Consumer-facing businesses in emerging industries face extensive risks, especially when the core business service constitutes a potentially dangerous or hazardous activity. This maxim holds true for psilocybin service centers in Oregon, where customers pay to receive cutting-edge therapies involving controlled substances. Written liability waivers represent one of the best ways for psilocybin service centers in Oregon to mitigate their risks.
What Legal Risks Do Psilocybin Service Centers Face?
Under Oregon law, psilocybin may only be consumed at licensed premises known as “service centers.” Under OAR 333-333, psilocybin service centers may have multiple administration areas, including outdoor administration areas, if they have clearly defined boundaries and are free from hazards. Despite the requirement to be “free from hazards,” psilocybin service centers inherently risk incurring significant liability for the therapies they offer.
Psilocybin therapies involve consumption of intoxicating products that remain listed as Schedule I controlled substances under the federal Controlled Substances Act. Furthermore, psilocybin has undergone only limited clinical trials. While these trials have found psilocybin to be a promising treatment for many issues, including depression and addiction, they have also identified a number of adverse effects. Notably, in its published Rapid Evidence Review and Recommendations, the Oregon Psilocybin Advisory Board noted that psilocybin risked causing a variety of transient effects, such as nausea, vomiting, headache, increases in heart rate, increases in blood pressure, QT interval prolongation, grief, anxiety, fear, feelings of isolation, preoccupation with death, transient thought disorder, and transient paranoia. The Oregon Psilocybin Advisory Board also identified significant benefits associated with psilocybin therapies, but the potential adverse effects highlight the risks related to the activities of service centers.
If a service center client falls ill, becomes involved in an automobile accident, or incurs some other harm after receiving psilocybin therapy, they might attempt to hold the service center liable. Prudent psilocybin businesses can and should take proactive steps to limit these and other risks.
Importance of Liability Waivers and Issues to Consider When Drafting Them
As a general best practice, owners or operators of commercial establishments often ask their customers to sign a release and waiver of liability (commonly referred to as a liability waiver) before engaging in certain activities, particularly those which are potentially dangerous or hazardous. A liability waiver releases a party, typically the owner or operator of the commercial business or property, from liability for personal injuries or damages that may occur on its premises or while an individual engages in an activity. This functions to help the commercial establishment avoid potential liability for injuries to their customers.
In a properly drafted liability waiver, a customer will absolve, exculpate, or forgive in advance the business owner or operator of liability for claims arising from negligence. However, because liability waivers relieve a party of the obligation to use due care, they are generally disfavored by courts and strictly construed against the party seeking to rely on them – in this instance, the psilocybin service center. The liability waiver must also avoid purporting to waive liability for a party’s intentional, willful, reckless, or grossly negligent conduct, or otherwise avoid violating public policy. In general, therefore, for a liability waiver to be enforceable, it must be very carefully written.
Best Practices for Drafting Liability Waivers
To overcome the enforceability hurdle, a liability waiver must be clear and unambiguous, and it should explicitly acknowledge the signatory’s intent to relieve the released party from liability for its own negligence. Best practices when drafting liability waivers typically include:
- Written in plain language that lets a layperson understand the document;
- Ensure the waiver is not too long and does not contain excessive legal jargon;
- Specifically reference the type of activity, circumstances, or risks that it encompasses; and
- Use conspicuous typeface to help a reader notice the operative language, including by using large font, capital letters, and bold typeface, for important provisions.
The attorneys at Rogoway Law have extensive experience crafting liability waivers for various businesses across multiple industries, including cannabis, beverage, and psychedelics. If you have questions or want to discuss preparing a liability waiver for your psilocybin service center business, please get in touch with us.
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This post is co-authored by Managing Attorney Joe Rogoway, who is licensed to practice in the State of Oregon.
