The legal status of many amateur sports clubs in Scotland may soon be about to change following the publication yesterday of the consultation paper “Reforming the Law on Scottish Unincorporated Associations and Criminal Liability of Scottish Partnerships”
At present, the majority of sports clubs in Scotland are unincorporated associations which are usually governed by a set of formal rules (constitution) and run by a management committee. Whilst establishing one is relatively quick and cost-effective, it is often overlooked that an unincorporated association does not have separate legal personality.
The lack of separate legal personality means that an unincorporated association cannot, as an entity, enter into contractual arrangements, own property or be held liable for the actions of its office-bearers and/or members. As a result, individual members of an unincorporated association (more often than not it will be the committee members who make the decisions) can become personally liable for their association’s actions should something go wrong.
Scottish Law Commission’s 2009 report
The Scottish Law Commission published a report and a draft bill in 2009 which summarised the current law concerning unincorporated associations and made a number of proposals including the creation of a new legal entity named Scottish Associations with Legal Personality (SALPs) for unincorporated associations who met certain criteria such as being non-profit and adopting a constitutive document with specified conditions.
In contrast to the legal status of an unincorporated association, a SALP would have separate legal personality and as such, its members would benefit from a form of limited liability.
As several years have passed since the publication of the Scottish Law Commission’s report and draft bill and some changes to this area of law have taken place (such as the creation of Scottish Charitable Incorporated Organisations or SCIOs as they are more commonly known), the UK Government has decided to issue the consultation paper in order to determine whether there remains support for SALPs.
It is worth noting that the consultation paper is not wholly concerned with unincorporated associations and also seeks views on reform of the law on criminal liability of dissolved Scottish partnerships and their partners.
So what happens next?
Whether you are a member of a sports club which is currently an unincorporated association or you just simply have an interest in the subject matter, now is the opportunity to have your say on the proposed changes.
The consultation period ends on 2 July 2012. If support for the proposed changes remains strong, it is entirely possible that a bill could be finalised and put forward before Parliament within its current term.