Corporate Governance in Sport

1. Corporate Governance in Sport Sport and the Law • O’Reilly Stewart Solicitors • Northern Ireland Sports Forum • 5th November 2009

2. Corporate Governance in Sport Corporate Governance in Sport • Linus Murray • Northern Ireland Sports Forum • 5th November 2009

3. Non Incorporated Clubsand Governing Bodies – the Risks ·Breach of Contract. ·Occupier’s Liability. ·Employees. ·Funding prospects.

4. What is a Company Limited by Guarantee? · A private limited company separate from its officers and members. ·No shares or shareholders, rather there are members who act as limited guarantors of the Company’ · Each member’s guarantee may be limited to as little as £1. ·Profits or funds raised are not distributed to the members but are retained to be used for the purposes of the Company.

5. Advantages of Incorporation ·Attractiveness to funders – e.g. Sports Council NI. ·Personal Liability of members is limited – breach of contract, debts, employees, occupiers liability. · Property – legal ownership lies with the Company. No transfer of Legal Title required when members, trustees etc retire or leave the organisation. ·Rights and responsibilities of members/directors are clearly defined.

6. Disadvantages of Incorporation ·Set-up costs – including drafting of tailored memorandum and articles of association. · “Red Tape” – additional administrative obligations such as filing of Annual Returns at Companies Registry. · Officers of the Company must be aware of potential liabilities if act improperly. ·Stationery (letters, notices, invoices etc) of the incorporating body must be altered to include statutorily required information.

7. Director’s Duties The Companies Act 2006 has placed the duties directors owe to their companies on a statutory footing. All those intending to act as directors should be aware of the 7 statutory duties: Duty to act within their powers and use their powers only for the purposes for which they were conferred; · Duty to promote the success of the company for the benefit of its members; · Duty to exercise independent judgement;

8. Director’s Duties (continued) Duty to exercise reasonable care, skill and diligence; ·Duty to avoid conflicts of interest; · Duty not to accept benefits from 3rd Parties; and · Duty to declare any interest any interest in a proposed transaction.

9. Director’s Potential for Personal Liability Wrongful Trading Fraudulent Trading

10. Practical Steps to Incorporation Memorandum and Articles of Association to be drafted, tailored specifically to the needs of the club or governing body Rules of the club or body to be drafted or redrafted as required Incorporate by submitting all the necessary documentation to Companies Registry Deal with the transfer of any property, employees or other contracts to the new company

11. Shauna McAleese Northern Ireland Sports Forum 5th November 2009 Employment and Sport

12. Employee – defining features Self Employed Volunteer Employment Status

13. Commencing Employment Contract formed – whether in writing or not Employee rights Written Statement of Employment Particulars Staff Handbook and Policies Advantages Cannot change terms of contract without an employee’s consent.

14. Statutory Disciplinary Procedure Write to the employee informing of allegations and invite to a meeting. Inform of the basis of the allegation before the meeting. Employee right to be accompanied. Inform of decision. Right to appeal. Hold appeal meeting. Inform of decision.

15. Statutory Grievance Procedure You get grievance in writing. You should invite to the a meeting to discuss. Employee right to be accompanied. Inform of decision – in writing. Right to appeal outcome. Hold appeal meeting. Inform of decision

16. Statutory Dismissal Procedure Same as statutory disciplinary procedure. Give reasons for dismissal in writing. Failure to follow procedure – can lead to a finding of automatic unfair dismissal. Labour Relations Agency have a Code of Practice in relation to these statutory procedures. If not followed, can be taken into account at a tribunal. See http://www.lra.org.uk under the Publications section.

17. Employment Claims • Unfair Dismissal – 1 year. Employer must show reason for dismissal was fair: • - Capability • - Conduct • - Redundancy • - Contravention of a duty or restriction imposed by or under an enactment • - Some other substantial reason • Some dismissals are automatically unfair

18. Employment Claims Constructive Dismissal – 1 year service Discrimination – Age, Sex, Race, Disability, Sexual Orientation, Religion – No length of service requirement. Breach of Contract – unpaid wages, holidays, notice pay, redundancy pay. Transfers – be aware of Transfer of Undertakings Protection of Employment Regulations (TUPE) especially if incorporating.

19. Key points Keep records – audit trail – evidence at tribunal Get Legal Advice at the right time Follow Statutory Procedures If you have Company/Club procedures – 1. Make sure they comply with the law – get updated if necessary. 2. Follow them

20. Child Protection in Sport Child Protection in Sport • Tom Anderson • Northern Ireland Sports Forum • 5th November 2009

21. Framework United Nations Convention on the rights of the child 1989 Children (NI) Order 1995 Protection Of Children and Vulnerable Groups (NI) Order 2003 Human Rights Act 1998

22. Safeguarding Children Children have the right to have fun and be safe when engaging in sport. Child Protection is about best practice. Be realistic, exercise common sense Be aware Be able to recognise and respond to child protection concerns Have an understanding of how best to address safeguarding issues and what steps to take

23. Recruitment Confirm their identity Ask how they think they can contribute to the development of the Club Obtain written qualifications Obtain 2 references Obtain vetting Set if possible a trial period The Club should provide support for Coaches and members alike

24. Codes of Conduct for Coaches/Volunteers Respect the rights and dignity of every person equally within the Club Obtain up to date coaching qualifications and hold appropriate insurance cover Be an excellent role model, no smoking, drinking, bad language Work in an open environment avoiding private or unobserved situations Maintain safe and appropriate distance with players Make training, coaching fun and fair Involve the parents/guardians wherever possible Give enthusiastic and constructive feedback Keep a written record of any injury that occurs and notify the parent/guardian Challenge bullying in any form

25. Defining the problem Physical abuse Emotional abuse Neglect Sexual abuse Mixture

26. Recognising and Responding Physical Abuse is deliberate Physical injury eg hitting, shaking, confinement, inappropriately giving drugs Emotional abuse is persistent emotional ill-treatment causing severe and persistent adverse effects on the child’s emotional development It may involve conveying that the children are worthless or unloved. Children should feel secure and involved. Neglect - persistent failure to meet a child’s physical and/or psychological needs resulting in significant harm to the child eg: failure to provide proper food/shelter and clothing, lack of stimulation or lack of supervision. Sexual – Forcing or enticing a child to take part in sexual activities which may involve physical contact or looking at pornographic material or encouraging the child to behave in a sexual inappropriate way

27. Responding to Concerns There is a responsibility on the Club to protect children in order that the appropriate agencies can make enquires once the disclosure has been made to the designated Officer within the Club

28. Good Practice Club should have a written Constitution Club should have a Child Protection Officer and Complaints procedure and Code of Conduct to deal with disclosures and misconduct issues Club should have a disciplinary procedure and disciplinary committee which can refer the case to an outside agency Policy statement which is Child centred Recording procedures and pro-formas to deal with recruitment and training Access NI disclosure Certificate application form

29. Key Responsibilities To devise, implement and review policies and procedures to safeguard children and maintain standards To exercise good practice To report concerns To safeguard the welfare of the child To discharge your duty of care

30. Vulnerability of those with a disability It is recognised that Children with a disability: Have the same needs and require the same safeguards as all children But may also have additional needs associated with their disability which may increase their vulnerability to abuse They are often dependant on adults

31. Remember It is not your responsibility to decide whether abuse as occurred It is your responsibility to act if you have concerns NSPCC Helpline 0808 800 5000 Child Protection in Sport Unit 028 90 351135 Childline 0800 1111

32. James Turner Litigation and Sport www.oreillystewart.com

33. Volenti Non Fit Injuria “To a willing person no injury can be done” • Basic principles of Negligence; • Duty • Breach • Damage • Donoghue v Stevenson [1932]; Per Lord Atkin: “persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected” • Sporting Context – Volens to the risk?

34. Volenti Non Fit Injuria“To a willing person no injury can be done” KEY FACTORS : Caldwell v Maguire and Fitzgerald [2001] PIQR 45 Each contestant owes a duty of care to each and all other contestants That duty is to exercise all care that is objectively reasonable in the prevailing circumstances for the avoidance of injury to fellow contestants. The “prevailing circumstances” include the sports object, the demands made upon contestants, inherent dangers (if any), rules, conventions and customs, and the standards, skills and judgment reasonable to be expected of a contestant… Given the nature of such prevailing circumstances the threshold for liability is in practice inevitably high; the proof of a breach of duty will not flow from proof of no more than an error of judgment or mere proof.

35. EXAMPLES www.oreillystewart.com FOOTBALL Condon v Basi [1985] 1 WLD 666 CA - “by engaging in a sport… the participants may be held to have accepted risks which are inherent in that sport…but this does not eliminate all duty of care of the one participant to the other.” Paul Marcellis Elliot v Dean Saunders & Liverpool Football Club [1994] – Mistimed tackles or errors of judgment are part of the game. Ben Collett v Gary Smith and Middlesbrough Football and Athletics Company[2008] EWHC 1962 (QB); Contrasts the above, Injured party awarded £4.5 million in compensation.

36. EXAMPLES • RUGBY • Smolden v Whitworth & Nolan [1994] – referee negligence, collapsed scrum • Vowles v Evans and the Welsh Rugby Union [2002] - as above • Rougerie v Greening & Wasps [2007] - Conduct outwith the laws of the game www.oreillystewart.com

37. Vicarious Liability Doctrine of vicarious liability provides that the employer of a Defendant is liable for the Defendant/Employee’s tortious actions if they are performed during the course of employment. A vicarious liability claim is limited to its reliance on the contract of employment regarding professional players employed by a sports club to play sport. Three stages of vicarious liability: 1. The Defendant/employee must have committed an actionable tort. 2.  The employee is employed by the employer. 3. The tort is to have been committed during the course of employment.

38. Vicarious Liability In sport an employer/ governing body may be held liable if an employee performs an authorised act in an unauthorised way. A club will not be held to be vicariously liable if an act is performed out a personal vendetta. A club may be held liable for an assault if it thrown as part of a “melee of the kind which frequently occurs during rugby matches” even though it happened after the whistle had blown. For participants in unpaid sports this cause of action will not be available. Referees may be held vicariously liable incidents which occur during a game

39. Occupiers’ Liability STATUTORY OBLIGATIONS Occupiers’ Liability Act (NI) 1957 Operates with respect to lawful visitors to the Defendant’s premises Occupiers’ Liability (NI) Order 1987 Governs liability to non-visitors ie trespassers Wheat v E Lacon & Co Ltd [1966] AC 552 HL The test is whether a person has some degree of control associated with and arising from his presence in and use of or activity in the premises. There may be two or more occupiers simultaneously and exclusive occupation is not required.

40. Duty of Care Section 2 Occupiers Liability Act (NI) 1957 Not an absolute duty. Take such care as in all circumstances of the case is reasonable to ensure that the visitor will be reasonably safe in using the premises for the purposes which he is invited or permitted by the Occupier. Breach of the Occupiers duty under the Act where the occupier is using the premises for his business will give rise to liability. Granting access to premises for educational, recreational use is considered for the business purpose of the occupier. Caparo Industries Plc v Dickman [1990] ‘…there should exist between the party owing the duty and the party to whom the duty is owed, a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’ and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty…’

41. Duty of Care Cunningham and others v Reading Football Club [1991] Judge Drake held that, ‘…those who control football grounds remain under the clear duty to take such steps as are reasonable in all the circumstances to see that lawful visitors to their grounds, spectators and others alike, will be reasonably safe in those premises.’ Williams v Cardiff Corporation [1950] Higher standard of care in relation to children and children/young adults with disability. Regard must be had to the physical and mental powers of the child visitor. For what is not a danger to an adult may well be a danger to a child.

42. Case Law – Duty of Care Occupier does not escape liability for dangerous hazards on his premises by handing over control of the premises to another. Glenie v Slack & anor [2000] unreported Owner of racetrack handed over control of circuit to promoter. However occupier held liable for dangerous hazards construction of the race track which breached the sports governing body's safety records Davis v Feasey & anor [1998] unreported Motor track designed by defendant, claimant suffered injury at corner. Judge ruled that Defendant owed duty of care. That injury sustained was a result of the poor design of the race course, and that this danger was reasonably foreseeable. Simple steps should have been taken to prevent hazard.

43. Case Law – Duty of Care Gymnasia/Sporting Equipment Duty of Occupier is to provide equipment, floor space etc which is reasonably safe in the circumstances. Gilmore v London City Council [1938] Swimming Pools Ensure pool of appropriate dimensions – O’Shea (1995) Depth clearly marked and identifiable – Banks v Bury Borough Council (1990) Subject to regular cleaning which meets manufacturers standards – Taylor v Bath and North East Somerset District Council (1999) unreported Sports Pitches Dibble v Carmarthern Town Council (2001) Goalkeeper settled claim after suffering horrific burns from pitch markings when dived to make save. Cook, Cochrane and Hampson v Doncaster Borough Council (1993) Jockeys made claim for injuries resulting from defect in race track which caused horses to stumble and fall

44. Safety of Sports Grounds (NI) Order 2006 This legislation created the provision that a Safety Certificate must be issued by the local Council in relation to large sports stadia. Each Certificate may specify the maximum number of spectators, the size of the grounds, entrances and stands etc. Each Council to inspect each sports ground individually to identify requirements

45. Supervision and Warnings Occupiers can protect themselves from liability by the use of warnings.  Section (4) Occupiers’ Liability Northern Ireland Act 1957 Inadequate supervision will place occupier at risk Clear and unambiguous warning of dangers must be given and appropriate instruction as to how hazards should be approached

46. Conclusion Occupiers – local authorities, clubs, owners have wide range of responsibilities Liability in respect of accidents occurring within a sporting area has potential to be enormous Must avoid liability by ensuring the facilities are of high quality and that advice provided by Manufacturers, health and safety executive and sports governing bodies are strictly adhered to.

47. Full Contact Details: O’Reilly Stewart Solicitors Courtside House 75-77 May Street Belfast BT1 3JL Tel: 02890321000 Fax: 02890323003 www.oreillystewart.com

48. Full Contact Details: Linus Murray: linus.murray@oreillystewart.com Shauna McAleese: shauna.mcaleese@oreillystewart.com Tom Anderson: tom.anderson@oreillystewart.com James Turner: james.turner@oreillystewart.com