Membership Liability
Hello
I am a member of a local unincorporated association. I pay annual dues to be a member.
Of late the association has not been run very efficiently and there is a significant chance that the association might be wound up by one of its creditors and a liquidator called in.
The association has incurred a lot of infrastructure costs over the last couple of years which would be outstanding if it was wound up.
As a member what would my individual liability (and that of my fellow members) be? To be clear, I do not, nor have I ever held any sort of leadership or officer type position. I am just a vanilla member, as it were.
Finally, if it gets to this stage am I likely to be additionally liable for any contributions regarding recovery costs and legal fees incurred by the creditors pursuing the debt?
Many thanks
Phil
Where work has been done for
Where work has been done for or goods have been supplied to, such an association, the persons liable will be those who actually gave the order for the work or goods or those who either expressly or impliedly authorised the giving of the order on their behalf.
However the rules of the association may allow the person or persons liable to seek a contribution from all members.
You do therefore have to check carefully the rules or constitution by which the association is administered.
Thank you for the reply Ian
Thank you for the reply Ian and apologies for my delay in replying.
Are you saying that the law here is reliant on the terms outlined in the constitution of the association itself, i.e. if it is specified that there is no liability for ordinary members then that is likely to prevail if it goes to liquidation?
I am not sure there are any specific rules in this area or if there are that they specify anything much at all really. Nothing has been provided to us as members, perhaps they exist but not openly.
Is it a requirement for any unincorporated association to actually have these and if so to make them available for members to view?
Thanks
It certainly is a requirement
It certainly is a requirement for an unincorprated association to have rules.
Clearly all members must be entitled to a copy of those rules. However there are cases where an association is based on an oral agreement.This of course makes matters very difficult but usually there are written rules to which you should have access.
The association cannot be made bankrupt because it has no legal personality. The members can of course resolve to dissolve the association and on what terms.
Creditors will sue those individuals I referred to in my previous post. Those liable may seek an indemnity from the club funds or from individual members but only in accordance with the rules.
In my opinion an individual member who was not a party to any contract is unlikely to be liable to the member who did contract beyond the level of the normal subscription.
However you must check out the rules.