Club Had to Pay an Angry Member $50,000 Plus!

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A club had to pay $50,000 plus court costs to a member they had expelled and reinstate their membership. This is not the first time that a club has had to pay damages to an expelled member and had to reinstate them. This is not to say there are not members that we should not have from time to time. However, the penalties come about for several reasons and predominantly it is the club not following its constitution, or the constitution does not set out due process for managing a perceived recalcitrant member or a member they believe has not acted in the best interest of the club.

I have said numerous times at my Corporate Governance Workshop, that boards and committees need to understand that today we live in a litigation society where nobody is responsible for their own stupidity or people are prepared to fight for their rights and natural justice, more often than not the outcome can cost the club dearly and cause significant embarrassment.

No sporting club member would participate in a sport if they were not aware of the rules, a club constitution is the rules of the game so to speak for club directors and committees.

New changes to the Queensland incorporations act have strengthened members rights to natural justice in disciplinary matters, it is just one of several changes that is going to require most clubs incorporated under the Queensland act to substantially review their Constitution.

Many constitutions are old and too long, they are not easy to read and understand, they do not reflect modern language, standards, or ethics; they contain many rules that are not required or valid in a constitution any longer, and quite often limit the club board or committee to manage the business in an efficient and effective manner. In a worst-case scenario they can sometimes leave the club at risk and open to unreasonable challenges from members or litigation.

So, make sure you know your rules and follow the rules, or it could cost you dearly. If you have got some concerns about your constitution or want to learn more about what constitutes a good constitution, please get in touch with me here.

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