Dreamworld ride tragedy: 'Reputational cost' could shut down park

The Dreamworld accident (AAP)
The Dreamworld accident (AAP)

Dreamworld's future viability rests on how its management team responds to Tuesday's ride tragedy, a crisis management expert says.

The park is closed indefinitely while Workplace Health and Safety investigates the incident where four people were killed on the Thunder River Rapids, but will reopen for a memorial day on Friday.

Shares in Dreamworld operator Ardent Leisure continue to tumble, dropping 67 Australian cents and wiping approximately AU$310 million off the company's market value.

Crisis management expert Trish Sherson says that fall demonstrates "the reputational cost to companies".

While a company might have insurance to cover the cost of liability, Ms Sherson says events like this can have an immediate hit on share prices.

"This is another example that we do live in a reputation economy, and when a significant event happens, there's a quantifiable cost."

She says it's too early to say if Dreamworld can regain public trust, but it depends on how you handle yourself through a crisis.

She pointed out that Dreamworld's chief executive immediately fronted up after the accident and talked about taking responsibility, but to assure the public she says you have to: "Do it, be it, say it."

Gold Coast accident compensation law expert Allison Barrett says Dreamworld could be fined a maximum penalty of $3 million if proven guilty of causing reckless endangerment.

"Generally in a case like this they are not freak accidents, these things don't just happen," Ms Barrett told The New Daily.

"Ultimately the focus at this stage is to provide answers to all Australians, not just the victims and the people involved in this."

Queensland Police Assistant Commissioner Brian Codd said police would be focused on getting to the bottom of what happened, including investigating claims the ride malfunctioned earlier on Tuesday and was due to be shut down for maintenance.

"We owe it to the deceased and their families, we owe it to the community of Queensland, to get to the bottom of what caused this," Asst Cmmr Codd says.

"If and where there is criminal aspects, including negligence, which warrants being pursued, we will do that."

Under Australian law, an individual director of Dreamworld could face a fine of up to $600,000 or five years' jail if found guilty of causing risk of death or injury to people.

The park is closed indefinitely while Workplace Health and Safety investigates the incident, but will reopen for a memorial day on Friday.

The park said late on Wednesday the ride had passed a safety and mechanical test last month.

Newshub.