THE LEGAL STATUS OF BRIDGE CLUBS : THE RISKS AND DANGERS OF BEING AN UNINCORPORATED ASSOCIATION........ ( Article by Professor Hu Chi Ku Chi )

Any sports and social club has a choice over its legal status : the options being ( i) an unincorporated association (ii) a charity, or (iii) a private limited company. However, the purpose of this article is not to look and the pros and cons of each, but to explore the implications of being an unincorporated association.
Having no separate legal identity or personality puts the club members into a very awkward situation right from the start. Since the club is not a legal entity in any shape or form it cannot sue or be sued, or hold property in its own name. Accordingly, when an outsider is trying to sue the club the first crucial question to answer is this : who is actually liable ? 
Certain individuals in the club must therefore be made legally responsible for the actions alleged to be wrongful. Instances of ordinary members becoming liable for debts incurred are very unlikely, especially when the officers of the club have consented, under the provisions of the constitution , to take on full management responsibilities.    
Often third parties are sometimes unsure as to which individual members and officers to sue, never confident of the legal outcome of their actions, even when successful. For instance, can the damages and costs awarded to them be met by the losing defendants ?
Sadly, the law relating to unincorporated associations is both a scant and confusing, and because of the lack of case law it is difficult to be definitive on what questions need to be explored, and how those questions might be answered.  Can clubs borrow money ? What powers of borrowing, if any, have been conferred on the committee, or the club's trustees, and what limits and restrictions are in place ? Does substantial borrowing have to be secured against club property?  Do committee members or officers have put themselves up as guarantors, or as named individuals who are prepared to be personally liable in the event of any repayment default ?
The distress, so often felt by many concerned members,  is often compounded by uncertainty and hopeless attempts to determine what their actual liability is. Ask the complacent club member and you will get two conflicting views of the position : either they are not liable for any debt, or they all face the risk of unlimited liability. Some quite rightly believe that a member's liability should be limited to the amount of the subscription, because when he joins a club he does not intend to incur any liability beyond his subscriptions payable under the rules. However, given that a member or an officer could be found liable for a debt,  his liability is usually unlimited.
Then there's the issue of differentiating  between members' donations and members loaning money to the club. Donations should be considered as income as no liability is incurred on receipt of the funds handed over. Loans however do involve some form of contractual undertaking, where the funds received place a financial short-term ( or long-term liability ) on the club's balance sheet. Indeed, when ever the club borrows money, from whatever source, legal advice would well be advised. Any loan taken out by the committee, or the club's trustees, needs to be an authorised and/or permitted activity within both the club's internal rules, and the law of the land. But in what ways might this authorisation come about ? Given that loans are contracts  will members,  who subsequently ratify such transactions entered into on their behalf without previous authority, become equally liable ? Tough questions even for those some basic knowledge of the relevant law. 
The irony of course is that unincorporated associations are usually managed and run by willing, enthusiastic volunteers, who by having little or no idea of the law allow obscure and difficult legal issues to be ignored, or overlooked. Ignorance in law is never an excuse. Therefore, when risks and dangers lurk in the uncharted waters of legal uncertainty, it is perhaps better to sail in well mapped seas, preferably in a ship registered as a private limited company.