Risks of Unincorporation in Amateur Sport: Thoughts of the Courts
Vicarious liability stands as a legal doctrine that stipulates the accountability of one party for the wrongful acts, typically negligence, committed by another. This principle often comes into play in the realm of sports, wherein a club might be deemed liable for a player's negligent actions during play. While this doctrine is predominantly applicable to employment relationships, the widely accepted perspective asserts that amateur sports clubs cannot be held responsible for the negligent behaviours of their players.
Such clubs lack an employment contract with their players and the requisite remuneration specified in a service contract, thus not qualifying as professional athletes. Despite arguments that amateur athletes could be seen as resembling employees, the restrictive interpretation of vicarious liability in Barclays Bank v Plc v Various Claimants makes this improbable. This leads to the belief among amateur clubs that they enjoy a form of immunity from vicarious liability.
However, this situation brings to light a concerning reality: numerous amateur sports clubs might inadvertently be subject to vicarious liability due to their status as unincorporated associations. In this regard, I will delve deeper into this issue, particularly focusing on:
• The nature of unincorporated associations
• The evolution of case law surrounding vicarious liability in this context
• The practical implications of this liability and the challenges it poses for clubs
• Possible solutions to address this problem.
Unincorporated Associations in the Context of Amateur Sports Clubs
As illustrated in Conservative and Unionist Central Office v Burrell, an unincorporated association is defined as a collective of individuals bound by mutual commitments for one or more shared non-commercial objectives, entailing mutual responsibilities and duties. Despite the contractual nature of the members' relationship, a contract is often acknowledged when an "implicit but adequately clear understanding" is established between two or more parties.
This framework generally encompasses volunteer-based and non-profit organizations, including amateur sports clubs. While concrete data on the prevalence of unincorporated associations in the realm of sports is unavailable, it's plausible to assume their abundance. According to Sport England, unincorporated associations are the most common structural form for amateur clubs, a trend also evident in reports from the Rugby Football Union, which notes that several rugby clubs adopt this structure. Furthermore, unincorporated associations extend beyond rugby clubs; even a village football team without a constitution and a fluctuating membership could qualify.
Vicarious Liability within Unincorporated Associations
The case of Various Claimants v Catholic Child Welfare Society (‘CCWS’) highlights the imposition of vicarious liability on the Institute of the Brothers of the Christian Schools, which was deemed vicariously liable for the physical and sexual abuse perpetrated by its members at a boarding school. The grounds for this liability were the members' likeness to employees. A key aspect emerges from Lord Phillips' central judgment in this case, asserting that even if the 'akin to employment' criterion wasn't met, an unincorporated association like the defendant could still be held accountable due to its very nature. Lord Phillips posits that as long as the defendant acts in pursuit of the shared objective of the unincorporated association's members, the imposition of vicarious liability is reasonable.
This perspective aligns with the views expressed by Hughes LJ in the Court of Appeal in CCWS and in the more recent case of The Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB. These judgments collectively suggest that the vicarious liability of unincorporated associations remains legally valid in England and Wales.
Understanding the Practical Aspects and Challenges
In practice, due to the absence of legal personality, unincorporated associations render their members vicariously liable, as opposed to treating the association as an individual entity. Consequently, members share joint and several liability for any harm caused. This implies that one member might bear the entire liability if others are unable to contribute. While the Supreme Court didn't extensively deliberate this concern in the CCWS case, it did emphasize accessing the Institute's funds. However, the issue of ensuring efficient distribution of liability remained largely untouched. This could have substantial ramifications, particularly for amateur sports, potentially leading to onerous liability burdens that jeopardize the existence of these clubs.
Proposed Solutions for Unincorporated Amateur Sports Clubs
One potential solution is for amateur clubs to consider incorporation, an approach endorsed by Morgan. Incorporation could entail safeguarding valuable assets, like clubhouses and pitches, from the risks associated with liability. This might involve utilizing separate charitable purpose trusts or a corporate structure that separates liability-generating functions from asset-holding entities.
However, this approach is not without its drawbacks. Some clubs may be deterred by the associated costs and administrative responsibilities. Furthermore, the efficacy of this solution hinges on legal awareness among amateur sports participants, which is often lacking. Merely advocating for incorporation might not yield significant results.
Alternatively, entrusting judicial discretion to prevent undue liability for recreational clubs could be a viable option. Judicial expertise in legal reasoning and nuance may enable judges to distinguish between different types of unincorporated associations. This approach was hinted at by Hughes LJ in R v L and can be seen in the context-specific approach taken by the Supreme Court of Ireland in Hickey v McGowan. By cautiously determining the liability of community-based amateur sports clubs versus global organizations, courts could strike a balance between safeguarding the financial well-being of amateur players and preserving the existence of these clubs.
Under the current legal framework in the UK, the vulnerability of amateur sports clubs to vicarious liability arising from players' on-field negligence is a substantial concern. Given their status as unincorporated associations, individual members could face collective liability for any ensuing harm. To avert this potential issue, incorporation might seem reasonable. However, the practical drawbacks and legal awareness considerations make it a less
straightforward solution. Instead, relying on judicial discretion, grounded in context and pragmatism, could offer a more nuanced and balanced approach to safeguarding amateur sports players' financial interests in England and Wales.