Unincorporated Associations ("UA's") such as golf and other sports clubs, charities, societies, religious orders, and non-profit associations are an important part of the fabric of Irish society.

Introduction

The current position in Irish law is that UA's which have not been incorporated into limited liability companies, leaves members of such UAs with potential personal liability for claims against UAs in contract or tort.

UAs have no separate legal existence from their members, and property is usually held in the name of trustees who are members of UAs. UAs cannot enter a contract or issue legal proceedings. Generally, the trustees or committee members of a UA would have to contract on its behalf or issue legal proceedings in their own names on behalf of the UA.

The Law Reform Commission ("LRC") has issued a consultation paper to examine the law on civil and criminal lability, as it applies to UAs having identified a lack of clarity around the legal activities of UAs in contract law, statutory compliance, ownership of property and criminal and regulatory enforcement.  To outline some of the unintended consequences of the current legal position of UAs it may be helpful to consider two similar civil cases against UAs which led to some very different outcomes.  

Brady -v- Moore & Scanlan [2022 IECH420]

The Plaintiff was a member of a UA, St Mary's Donore GAA club. The Defendants were representatives of that UA. The Plaintiff was assisting on a voluntary basis in removing slates from the roof of a clubhouse on premises when the Plaintiff fell through the roof to the ground and suffered significant injuries. The proceedings were based on his assertion that he was "a visitor" within the meaning of the Occupiers Liability Act 1995 ("the 1995 Act") and that the UA owed him a duty of care as a result.

The UA discovered that the terms of it's policy cover did not extend to the Plaintiff's claim. The Court reviewed the case law on liability of UAs and ultimately determined that the Plaintiff was a member of the GAA club and was therefore deemed to be an "occupier" of the club premises, rather than a "visitor" within the meaning of the 1995 Act.

The Court accepted that English and Northern Irish case law left open the possibility that there may be cases on which, based on special circumstances falling outside the usual activities of a UA or sports club, liability for negligence could be imposed. The Court noted that if liability on UAs were too readily imposed, people who might otherwise volunteer their time might be dissuaded from doing so, which would damage the social life and leisure pursuits of a very large proportion of the population. The Court held that the Plaintiff as a member of a UA could not sue a club of which he was a member because one cannot sue oneself following a long line of decisions of the Irish Courts.   

McGroarty -v- Kilcullen & Others [2021 IEHC679]

The Plaintiff lost his left index finger while voluntarily assisting with building works at Cobh Golf Club, a UA. He issued proceedings against four of the Defendants who were trustees of the golf club and the fifth named Defendant who was a qualified carpenter.  The Court held that the first to fourth Defendants, as trustees of the golf club and therefore nominees of the members, owed a duty of care to the Plaintiff and were negligent in causing the Plaintiff's injury.

The main issue in the case was whether the Plaintiff was in fact a member of the golf club at the time of the accident and therefore whether he could sue the trustees of the golf club. The Plaintiff argued that while he had previously been a member of the golf club, he was not a member at that time. The trustee Defendants admitted that he had not in fact paid his subscription by the 31st of January 2015, and that his membership had therefore terminated. The Court held that payment by the Plaintiff of a smaller sum than the subscription after the 31st of January 2015 did not automatically reinstate the Plaintiff into membership. The Court concluded that there was no evidence that the golf club members had agreed to ignore or change the club rules on membership from the requirements in the club's Constitution.

The Court held that the Plaintiff was not a member of the golf club at the date of the accident and was therefore entitled to recover damages against the Defendants with general damages being measured at €100,000.  

LRC Consultation Paper on Liability of Clubs, Societies and Other Unincorporated Associations

The LRC consultation paper reviews the practical challenges faced by UAs and the relative advantages and disadvantages of incorporating as a Company Limited by Guarantee ("CLG"). The LRC acknowledged that there were costs and regulatory burdens associated with incorporation as a CLG and that consideration should be given to other means of achieving protection to both members and third parties dealing with UAs for groups that might not wish to incorporate.  

The LRC proposed three alternative models for law reform as follows:

• Model One – the creation of a "non-profit registered association" which would have a separate legal personality from its members gained by registration. 
• Model Two – confer separate legal personality on UAs that fulfil specified criteria.
• Model Three – do not confer separate legal personality but specify how UAs are to be held liable in contract, tort and for offences with a series of focused reforms that do not alter the legal status of unincorporated bodies.

The LRC noted that regardless of any legal status that an unincorporated body might take, the use of a trust to hold funds and assets can put those funds and assets beyond the reach of litigants. This could be problematic to both members and third parties. The Supreme Court in the landmark decision in Hickey -v- McGowan [2017 IEFC6] (where the Supreme Court held the Plaintiff was entitled to obtain and seek judgment against individual members of a religious order rather than the order itself¬) accepted that whether or not any judgment would be met was dependent on terms of insurance and terms upon which assets were held. The Court suggested that whether this was not a desirable position as a matter of law or whether further changes should be made was a matter which could usefully be considered by those charged with law reform.  

The three models proposed for consideration by the LRC all have individual advantages and disadvantages.  

The LRC is inviting submissions on the questions posed in the consultation paper by Wednesday 15 March 2023.

Conclusions

The current position in relation to UAs is unsatisfactory. What is required is a system of registration of the UAs which is clear and transparent, and which limits potential personal liability of trustees, nominees or committee members and which allows UAs to hold property as an independent legal entity separate from its members. We would suggest that Model Two is the most practical of the models proposed, but that a separate register of UAs be maintained in a manner which is similar to the registry of friendly societies or the mutuals public register in the UK.  

As UAs cover a multitude of different activities including sporting, social and charitable works, this is an area which clearly does require further consideration and reform and we will continue to monitor developments.