well. A series of cases in the 1990s including Furek v. The University of Delaware (1991) and Nero v. Kansas State University (1993) continued in the view of earlier duty cases as courts ruled that institutions had an obligation in the prevention of foreseeable harm. In cases such as Tanja H. v. Regents of the University of California (1991), however, the courts continued to reject any heightened duty owed to students by the institution. In their analysis, Bickel and Lake suggested that cases such as Furek and Nero should be viewed as beginning a larger body of cases that redefine the duty that institutions owe their students, "Duty is owed if danger is foreseeable from prior indicia or assumption of duty and reasonable precautions could prevent harm" (p. 145). Throughout these cases from the 1970s to the early twenty-first century, several common sources of institution liability can be seen with multiple elements present in many cases such as those involving alcohol, fraternities, and campus crime–particularly sexual assault.
Other Sources of Risk
Risk management in higher education does not end with the consideration of tort liability and negligence. Public and private institutions must address the issue of potential institutional contract liability in the enforcement of contracts in which its agents enter the institution. Public institutions may also face lawsuits brought under 42 USC 1983 for intentional violations of federal constitutional rights. Additionally, institutions must pay careful attention to compliance with federal legislation and regulations governing higher education, which expand and grow more complicated with each congressional session.
Much of the legislation directly affecting higher education passed in the late 1980s and 1990s must be viewed in the context of the negligence cases involving harm to students. Congress passed legislation related to both alcohol (Drug-Free Schools and Communities Act) and campus crime (Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act). In 1998 Congress authorized the use of fines by the Department of Education to enforce the Campus Security Act. Under federal law, another significant concern for institutions is sexual harassment, which is a form of sexual discrimination prohibited under Title IX of the Educational Amendments of 1972. The Supreme Court has allowed students to recover monetary damages for both quid pro quo (Gebser v. Lago Vista Independent School District, 1998) and hostile environment sexual harassment (Davis v. Monroe County Board of Education, 1999). In order to win monetary damages, the student must show that a school official with authority to take corrective action had actual knowledge of the sexual harassment and responded with deliberate indifference. However, the Department of Education's Office of Civil Rights holds institutions of higher education to even higher standard in administrative enforcement of the legislation.
Risk management is an issue that demands careful attention by all institutions of higher education. In the fall of 2000 the Massachusetts Institute of Technology settled the lawsuit brought by the parents of Scott Krueger, a freshman who died as a result of excessive alcohol consumption at a fraternity, for $6 million. This is a clear indication of the profound financial implications of educational institutions' lack of response to this important issue.
ADAMS, JOHN F., and HALL, JOHN W. 1976. "Legal Liabilities in Higher Education: Their Scope and Management (Sections II–III)." Journal of College and University Law 3:337–448.
AIKEN, RAY J. 1976. "Legal Liabilities in Higher Education: Their Scope and Management (Section I)." Journal of College and University Law 3:127–334.
NATIONAL ASSOCIATION OF COLLEGE AND UNIVERSITY ATTORNEYS. 1989. Am I Liable? Faculty, Staff and Institutional Liability in the College and University Setting. Washington, DC: National Association of College and University Attorneys.
BAZLUKE, FRANCINE T. 1990. Defamation Issues in Higher Education. Washington, DC: National Association of College and University Attorneys.
BENNETT, BARBARA. 1990. Risky Business: Risk Management, Loss Prevention and Insurance Procurement for Colleges and Universities. Washington, DC: National Association of College and University Attorneys.
BICKEL, ROBERT D., and LAKE, PETER F. 1999. The Rights and Responsibilities of the Modern University: Who Assumes the Risks of College Life? Durham, NC: Carolina Academic Press.
HIGGINS, BYRON H., and ZULKEY, EDWARD J. 1990. "Liability Insurance Coverage: How to Avoid Unpleasant Surprises." Journal of College and University Law 17:123–147.
KAPLIN WILLIAM A., and LEE, BARBARA A. 1995. The Law of Higher Education: A Comprehensive Guide to Legal Implications of Administrative Decision Making, 3rd edition. San Francisco: Jossey-Bass.
JOHN W. LOWERY
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