The legal pothole threatening to upend e-scooter riders

Legal experts are warning of a major liability risk to e-scooter riders in Queensland, with almost no riders covered for third-party damage or injury.

Anyone who registers a car in Queensland has compulsory third-party (CTP) insurance, which provides financial protection if they are in an accident and injure someone or damage their property.

Some 1000 e-scooter rideshares are scattered around Brisbane.Credit: Lydia Lynch

However, legal analysis suggests that insurance specifically does not cover you if you are riding an e-scooter.

“The problem comes where a rider has an accident which they are responsible for, so if they hit a pedestrian or hit property like a car,” personal injury lawyer Travis Schultz said.

“In those circumstances the rider is not an agent of [the e-scooter company] and to my knowledge there is no contractual indemnity to them.”

Mr Schultz said that meant the rider of the scooter was liable for any damages to property, and medical bills of anyone they hit.

Issues with e-scooters in Brisbane have so far been confined to riders themselves being injured, and in one case a man died after falling off a scooter he was riding.

Michael Morris, an associate with Hill House Legal Partners, posted a detailed breakdown of the CTP issue on his firm’s website.

“The simple solution, at least from the perspective of riders and injured persons, is for the [Queensland] government to extend the CTP insurance regime to cover electric scooters,” Mr Morris wrote.

“This will give riders the protection of being covered by insurance and give victims the comfort that there will be a financial capacity to meet their claim.”

However, Jeremy Roche from Atwood Lawyers in June wrote a separate analysis of the issue in which he argued the laws set up to make the e-scooters legal to ride in Queensland mean they are specifically not covered by CTP.

In amending the Queensland Transport act last year, Mr Roche argued, the state government classified e-scooters as “personal mobility devices”.

“E-scooter riders aren’t allowed to drive on roads with speed limits over 50km/h, and must keep to the left, of a road or footpath, to avoid being a traffic hazard,” Mr Roche wrote.

“As it stands, a legal provision to class e-scooters as a 'personal mobility device' has allowed manufacturers to dodge registration and Compulsory Third Party insurance cover.”

Mr Morris went one step further, suggesting that riders who hit a pedestrian or damaged property could be sued up to three times - by the wronged party, by Brisbane City Council and by the e-scooter company.

“Not only might a rider not be insured and have to pay any damages out of their own pocket, if the injured person sued the owner or local council, the rider may have to cover the owner’s or local council’s legal costs and any damages they pay,” Mr Morris wrote.

“This liability can arise because of indemnities [promises to protect against legal liability] given by the rider under the agreement with the scooter owner.”

However, Mr Schultz said it was “extremely unlikely” a third party would be able to sue either the council or the e-scooter company, and even more unlikely that either organisation would seek to recoup costs from an individual rider.

Rather, he said, the issue highlighted the fact there was a glaring legal hole in what was becoming a popular method of moving around the city.

“It’s outrageous that we can have a multinational unicorn company profiting in this marketplace by passing the cost of the damage they’re doing onto the public purse,” he said.

Brisbane City Council did not directly address questions about CTP insurance as it related to e-scooters, sending a brief statement saying its operating agreements with Lime and Neuron, the two companies licensed to operate in the city, required them to purchase public liability insurance.

Lime public affairs manager Nelson Savanh said the company had a $20 million public liability fund, as well as a $1 million fund for other purposes, which could be used to cover third party claims.

"In some situations where Lime might not be technically liable, we do have that ability to support riders," Mr Savanh said.

"Any inclusion in the CTP scheme would be a discussion for government."

Neuron was contacted for this article.

Both Lime and Neuron have detailed user agreements on their websites outlining that they accept no third-party responsibility for injury or damage caused while using their scooters.

Lime’s agreement reads “1.4.6: To the fullest extent permitted by applicable law and without limiting anything else in this Agreement, Lime reserves the right to hold You fully responsible for all damage, losses, claims and liability arising from Your use of any Vehicle, including, without limitation: (a) physical or mechanical damage; (b) loss due to theft; (c) physical damage resulting from vandalism; (d) bodily injury of You or a third party; (e) third party claims”.

Neuron’s agreement reads “16.4: To the fullest extent permitted by law, you release us from all claims (including claims under statute that can be waived by you and negligence claims) arising out of, or in any way related to, your use of the products and services”.