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Unincorporated Association: What is your legal liability if you are a committee member of a club or society?March 2, 2012
A recent case shows the problems of being a committee member of an unincorporated association if you are not careful. The Claimant was the president and trustee and committee member of his local rugby club. The club decided to have some building work completed.The Defendant was instructed to complete the works.The club agreed a fee and other amounts which may become payable under the terms of the contract.
The contract was signed by the treasurer of the club and witnessed by the Claimant.
The agreed sum was paid on completion but an additional sum was payable under the contract of £147,000 which was not paid.
The Defendant served a Statutory demand on the Claimant who applied to set it aside on the grounds that he was not personally liable.
He was held liable at first instance.
The matter went to appeal. It was held that members of the governing body of a unincorporated association are personally liable for payment under contracts entered into by them.
The Treasurer had entered into the contract under the authority of the committee so all members were personally liable.
Be careful when becoming a member of your local club.
Protect yourself by doing the following.
- Seek legal advice when becoming a office holder.
- Be sure that your club is in a healthy financial position.
- Be aware that you may be held personally liable so make sure you have insurance in place to cover any potential claim for example personal injury.
- Be aware that if your club does enter into as in this case a large contract that you have the funds in place to cover every eventuality to avoid you becoming liable.
- It may be the case that you should consider changing the legal structure of your club by perhaps becoming a company.Consider changing the rules of the association so that members of the committee are provided with indemnities by the club.