SCA: the lawsuit

[cellio]

As anybody in the SCA already knows, but for the rest of you, the SCA just settled a $7M lawsuit out of court for $1.3M. Corporate liability insurance has thus far refused to cover most of this (so there's another lawsuit over that), and meanwhile the money needs to be paid. The corporation has already spent a lot of money defending this suit so they don't have it; thus they are assessing an 18% levy on all kingdoms, local groups, and major wars (which have their own bank accounts) in North America.

I wasn't sure whether I was going to post about this (the discussion is happening in lots of places already), but a few people have asked what this relatively-long-time-SCAdian thinks, so...

I can't help feeling a bit of Cassandrafreude over this. A few people, most notably Duke Cariadoc (a real-world economist who knows a thing or two about organizational structure and law, and from whom I take a lot of inspiration), have been arguing against the centralized corporation for decades, for reasons including the giant target it paints on the corporate coffers. People called us paranoid. (Granted, I oppose the current centralization for many other reasons too.) Since the corporation asserted its ownership over all local-group funds about 20-25 years ago, I have been expecting something like this to happen. (Before then, a group could maintain its own bank account, absent the benefits of being part of a non-profit, if it wanted to. Some did.)

I have lots of questions about the current situation -- about what options were considered and why others were rejected, and about the timing. This post is not about that.

I have met the president of the SCA and several of its directors. I have had polite, respectful, and challenging conversations with them about various corporate doings. I have found them to be decent people, not at all like the situation in 1994. They are in a difficult position and, frankly, out of their league. This is not about the individual people who are in charge of the corporation. I think the problems are institutional and uncorrectable within the current structure and common mindset of the SCA.

So long as that giant target exists on the (new-reduced) coffers, and especially now that the SCA has settled once and thus demonstrated its willingness to anyone who wants to sue regardless of merit, there will be no end to the problem. Lawsuits are pressed when the potential payoff exceeds the expected costs of prosecution; big bank accounts mean higher potential payoffs. If the target had instead been "SCA Kingdom of the East, Inc" with a tenth the assets of SCA Inc, the settlement probably wouldn't have been $1.3M.

And not only are we a target no matter what we do (the precautions put in place after the current case would not have prevented that case), but every case and every precaution does some incremental harm to the society. People get deterred from volunteering because of either the risks or the new regulations, and meanwhile the level of discourse in these discussions is often rather far below what you would expect from a society founded on chivalric ideals. It's ugly and tiring, and I suspect we lose as many people to the arguments as we do to the underlying situations.

A single corporation holding all those assets does harm to the society. There's just no way around that. The directors of any corporation have a fiduciary responsibility to protect those assets; they do not have a duty to protect the culture that makes the society what it is. A corporation must protect its assets, and fears around that will always trump other concerns. It's not reasonable to expect otherwise.

It's funny: the most consistent argument I've heard for why we need a central corporation is insurance coverage. We're currently suing our insurance provider for refusing to pay a claim.

People have been advocating decentralization since the very beginning -- in fact, the society came first and the corporation only some years later -- but the idea has never taken hold. People like central authority, uniformity across the society, and -- while they grumble about the rent -- a central office that you can call when your newsletter didn't arrive or you need proof of membership for Crown Tourney. Demonstrations from other organizations that a decentralized structure can work are met with indifference or dismissal -- "we're different". Questions about whether the current structure is worth the cost, financial and otherwise, are often met with emotional, not logical, responses, preventing conversational progress. People do not see the possibilities that loosely-associated independent organizations could bring -- that An Tir could have same-sex royalty and AEthelmearc could adopt new fencing forms and Atlantia could reduce the fighting age to 14 and Caid could choose its royalty by vote and... (I'm making up some of these examples, ok?)

As I said before, I believe the president and directors are acting with the best of intentions. But even the best-intentioned people can end up perpetuating something that ought to be re-examined. If the current situation causes the society to re-examine its structure, to allow kingdoms to spin off and make the rules and cultural changes they find appropriate, with the consequent distributed liability, then $1.3M will have been a small price to pay for that change.

But that won't happen, just as it didn't happen in 1994. Too many people in the SCA are too eager to preserve the current structure unexamined, to avoid the responsibility that would come with independence, and to call anyone who says differently a bad person. The biggest fight the SCA has been through during my time was the fiasco that started with the mandatory-membership decree, and that did not rally people for a change in the end. This will not either. We rush to gather the payment for the disaster that has just occurred, but we are unwilling to ask what we should do to reduce the chances of a repeat occurrence. We think new rules will save us and we ignore the sights trained on the bank accounts. People have already compared the current and forthcoming fund-raising to the outpouring of support in the face of hurricanes and floods; I instead compare it to rebuilding on a ten-year flood plain.

I have been drifting away from the SCA over the last couple decades, and this is not my fight. Not this time. Fortunately for me, there are really only three things about the SCA that really matter to me, and the demise of the corporation (were it to happen) would not harm any of them. They are:

1. All the interactions and shared projects with friends across the world-wide society; we'll keep making music and researching clothing and brewing beer and cooking feasts and so on regardless.

2. Local activities. The absence of a tax-exempt corporation with an insurance policy (now shown to be of dubious reliability) won't stop us from gathering for tourneys and feasts and academies. It may affect where and how we do those things, but people who want to have fun together will keep having fun together. Other small groups do things at least as dangerous as we do; surely the liability problem isn't completely intractable.

3. Pennsic. Pennsic is nominally an SCA event, but it is unlike all others I have attended in structure. It is also the largest source of annual revenue for Cooper's Lake Campground, and I have no doubt that were SCA Inc. to vanish, the Coopers would make official what has been true in practice for years, that Pennsic is a Cooper's Lake event.

So if SCA Inc. were to go away, then after some local fund-raising efforts to replace seized property like crowns and loaner armor and kitchen supplies, I think the only impact I would notice would be the refreshing freedom to return to a society that's about the re-creation and the people and the fun. I don't think I'd mind that outcome at all.

Comments

[browngirl.livejournal.com]

Well, wow. *reads and listens*

[indigodove.livejournal.com]

Thanks for both your thoughts and a brief explanation of what's going on. I'd wondered about both.

Sheesh is about all else I can say.

[grouchyoldcoot.livejournal.com]

My fantasy is that AEthelmearc or some group of Kingdoms says they'll pay only if the Board agrees to choose its successors by election. It won't happen, but it's my fantasy. I believe an elected board would have a lot more ability to adapt to our changing situation.

[osewalrus.livejournal.com]

+10

This says it all so well. Mind if I link to it?

[metahacker.livejournal.com]

Well said. The whole situation has, and has for many years now, made me angry enough that it interferes with my ability to go to SCA events.

[estela-dufrayse.livejournal.com]

reading through a friend's friends page...

This is exceptionally well written and voices the exact words that I have been thinking for years now. I expect that many people are seeing the writing on the wall and will be pulling back from the Society to only play with their smaller groups.
I can't see the Corporate entity changing unless it's forced to.

[dagonell.livejournal.com]

Thank you for so eloquently expressing everything I've been trying to say. Unfortunately, you're right. I don't believe the corporation will change either. Corporations exist to continue themselves. The March of Dimes was originally created to wipe out polio, which now only exists in test tubes, yet the March of Dimes lives on. The Tony Provine fiasco is another example of this principle hitting close to home.


To quote another individual on yet another thread of this:
<*snip*>
Repeat after me: "Corporations are like airbags". The purpose of the Corporation is to shield the individual volunteers and paid staff from being personally on the hook for damage to their personal lives.

Repeat after me: "People shoot at targets". If the East Kingdom were the corporation, there might not have been such a lawsuit at all - there is no reason to spend the lawyer-money up front if there is no chance for recovery of damages.

Repeat after me: "The SCA deserves it". They did not follow due standards of care, they did not govern themselves well, they did not manage their own situation properly. The SCA is lucky as hell that the filing parties took less than 20% of what they could have recovered.
<*snip*>

I think the only thing he forgot to add is that once your airbag has expended, you throw it out and get a new one. -- Dagonell

[hildakrista.livejournal.com]

I, for one, am extremely glad to have the Corporation in exisitance. The reason: they indemnify local and Kingdom Officers from personal lawsuits stemming from their SCA duties. The Seneschale of the Shire of Eisenthal was named in the Ben Schragger lawsuit along with him, and two other officers. I'm sure her life was turned upsidedown enough even with the indeminfication - can you imagine the ruinous consequenses to her entire life had she not had it? I put myself in that hypothetical place, and I shudder.

The sad state of the world is that lawsuits, both justified and not, are common. (Ask Brandubh sometime about how often the City just settles crap lawsuits just to avoid legal fees - your tax dollars at work) Lawsuits are maybe not common in the Aethelmearc region, but in Caid, I've heard the Kingdom Exchequer gets served more than once a year. With suits against him, personally. No one would volunteer for the job. If Aethelmearc were regional only, even if we indemnified officers, can you imagine what even one lawsuit like the Ben Schragger case could do? The legal systems are so unpredictable, and so expensive. AE has about 1900 members. Charging a reasonable AE membership fee might bring in maybe $60K a year. Even one lawsuit could either bankrupt the whole Kingdom, or devastate an innocent local officer that was just trying to make stuff go - the real reason we volunteer. And what about the western Kingdoms, where people are just more litigous in general?

Even if the indivdual Kingdoms or regional entities could absorb it, the amount and quality of people volunteering for offices would drop dramatically overall as they get disillusioned. (You know something about that, right?) I have a hard enough time getting people to volunteer for just local Offices. Can you imagine if their personal risk increased 100 or 1,000-fold? It's not an anreasonable concern.

I understand that you believe that having the Corporation is a target, and decentralizing would eliminate that target. I don't think that's the case. I think it would make smaller, more vulnerable targets. Because people are like that, and our legal system is like that. Maybe most of the smaller targets never get hit, but it's very likely that some would.

So my membership fee is now, for all intents and purposes, protection money...it sucks. But as a Seneschal that needs protection, and as an SCA member who wants protection for my friends, both known and not... I'm actually OK with that. Take my $40, and take my Barony's $1900, and let me play my game without my having to worry (much) about being sued.

Is my stance fear-based or caution-based? Frankly, I don't know, and it's an uncomfortable place to be. And I don't like it. But here I am.

[loreleiskye.livejournal.com]

thank you for giving many folks such as myself much to think about

[julia-spring.livejournal.com]

You mention there are other organization that are not centralized. Do you have examples? This is the first time I've heard of this idea, let alone an argument to support it. I'm interested to understand why it's not likely. Wouldn't it simply (difficultly?) only require support from the Board?

[forest-lady.livejournal.com]

An organization, if you can call it that, which has no corporate structure comparable to the SCA, is the world-wide jousting one. They do really dangerous things and they have a lot of fun, as far as I know, still no insurance, no presidents, no "local groups". I think a lot of re-enactors are like that also.