If you are a committee member in a sports club which is an unincorporated association you do need to keep your eye on the ball (sorry!).

When discussing unincorporated associations there is often a focus on the negative but there may be advantages and the question for your club is: – Is an unincorporated association the correct structure for the club compared with the alternatives?

There are a few key points to keep in mind when you are involved in an unincorporated association but let’s look at the one that is often at the front of the mind – personal liability of the committee members.

Liability

The consequence of an unincorporated association not being able to contract / own land is that such transactions will be in the name of committee members personally, potentially leaving them open to personal liability in respect of these contracts. In addition, they may find themselves facing other liabilities, including:

1. They may be targeted by creditors for any of the club’s debts (such a claim could be on a shotgun approach (a claim against all of the committee members etc.) or a more targeted approach (a claim against one or a few committee members)).
2. They may be subject to claims from employees in the event of a breach of an employment contract.
3. They could be held liable in the event of the wrongful action of a member.
4. Incoming committee members need to be aware that they may be held liable for historical liabilities that they have nothing to do with.

If you are a committee member, please remember that it does not necessarily matter whether your name / signature is on the contract in question – if the committee has authorised the contract, each member of that body may be held liable.

Minimising the Risk

So how do you minimise the risk:

1. Committee members need to know what is expected of them, what liabilities they may face and what authority they have (and that this knowledge is kept up to date).

2. You need to ensure the constitution and other governance documents protect the association and its members appropriately.

3. You need to ensure that appropriate insurance is in place.

4. You need to make sure that you contact your advisors with any questions you may have – seeking advice from your solicitor/accountant/insurance broker etc. in advance will, generally, be cheaper than having to contact them after something has gone wrong and have them resolve it – you have to have someone in your corner (sorry!!).

5. You need to make sure that the structure and governance of the club is reviewed regularly.

Ultimately, you need to be careful but it is important to make sure that the enjoyment / promotion of your sport is not unnecessarily hindered.

If you are part of a sports club and have any queries regarding your club’s legal structure please contact:

Angus McGuire – alm@businesslaw.co.uk
Steven Wicks – saw@businesslaw.co.uk

If your unincorporated association is a charity, we would recommend reading Angus’ blog on SCIOs found here or, better yet, call us for a chat!