Individual BNP members may be liable for Griffin's debtsIf you get Robert Henderson’s output, then you may already have seen these items, but if not — or if you skim them due to the huge volume of texts he transmits every day — then the following may be of interest, perhaps especially the first one dealing with the law as regards “Unincorporated Associations” (which is what the BNP is). To an extent this answers the question I put to you recently regarding the difficulties or benefits which may accrue to Griffin as a result of his bankruptcy.
The second item, article by Sonia Gable in Searchlight, is a sharp as she usually is on financial matters. (I gather she is/was an accountancy official of HM Inland Revenue.) It shows how low Griffin has sunk: he has enabled a Jewish commentator to excoriate a Gentile on dodgy financial practices, including serial bankruptcies!
The third item, a New Statesman article on the collapse of the Far Right in the UK, gives all kinds of reasons for the present situation, but does not seem even to touch on the mayhem Griffin created — especially in the area of finances — upon his election to the Chairmanship of the BNP in September 1999. A decade of scams, swindles and destruction followed. I devoted much of my time in that decade to trying to warn people. It did me nor the Cause any good. As I remarked recently in an e-mail to one of our friends:
Griffin is not just a financial crook —i.e. a swindler and a con-man — and an associate of criminals. He also also a political crook. He has a pathological personality. This means he has no conscience or capacity for empathy. This makes him a compulsive predator.
Many people who supported Griffin’s BNP in the previous decade still greatly resent my exposées of him during that time in my Electronic Loose Cannon bulletins, not because my analysis was wrong, but because events have shown even those naïve people that I was right — because my commentaries disturbed their happy dreams when the dreaming seemed good. Now they are rubbing the sleep from their eyes. Amazingly, they resent me more for causing them embarrassment than they resent Griffin for robbing them financially and cheating them politically. Such is human nature!
For these people, there’s only one crime worse than being wrong in politics — and that is being right.
P.S. As you see, I have Cc’d this to a few contacts. If any of them have info/comments to add, I’m sure we should be pleased to hear from them.
R.H. Jeffs & Rowe (“Leading Club Accountants”)
201. Limited Liability
202. Unincorporated Associations – Advantages and Disadvantage
203. Unincorporated Associations – Liability of Members, Officers and Trustees
201. LIMITED LIABILITY
Many sports clubs are non profit making members clubs, ruled by a constitution, but having no legal existence and being unable to enter into contracts unless in the name of its officers or trustees ie they are unincorporated associations. Recent events in the world of Rugby have highlighted the main weakness of unincorporated associations which is – Personal Liability. The insolvencies of certain high profile rugby clubs have shown that officials may (as a last resort) be sued for club debts and theoretically all members may be liable. In one case creditors took individual members to court and they were means tested as to their ability to pay. With the commercialisation of the game of rugby, financial inducements have grown, contract of sponsorship have been made, players contracts are being drawn up and it may be time to reconsider whether the unincorporated members sports club is the most appropriate organisation to manage the current game.
202. UNINCORPORATED ASSOCIATIONS
– ADVANTAGES AND DISADVANTAGES
The advantage of an unincorporated club are:-
1. They are simple to set up, being founded by agreement between the members, no further steps such as registration are required.
2. Privacy – an unincorporated association does not have to file accounts and other information with Companies House or with the Registrar of Friendly Societies.
3. In relation to the day to day running of the club, brewers, banks and other suppliers are happy to deal with the officers.
4. Lower compliance costs.
The disadvantages of an unincorporated club are:
1. The club does not have limited liability, the officers and sometimes the members of the club may be held liable for the debts of the club and for the performance of the club’s contracts and other obligations – see section on the liability of members, officers and trustees.
2. It is not a body corporate and does not have a separate legal existence from its individual members, accordingly it can neither sue nor be
sued other than through its officers and members.
3. It cannot hold land and investments other than in the name of officers or trustees.
4. No statutory liquidation procedures exist and an unincorporated club cannot be voluntarily wound up under the Insolvency Act 1986.
5. The club cannot make formal contracts, any contract which has been entered into in the club’s name could be null and void.
203. UNINCORPORATED ASSOCIATIONS
– LIABILITY OF MEMBERS, OFFICERS AND TRUSTEES
An unincorporated members’ club cannot sue nor be sued, or hold property in its own name. Accordingly, when an outsider is trying to sue an unincorporated association an important question is, who is actually liable? It must be pointed out that instances of members and officers becoming liable for debts incurred by an unincorporated club are rare, this being due either to the fact that third parties are reluctant to sue individual members and officers, or are unsure of the legal outcome of their actions. Where action is brought it is usually against the chairman and secretary in the first instance, the action can be extremely distressing for the club officers involved.
This is a confusing area of the law and because of the lack of case law it is difficult to be definitive on the outcome of any action brought. The distress felt by members and officers is often compounded by this uncertainty and attempts to determine what their actual liability is. Club members tend to have two conflicting views of the position, either they believe they are not liable for any debt, or that they have unlimited liability. As a general rule a member’s liability is 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, if a member or officer is found liable for a debt his liability is usually unlimited.
Value Added Tax – Anything required to be done for VAT purposes is the joint and several liability of first, every member holding office as president, chairman, treasurer, secretary or any similar officer or in default, secondly, every member holding office as a member of a committee, and in default, thirdly, every member – VAT (General Regulations 1985, no 886, reg 10).
PAYE and National Insurance – The employer will be liable for payment of national insurance contributions and, if he pays the wages or salary, for income tax under PAYE. The employer will often be the persons who actually engage the employee, for example, the committee, or an officer responsible for employees although the employer may be all the members. PAYE should be operated on all wages paid to staff and officers including cash payment to players for playing and winning a game.
Corporation Tax – The treasurer of an association is responsible for doing all the acts which are necessary in relation to the corporation tax liability of an association. If an association does not pay their tax, the Revenue can recover the outstanding sum from the treasurer but he is entitled to retain association funds in his hands to satisfy the tax and to be indemnified by the association.
Employment of Staff
A club should determine which of the members is the actual employer because considerable duties and liabilities attach to that position. Any member who is about to become involved in the employment of staff should make sure he has the right of indemnity from other members and the assets of the club. In view of the potential liabilities which can arise, corporate status should be considered before significant numbers of staff are taken on.
In addition to the provisions of employment law, PAYE and National Insurance the employer has other duties in relation to the health, safety and welfare of the employees. Failure to make provision for an employee’s safety will not only result in a potential action for damages by the employee but it is also a criminal offence.
Where it is sought to sue a club in contract, the action must be brought against the individuals who entered into or authorised the contract. Any officer or member of committee may be sued who gave or authorised an order for goods or services, because although he acted as agent for the club, the club is not a legal entity and is unable to act as a principal or contracting party.
A member’s liability is usually limited to the amount of his subscription, unless it can be shown that the members authorised or ratified the contract, for example, the rules of the club may specifically provide that goods are to be ordered on credit in which case each member may be personally liable. Members will also be liable if they subsequently ratify transactions which have been entered into on their behalf without authority.
Contracts, undertakings, leases and agreements containing such words as ‘joint and several’ should not be signed. Such words would make each person accepting the obligation personally liable for the payment and performance of the contract during its whole period. In the event of the failure of the club the liability would fall on each individual accepting the obligation putting his personal assets at risk.
Property – Trustees are normally the proper defendant in relation to the clubs’ premises. Trustees of an unincorporated club do not have the same powers, duties or obligations as the trustee of a charity. Trustees of an unincorporated club are usually empowered to invest the clubs’ funds and in them is also vested the property and assets of the club in trust for the members. For any liability incurred in the course of their duties the trustees have a lien on the property but unless the rules provide they are not entitled to an indemnity from the club’s members. An individual member is not under any legal or equitable obligation to indemnify the trustees.
Individual members or a group of members may become liable for the loss arising from the state of the club’s premises if the court finds they were under a separate duty of care to outsiders. For example it was held that the committee of a football club were held personally liable when a stand collapsed and injured a spectator. An individual member with specific responsibilities may also be held liable to an outsider if he was negligent in the performance of his duties.
Libel and Slander – An unincorporated members’ club cannot be sued, and redress has to be sought individually and personally against the officer, member or employee concerned. The members will only be liable for a defamatory statement if they have expressly or implicitly authorised its publication.
Expulsion of Members – A common area of conflict for members’ clubs concerns the wrongful termination of membership or expulsion of a member. An injunction for reinstatement and action for damages or defamation will usually be made against the committee. In rare cases individual members have become liable through a class or representative action.
On Winding Up
Surplus Assets – Where after paying all debts there are surplus assets the rules of the club usually direct that the surplus is paid equally to members.
Deficits – No statutory liquidation procedures exist and an unincorporated club cannot be voluntarily wound up under the Insolvency Act 1986. As the club is not a separate legal entity it cannot become insolvent and as the person liable for debts incurred varies according to the action brought, it is difficult to come to an organised voluntary arrangement with creditors. It appears that the best scenario is that the club’s assets are used to pay debts as far as possible and the club is allowed to quietly fade out of existence with the outstanding creditors not bringing legal action against officers and members. Brewers and other trade suppliers normally accept the business risk of dealing with members clubs and do not take action against individuals. Where creditors do pursue it becomes a free for all. Those who pressure the most receive some payment and in practice the normal rules of preference are ignored. If a club is solvent but foresees problems in the future it is advisable to incorporate now. When and if problems do arise the incorporated club can then take advantage of the voluntary and compulsory Insolvency Act 1986 provisions for liquidating a company.
Two related themes recur when the liability of members, officers and trustees are considered, firstly the constitution of the club and secondly insurance. The standard of drafting of rules for unincorporated clubs is variable and frequently poor. To save legal fees rules are often cobbled together by members without full knowledge of all the legal ramifications, occasionally a club will have no written rules. In consideration of the law in relation to third part liability a club should ensure it has rules to cover such issues as indemnity, powers of the committee as employer, rules on the expulsion and termination of membership. It should not have a clause accepting liability for the members for goods ordered on credit. The rules of a club is a contract between the members, if there is not a clause on how the rules may be changed a new constitution or rulebook may be unenforceable against members who voted against it.
Where possible a club should insure against the risks faced by officers, members and trustees. Third party and employers’ liability insurance may be compulsory, but as the insurance policy will be issued to the committee or individual officers it is important to ensure that any member incurring liability to an outsider can claim on the policy, it should contain a member to member indemnity. It is also necessary to ensure that the policy contains a special provision that all members of the public, unfortunately many policies do not have such a clause and claims made by a member against other members of the club are excluded.
In the long term the most effective and cheapest form of additional insurance may be the incorporation of the club as a company limited by guarantee or as an industrial and provident society. The club would then become a body corporate with the ability to sue and be sued in its own name.
This is a confusing area of the law and should an issue arise a club needs to obtain specific advise from its professional legal advisors.
Searchlight – Wednesday 8th January 2014
BNP funds not safe from Griffin bankruptcy
by Sonia Gable
Nick Griffin has rushed to reassure British National Party members that the party’s funds are not affected by his bankruptcy and that it will not stop him standing again for the European Parliament in May. But as usual he is not being entirely truthful.
While it is true that legislation passed under the last Labour Government removed the bar on bankrupts standing for elected office, the party may be hard-pressed to mount what its leader promised would be “the most effective campaign ever yet launched by the British National Party”. Despite Griffin’s declaration that BNP funds are “completely unaffected” by the order, provisions in the party constitution would seem to give the bankruptcy trustee recourse to party assets.
Griffin was declared bankrupt on 2 January 2014 in the Welshpool County Court, owing nearly £120,000, as a result of an action brought by Gilbert Davies & Partners, the solicitors who acted for Griffin and the BNP when the Commission for Equality and Human Rights (CEHR) took action in 2009 over racial discrimination in the party constitution. At the time party membership was only open to white people..
The long drawn out proceedings were one of many issues that prompted accusations of poor decision-making and financial mismanagement against Griffin, contributing significantly to the party’s internal disputes and mass exodus of activists and officers.
Griffin habitually falls out with his legal advisers and representatives, and he and Gilbert Davies, who advertise themselves as conveyancing specialists, soon parted company. Whether it was because of his unreasonable demands or because he hoped that by sacking them he would not have to pay their fees is unclear. Griffin claims that he has “good grounds for multiple claims against Gilbert Davies & Partners for professional negligence” and that he is appealing against the original judgement that made him liable for outstanding fees.
In an attempt to distance the party from liability, the BNP describes Gilbert Davies merely as having represented Griffin. In fact the CEHR proceedings were brought against Griffin, Tanya Jane Lumby and Simon Darby “as officers of and on behalf of the members of the BNP”, as the relevant legal documents show. The BNP is constituted as an unincorporated association, which makes it difficult to pursue legal action against the party as such. But clearly Griffin engaged Gilbert Davies in his capacity of party chairman. At the time, Lumby was the BNP’s nominating officer and Darby its treasurer.
Strangely the text of the BNP constitution has been removed from the party’s website. However we have a copy of the document published on 15 July 2011 in which paragraph 6.22 states that the chairman is entitled to be indemnified out of party funds against all costs incurred by him “in the execution of or arising out of or in connection with his or her duties or the exercise of his or her powers”. Defending action by the CEHR over the BNP’s constitution is quite clearly a matter arising from his chairmanship.
When a person is made bankrupt, he has to declare all his assets to the person appointed as his bankruptcy trustee, who then has to sell or realise those assets for the benefit of the creditors. A right to recover costs is an asset. Griffin must declare it and the trustee has a duty to pursue the BNP for the money to which Griffin is entitled. If the BNP fails to cooperate, a court would have the right to appoint a receiver of the BNP’s assets or to wind the party up.
That right may be Griffin’s only asset. His house appears to be in the name of his wife Jacqueline, though a title deed for a nearby house at which he and Jacqueline appear to have been on the electoral register at some point show the owners as Jennifer Susan Burgoine and John David Burgoine, probably relatives or close friends of Mr and Mrs Griffin.
Griffin might have to enter into an Income Payments Agreement to make monthly payments out of his €95,000 (£79,500) MEP’s salary, although that income will end when inevitably he fails to get re-elected. His chances of retaining his seat in the European Parliament were already nearly non-existent before his bankruptcy and the declaration by Paul Golding, leader of the rival far-right Britain First party, that he would oppose Griffin in the North West region in the election.
This is the second time Griffin has been made bankrupt. Ludicrously he has declared that the experience has made him better able to advise constituents with financial difficulties and he will be producing “an advice booklet on dealing with debt”. How come he didn’t learn anything the first time?
It is understood that Griffin and/or the BNP have other outstanding legal and employment tribunal debts. The party’s 2012 accounts included a provision for unpaid legal expenses of £112,000 but it is not known what was included and what Griffin told the auditors about the likelihood of payment being enforced. The BNP has been kept going financially by a few large legacies, but awaits a High Court decision regarding a large sum left by someone who was not a permissible donor under electoral law.
Searchlight has investigated the BNP’s financial irregularities and difficulties for many years. We wrote a report for the House of Commons in December 2007 and helped produce a BBC radio File on 4 documentary on the BNP’s finances broadcast in February 2008. We have exposed the BNP’s fundraising for equipment and costs that have never been properly accounted for, and the incompetence of its short-lived national treasurers – six held the office from June 2008 to October 2010. We have extensively analysed the BNP’s accounts and revealed the true state of the party. We will continue to shine a light into the fascist party’s murky depths.
New Statesman – Monday 10th February 2014
What lies behind the spectacular
collapse of the British far-right?
In the form of UKIP, the toxic extreme right has been
sidelined by a more competent radical right force.
by Matthew Goodwin
Less than four months from now, voters across Europe will head to the polls to choose their representatives in the European Parliament. Amidst the financial crisis and falling public trust in political institutions, there is an expectation in Brussels, Paris and Berlin that the elections will deliver record success for parties that subscribe to right-wing extremist or Eurosceptic beliefs, and which are often crudely lumped together under the far-right umbrella. Much of this concern has been driven by the latest polls, which suggest that the "usual suspects" will continue their march from the margins to the mainstream.
In France, Marine Le Pen’s Front National looks on course to treble its level of support in 2009, possibly finishing first with over 20 per cent of the vote. In the Netherlands, Geert Wilders’ radical right Party for Freedom may also finish in the top spot, while in Austria the Freedom Party will also take over 20 per cent. Yet Greece and Hungary elicit most concern. In the latter, support for the anti-Roma and anti-Semitic Jobbik is holding steady at around 14 per cent, while Golden Dawn is likely to attract at least 9 per cent, introducing the real prospect of neo-Nazi MEPs sitting in Brussels. Even if the neo-Nazi party is forcibly disbanded, they have pledged to form a new party in time for the elections (the imaginatively titled "National Dawn").
If the polls are correct, the results will inevitably dominate headlines and fuel anxiety among progressives over the enduring appeal of exclusionary campaigns in Europe. But it is not quite as worrying as the media would have us believe. Behind the pictures of Le Pen and Wilders are countries in southern Europe, which, since the collapse of Lehman Brothers, have grappled with the conditions that many predicted would usher in political armageddon: rampant deprivation; a generation of unemployed youth; harsh austerity; striking inequality; and only recently entrenched democratic traditions. Yet few journalists bother to ponder why, since the crisis, the far-right has retreated or simply failed to arrive in countries such as Italy, Portugal and Spain, or why it has flourished in Austria and the Netherlands, which have "enjoyed" some of the lowest unemployment rates in Europe. In this sense, the puzzle is not why some far-right populists have prospered amidst the crisis, but why Europe has not turned en masse to the political extremes.
This is especially true in Britain, where, despite the crisis, recession and austerity, the far-right has completely collapsed. Cast your mind back five years to February 2009. Nick Griffin and the BNP were still in the afterglow of winning a seat on the Greater London Assembly. They had dozens of councillors and a grassroots membership on its way to over 14,000. And with a parliamentary expenses scandal about to explode, they would go on to poll over 6 per cent at the European elections and capture two seats. Shortly afterwards, a small protest in Luton would spiral into the English Defence League (EDL), which for a brief moment looked set to mobilise a street army of young, disillusioned and angry working class Britons.
But since then the far-right has haemorrhaged support. The EDL spectacularly collapsed after their leader resigned and was then imprisoned. Meanwhile, the long-awaited crisis that Griffin promised would bring his followers victory, has brought them misery. Such is the disarray that their MEP Andrew Brons has resigned the BNP whip and launched a new, anti-Griffin party. Thousands of members have walked away, leaving Griffin not only bankrupt but appearing as a lonely and increasingly comical figure whose only route into the headlines today is to express solidarity with neo-Nazis in Greece. The BNP which has dominated Britain’s far-right for some thirty years is polling just 1 per cent, and so the prospect of saving its seats is nothing more than a distant dream. For the first time since 2001, Britain may well find its elected office "BNP free".
So why – despite the crisis - has the far-right collapsed? There are three schools of thought, which each point to a different ingredient. The first is that since 2009, British public demand for ideas associated with the far-right has withered. But even a cursory glance at the data undermines this view. If anything, British voters are now even more concerned about immigration, less trusting of the political class, and more receptive to populist appeals. Even as the crisis subsides, public concerns over immigration today are stronger than at any point since 2007. In fact, immigration now shares the top spot with the economy as the most important issue in the minds of voters, and by the time we get to May it may well occupy the top spot in its own right.
A second argument is that the British far-right simply failed to capitalise on the crisis, offering a toxic brand that was "beyond the pale' for most Britons. One of my favourite opinion polls of all time (run by YouGov) asked Britons to rank the most important markers of Britishness. The most popular answer was freedom of speech. But a close second was the country’s victory over Nazi ideology, which goes some way to explaining the power of the anti-fascist norm in Britain. Unlike, say, Marine Le Pen who grasps the necessity of detoxification, the extremist amateurism of the fascist BNP and the street thuggery of the EDL alienated voters who might otherwise be receptive to the radical right agenda. There was a window of opportunity where both groups could have connected with a disillusioned, working class and left behind generation of Britons, but instead they remained dominated by figures who the historian Richard Thurlow once described as "tinpot fuhrers and sawdust caesars".
While much of this rings true, it also complements a third argument; that since 2010 the toxic extreme right in British politics has been easily outflanked by a more competent radical right force, which not only targets the same cluster of concerns over immigration, Europe, the responsiveness of elites and perceived threats to national identity, but does so in the shadow of legitimacy. The rise of the UK Independence Party (UKIP) has presented the BNP with an insurmountable challenge. As Griffin's party has sought to frame Ukippers as "plastic nationalists" and "posh boys" who like the bankers, the reality (as we show in a new book <http://www.amazon.co.uk/Revolt-Right-Explaining-Extremism-Democracy/dp/0415661501/ref=tmm_pap_title_0> ) is that the more legitimate and sophisticated UKIP brand is connecting far more successfully with the same social groups who only offered the extreme right some localised and ephemeral success. UKIP is not a right-wing extremist party. Neither Farage nor his party advocate an ethnic conception of nationalism, the overthrow of liberal democracy or conspiratorial anti-Semitism (the three features that are commonly thought to define right-wing extremism). To put UKIP in the same camp as the BNP misunderstands its revolt.
But that is not to say that this revolt is not drawing support from the same sections of British society who have been left behind by the country’s economic transformation over recent decades, were then hit hardest by the financial crisis, and today feel completely adrift from an established political class that is increasingly focused on more secure, educated and professional middle-class voters who not only share a markedly different outlook but also determine the outcome of elections. This is one (but by no means the only) reason why the rise of UKIP carries as many important questions for the left as it does the right. Under any other circumstances, these disadvantaged, left behind voters should be expected to be rallying behind Labour. So while this May we should welcome the demise of the traditional extreme right in Britain, we will again be given good reason to ask why a growing number of Britons are turning their backs on mainstream political life.
*Matthew Goodwin is Associate Professor in Political Science at the University of Nottingham and Associate Fellow at Chatham House. He is co-author, with Robert Ford, of Revolt on the Right: Explaining Support for the Radical Right in Britain <http://www.amazon.co.uk/Revolt-Right-Explaining-Extremism-Democracy/dp/0415661501/ref=tmm_pap_title_0> , which is published in March. Readers of the New Statesman can receive 20% off pre-orders here <http://www.routledge.com/books/details/9780415661508/?utm_source=adestra&utm_medium=email&utm_campaign=SBU1_LAN_3RF_2TW_1POL_00000_Revolt> , using the code RTR14