Judgment-Proofing Voluntary Sector Organisations from Liability in Tort

AuthorPhillip Morgan
PositionSenior Lecturer, York Law School, University of York
Judgment-Proof‌ing Voluntary
Sector Organisations from Liability
in Tort
Phillip Morgan*
Voluntary sector organisations (VSOs) may use ordinary principles of law to protect
themselves from tort liabilities by rendering themselves judgment-proof. ere are two
viable judgment-proof‌ing systems available to VSOs: (1) charitable purpose trusts,
and (2) group structures. Whilst these systems are not fool-proof, they of‌fer signif‌icant
protection from tort liabilities. However, judgment-proof‌ing may come at a high price
to the voluntary sector.
* Senior Lecturer in Law at the University of York. Elements of this
paper have been presented at workshops and seminars at University
College London, and the Universities of Hong Kong, York, Leicester,
and Cambridge. e author would like to thank participants for their
comments. e author would also like to thank Dr. Kim Bouwer,
Professor Charles Mitchell, Professor Paul Mitchell, Professor Richard
Nolan, Professor Debra Morris, and Professor Paula Giliker for useful
comments and discussions in relation to this topic. All errors remain my
(2020) 6 CJCCL
I. I
II. T V S
A. What is the Voluntary Sector?
B. Role of the Sector
C. Scale of the Sector
D. VSO Organisational Form
III. T L   V S
IV. W  J-P
V. W J-P
VI. W J-P M  A  VSO
VII. C P T
A. Challenges to Charitable Trust Judgment-Proof‌ing
VIII. G S J-P
A. Challenges to Group Structure Judgment-Proof‌ing
IX. V S-S C T J-P
A. Voluntary Sector Reputation
B. Public Relations Examples
C. Reduced Volunteering?
X. C
I. Introduction
Judgment-proof‌ing is the careful structuring of organisations so as
to render them men of straw for the purposes of litigation. Whilst
typically found in a private sector context, judgment-proof‌ing may also
be used by voluntary sector organisations (“VSO”s). Such structures,
whilst not fool-proof, provide signif‌icant protection to VSOs from tort
litigation. However, judgment-proof‌ing may come at signif‌icant cost to
the voluntary sector.
VSOs may use ordinary principles of law to protect themselves from
tort liabilities by rendering themselves judgment-proof. is structuring
provides for a form of organisational protection which achieves a similar
function to an immunity or damages cap. e existing literature on
judgment-proof‌ing is concerned with for-prof‌its and not the voluntary
sector. is article is original in considering judgment-proof‌ing from
Morgan, Judgment-Proof‌ing Voluntary Sector Organisations
the perspective of the voluntary sector. Judgment-proof‌ing has also not
yet been considered from an English law perspective, and this article
addresses this gap.
Judgment-proof‌ing may provide signif‌icant asset protection for
VSOs, and discourage tort claims against VSOs. It allows a VSO to
externalise its accident costs, resulting in them falling on victims or
individual volunteers. Whilst some scholars have doubted that judgment-
proof‌ing is viable, this article demonstrates that it is used in some high-risk
industries. is article demonstrates that there are two viable judgment-
proof‌ing systems available to VSOs: charitable purpose trusts and group
structures. e latter uses incorporation and a symbiotic relationship
between a risk generating entity and an asset holding entity designed to
insulate the second from risk. ere is a risk that both systems may be
challenged by courts and legislatures, but doctrinally they should of‌fer
signif‌icant protection.
Whilst judgment-proof‌ing may provide signif‌icant protection to
VSOs from tort liabilities, particular problems may arise with it in the
voluntary sector context. Judgment-proof‌ing may come at a cost for a
VSO or the broader voluntary sector in terms of reputation, and reduced
volunteering levels. A lower sector reputation may mean that it is more
dif‌f‌icult for the sector to carry out many of its important roles. Judgment-
proof‌ing may also encourage greater state regulation, undermining the
sector’s independence. Legislatures and courts may also intervene in
some cases. VSO judgment-proof‌ing, whilst possible, may come at a high
price for the sector.
Whilst this article focuses on the English common law, it makes
reference to and draws upon material from other common law
jurisdictions, and its conclusions apply throughout the common law

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