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TAS Duty of Care: Issues for consideration for conference convenors

TAS Managing Director, Francis Child, presents the key considerations for conference convenors

Introduction: As a volunteer on a conference organizing committee, you will be faced with a wide range of choices to make and issues to deal with.  This document aims to highlight some of the areas for your consideration and on which you may then choose to seek independent, professional advice.  Even though conference committees are invariably made up of volunteers motivated only by a desire to help, undertaking a conference gives rise to liability and obligations for the organisation – and can also lead to personal liability for those involved in its management.  Giving due consideration to the matters raised below may help you to avoid problems and assist in bringing about the best possible results for your conference.

What this Document Does and Doesn’t Do

This document:

  • lists some of the issues that you, as a conference convenor, may need to consider when putting your next conference together.
  • is not comprehensive and some circumstances may give rise to other issues that are not mentioned here.
  • is not legal advice. Its sole purpose is to prompt you to consider the issues. Its content is general in nature and you should not rely on this document but always obtain specialist advice from your legal adviser.

 Your Internal Arrangements

Are you an incorporated entity – association or company?  If so, you should be sure that you are entitled to conduct the event proposed and may need to check your constitution.

If you are a collection of individuals, you should consider forming a separate legal entity, such as an association or company.  If you are a collection of organisations wishing to co-host, you’ll need to consider how you wish to share financial risk and reward, liability and how decisions are to be made.  This is potentially complex and will need to be properly documented.

 Safeguarding Conference Funds

Conferences cost – and can generate – substantial sums of money.  These funds need protection and management.  You will need to consider:

  • Who will hold the funds? Sometimes the Association will hold the funds; other times the contracted event manager may do so.
  • Whose money is it? This will depend on a range of factors, including the nature of your contract with the event manager, and contracts with co-hosts (if any), sponsors and other participants.
  • If the money is held on your behalf by another party, it may be appropriate for the relevant bank account to be a trust account. The holder then becomes a trustee and special obligations apply in relation to the trust funds. Establishing a trust account requires an appropriate background agreement (between the trustee and beneficiary) and thought to be given about the rules applied to the deployment of the funds.
  • What are the banking arrangements? Are procedures in place for incoming funds to be banked promptly and securely – and for the funds to be kept securely in the meantime?
  • Generally if your funds are being held by another party, there should be agreed protocols (in a contract) for use and expenditure of the funds. One useful practical safeguard is to retain some control as a co-signatory on the account.
  • If you are holding the funds, are you satisfied that the funds are being dealt with as required in your contracts with any co-host, the event manager, sponsors and others? Are the funds secure in your possession or in your bank account? Again, having 2 signatories on the account is a safeguard worth considering.
  • If large quantities of cash are involved, cash insurance may be desirable.
  • Who is entitled to any interest earned on banked funds? Your contract with the PCO should make this clear.

 If You Are Engaging a PCO

If you are appointing a PCO, consider whether the they will provide the services as:

  • A consultant, by simply providing advice but not getting involved;
  • An agent, engaging the suppliers (venue, audio-visual, catering, talent etc) on your behalf with contracts and invoices in your organization/event name; or
  • A principal, engaging the suppliers in its own name and requiring you to reimburse the costs directly to the PCO.

Different PCOs approach this issue differently.  Very different legal and financial outcomes arise from each model.  Consider the model offered by the PCO.  You should be given a written contract that should deal with at least the following issues:

  • Who enters into (and is liable for) contracts with suppliers?
  • What is the budget for the event and what is the procedure for varying it if circumstances change?
  • What powers to direct the event manager (and powers of veto) do you retain?
  • What cancellation arrangements apply?
  • How are the funds managed and what are the banking arrangements? Many PCOs will want to control the funds, but that can mean a loss of control for you. Controlling the purse strings can be an important means of quality control and maintaining your bargaining power.
  • What happens to any surplus of revenue over costs?
  • How is GST paid and managed? If you are reimbursing supplier costs paid by the organiser, the organiser would be entitled to a tax credit for the GST paid, so you shouldn’t have to pay it too.
  • What fee is payable to the event manager?

Commissions

Ask the PCO whether it accepts commissions.  These are benefits offered by a supplier to the PCO for placing your business with that supplier.  They can take the form of “reverse payments” or other “in-kind” benefits such as complimentary services or discounted goods.

If such commissions are not disclosed to you, the PCO has a conflict of interest.  Supplier selection should ideally be on merit alone.  If you are being quoted a substantially lower fee than by other PCOs or managers, commissions may be involved and an enquiry should be made.  Insist that any commissions or inducements be disclosed in writing.  In some cases, undisclosed commissions can be a breach of the law.  You may wish to retain the right to contact suppliers and obtain quotes yourself.

Contracts

You should ensure that all contracts you enter into (whether directly or by your PCO as your agent) are appropriate.  This means you will need to be satisfied that the contracts do not expose you to unacceptable risks, financial or otherwise.  Remember, PCOs are experts in their field, but they are not lawyers and are not qualified to give legal advice.  If a contract is to be signed by you or on your behalf, you need to understand it and that means undertaking “due diligence”; ie reading it thoroughly and getting legal advice if necessary. There may be contracts with a wide range of suppliers – venue hire, exhibition design and build, IT services and website design, audio-visual services, catering, security and many other service providers.

Contract terms and conditions should be settled and agreed (and contracts signed) before the supplier commences work.  Allowing the supplier to begin working before the contract is agreed is a recipe for dispute and uncertainty – and you’ll lose bargaining power as well.

Some issues that should be considered in relation to all supplier contracts are:

  • Cost – what will the supply cost and what scope is there for variation of cost? Are there circumstances in which the supplier can increase the costs?
  • What is included for the fee? Is the fee all-inclusive or are there extras or costs that will be charged in addition to the agreed fee?
  • Cash-flow – when is the supplier to be paid? You should avoid paying too much in advance. Payment should be linked to the achievement of milestones wherever possible.
  • Description of the goods or services – should be as accurate as possible and where buying services the outcomes you want rather than the work should be described.
  • Cancellation – how is this managed? It is often overlooked entirely. A supplier may justifiably be entitled to charge some of its fee if the event is cancelled, but how much will be dependent upon the level of work already undertaken by the PCO, the costs they may have incurred on your behalf and the terms stated in the contract.
  • Equally, cancellation of the event needs to be considered from the perspective of the delegates and when preparing the terms and conditions of attendance.
  • Program change is a similar issue – unforeseen circumstances can prevent a speaker (or any supplier, for that matter) from turning up on the day. Your contract with delegates should reserve the right to make Program changes where necessary.
  • Intellectual property ownership – if the supplier is performing creative work, such as creating a website, ideally you should own the intellectual property, or at least obtain an exclusive license for the material as a compilation of inputs.
  • Trade Practices Act – you should not be required to purchase products from other suppliers (third line forcing) or to on-sell products to your delegates at agreed prices (resale price maintenance). There are many other possible risks outlined under that legislation.
  • Indemnities – Venue and other supplier contracts can contain harsh indemnity clauses. These clauses expose you to liability that can be much higher than your ordinary liability under the law. Liability under such clauses will, in many cases, not be covered by insurance.  As a general rule avoid agreeing to them wherever possible.
  • Contract signing – if you are dealing with a company then, if possible, ask for the contract to be signed by its Directors. If that is impracticable, the CEO or general manager is next best. You need to be sure that the person signing has authority to do so.

Insurance

You’ll need to have appropriate insurance for the risks inherent in your event.  You should at least consider:

  • public liability insurance;
  • product liability insurance;
  • professional indemnity insurance;
  • event insurance covering cancellation, loss of income etc; and
  • worker’s compensation insurance if you have employees.

The amount of cover you’ll need for each policy will depend on the risks covered.  Find an insurance broker and discuss this.  Err on the side of getting more cover, not less.  Also ensure that your suppliers (including any PCOs) have insurance appropriate (in both type and amount of cover) to the type of goods or services being supplied and ask for evidence that the insurance is in place.

Privacy

The Privacy Act 1988 now applies to the private sector (including associations).  These provisions are currently subject to an application threshold of $3 million annual turnover.  If your organisation has turnover of less, the National Privacy Principles do not currently apply unless you supply health services or “trade” in personal information.  However, there has been a proposal to remove that threshold and compliance with the National Privacy Principles is desirable for commercial reasons even if not strictly required under the law.

The privacy rules in the National Privacy Principles regulate the management of personal information – that is information about individuals (this includes name and contact details), and would include the information on delegate lists.

Intellectual property

The main types of intellectual property relevant to a conference are trademarks (such as the name or logo of the conference) and copyright (such as in the conference website, promotional material, theming/design and presenter materials).

As a general rule:

  • Where possible, your organisation should own the intellectual property it uses. Where intellectual property is created by an independent contractor or supplier, this requires a written, signed transfer. Some suppliers will not transfer ownership to you but will only license you to use it.  You’ll need to be sure that any such license gives your organisation the use rights that it needs now and in the future.
  • Obtain promises from suppliers that the work they do for you will not infringe the intellectual property of any third party.
  • Undertake searches and obtain advice to ensure that your proposed trademarks do not infringe an existing trade mark or name.
  • Care is needed concerning the intellectual property inherent in speaker materials. You may not have automatic rights to replicate or re-publish speaker materials without consent of the speaker. Doing so without consent can be copyright infringement.  These issues should be the subject of a proper written agreement with the speaker.

Promotional Material

All promotional material created for the event – whether provided by employees of the association or by contracted consultants – needs to be vetted for possible misleading or deceptive content.  The whole of the material must be viewed in context to determine whether members of the audience may be misled.  It is necessary to consider the less sophisticated members of the audience when assessing this.  Be straight-forward with your promotional material and, amongst other things, ensure that you quote the total price payable by delegates inclusive of GST.  Also be careful to get written permission if your promotional material incorporates the trademarks or logos of other businesses.  To do so without consent can be an infringement of those trademarks.

Get advice early!

There may be many other issues not mentioned here.  Some issues may be difficult to identify, let alone manage, without taking professional advice from a qualified person.  Getting advice early can save you a lot of cost, liability and anxiety later.