Sports club governance: COVID-19 liabilities of incorporated Australian sporting associations
With sports associations among the first to be affected by COVID-19 outbreaks, the virus and its variants are considered the single biggest challenge to contemporary community sport globally.
Sports club governance and the structure of sporting associations can affect the levels of liability within an association. Incorporated sporting associations have a unique independent legal structure that significantly reduces personal liability for members. But even with such a structure, how should Australian sporting associations enact their duty of care requirements to reduce risks of COVID-19 liability when returning to play?
Economic impact of COVID-19 on Australian sports
Community sport in Australia typically generates an estimated $18.7 billion value per annum according to the Australian Institute of Sport. But by July 2020 it was estimated that COVID-19 had already cost community sports clubs $1.6 billion.
A recent Deloitte report found that COVID-19 related financial impacts on sport include:
- losses from cancelled games and events
- losses from player registrations and fees
- potential loss of sponsorship deals
- the financial impact of new COVID-19 regulations on both professional and community sports clubs.
Netball NSW was one of the first community sports peak bodies in Australia to shut down their sport, announcing their decision on 18th March 2020, just seven days after WHO had declared COVID-19 a global pandemic. A few months later, in a 2020 open letter to the NSW State Premier, Netball NSW asked for urgent safe regulations for the return of sport in the state, declaring they and their member clubs were facing a “financial crisis”.
How sporting associations can get back in the game safely
The Australian Institute of Sport has developed a Framework for the Rebooting of Sport in a COVID-19 environment for all sporting associations. Guidelines include:
- significant enhanced risk mitigation
- limiting spectators to a minimum for community sport
- assessing the sporting environment to ensure precautions are taken to minimize risk to those participating in sport and attending as spectators
- thorough planning and safe implementation: reintroducing community sport in a methodical manner based on the best available evidence to optimise community safety.
Duty of care for non-profit sporting associations
A duty of care exists between various parties within sport, including sport governing bodies.
Before rushing into play, incorporated Australian non-profit sports associations must ensure they have fulfilled their duty of care. They must mitigate risks where possible for COVID-19 and minimise their own liability in the case of any outbreaks.
Most sporting associations in NSW are incorporated, all but eliminating personal liability for members. However, according to the NSW Office of Sport, when you agree to be an office bearer on the committee or board of an incorporated association, such as a sporting club, you will have a duty of care on behalf of its members. While the incorporated entity bears the brunt of legal liabilities, an office bearer can be found personally liable if found to be in serious breach of their duty of care.
Volunteers and regular committee members are not office bearers and therefore run an extremely low to zero risk of legal liability.
However, it is key that incorporated sporting associations ensure they have identified and fulfilled all possible duty of care requirements when it comes to COVID-19.
Develop a COVID-19 safety plan
Nonprofit sporting associations are required to document and implement a COVID-19 safety plan. The AIS provides a template for the plan, which helps sports organisations define the roles and responsibilities from the board through to those of the safety coordinator, members, and participants. The plan provides a way to minimise and eliminate risk of transmission as well as detailed steps for how to respond in the event of a COVID-19 case or transmission.
COVID-19 safety coordinators’ liability
The AIS framework suggests that nonprofit sporting associations nominate COVID-19 Safety Coordinators to oversee the development and implementation of the safety plan. They are required to review the effectiveness of plans and advise the committee or board as well as acting as a contact point for members and participants.
It’s unlikely that a Safety Coordinator could be held personally liable when working or volunteering for an incorporated non-profit sporting association. However, recklessness or serious breach of duty of care could create personal liability of the safety coordinator is a designated Office Bearer within the incorporation. If the Safety Coordinator, no matter their appointment within the organisation, acts with due care and diligence then they would be protected from liability.
Insurance is a common risk management tool to minimise an incorporated sporting association’s liability. We recommend seeking professional legal advice to determine what cover is appropriate to your organisation. Ask your insurance provider to review your current insurance policies to identify whether additional insurances are available to protect you from impact or flow-on effects of COVID-19.
Many sports require participants to sign a waiver. By so doing the participant shows they understand the obvious risks of playing the sport and are willing to participate anyway.
From a legal perspective, however, it’s not yet clear whether your nonprofit sports organisation can include COVID-19 side effects or illness in its existing waiver.
We believe associations would do well to ask members and participants to sign their respective COVID-19 guidelines, by which participants agree to follow the guidelines when taking part in the sport. For detailed guidance, please get in touch with us directly.
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