ECF may join with English Bridge Union in Judicial Review

[David Sedgwick]

In terms of communication with and approval by Council, how is committing to expenditure like this different from the FIDE lawsuit episode?

(Have asked the question in the other place, but more likely to get a more productive debate here.)

I'm ashamed to admit that I replied in the other place before seeing your post here.

I'll quote that reply. One of my points is the same as that made by Roger here.

There are some important differences:

1. The FIDE lawsuit was kept secret for many months after the then Board "forgot" to inform Council at two successive meetings. The current decision has been communicated to all members and has been announced here.

2. We have been told that costs are limited. That was also true in the case of the FIDE lawsuit.

3. In addition to being kept in the dark, Council's objections to the FIDE lawsuit were twofold:

a) The issue was not sufficiently important to justify taking legal action;
b) The action would damage our relationship with FIDE and might lead to some form of victimisation (which indeed subsequently occurred).

I can't see that b) is likely to arise here. Whether a) applies again is a matter of opinion, of course.

[Carl Hibbard]

I'm ashamed to admit that I replied in the other place before seeing your post here.

Boo

[JustinHorton]

Do we know at what figure the costs are capped?

[Angus French]

There are some important differences:

1. The FIDE lawsuit was kept for many months after the then Board "forgot" to inform Council at two successive meetings. The current decision has been communicated to all members and has been announced here.

2. We have been told that costs are limited. That was also true in the case of the FIDE lawsuit.

3. In addition to being kept in the dark, Council's objections to the FIDE lawsuit were twofold:

a) The issue was not sufficiently important to justify taking legal action;
b) The action would damage our relationship with FIDE and might lead to some form of victimisation (which indeed subsequently occurred).

I can't see that b) is likely to arise here. Whether a) applies again is a matter of opinion, of course.

Re "Whether a) applies again is a matter of opinion, of course": I think, really, more information is needed to enable an opinion to be formed. For example:
1. (As Justin asks and as others have also asked) At what figure are the costs capped? Also, how are the costs capped?
2. What benefits would accrue if the action is successful?
3. What are the chances of success? It would be useful to see the Board's assessment of this. I assume they've considered the text of the decision which granted leave for the judicial review (thanks to Jonathan Rogers for alerting us to this) - but can this be confirmed?

Concerning David's point 3(b) - damage to our relationship with FIDE: there is, perhaps, a parallel concern: How will the action affect the ECF's relationship with the Government and the DCMS? I note that the DCMS backs the defendant, Sport England... Do members of the All Party Parliamentary Group on Chess support the action (presumably they've been consulted)?

[Kevin Thurlow]

"The 1937 Act was discussed as being in the terms of a national emergency to encourage physical fitness. Presumably Bletchley Park was too secret or too far in the future to note that there was then also a need for Chess players, Bridge players and crossword solvers as well."

BP was active then but secret until the 70s. I assume Baldwin knew what it was doing, but probably not the staffing details!

[Jonathan Rogers]

There are some important differences:

1. The FIDE lawsuit was kept for many months after the then Board "forgot" to inform Council at two successive meetings. The current decision has been communicated to all members and has been announced here.

2. We have been told that costs are limited. That was also true in the case of the FIDE lawsuit.

3. In addition to being kept in the dark, Council's objections to the FIDE lawsuit were twofold:

a) The issue was not sufficiently important to justify taking legal action;
b) The action would damage our relationship with FIDE and might lead to some form of victimisation (which indeed subsequently occurred).

I can't see that b) is likely to arise here. Whether a) applies again is a matter of opinion, of course.

Re "Whether a) applies again is a matter of opinion, of course": I think, really, more information is needed to enable an opinion to be formed. For example:
1. (As Justin asks and as others have also asked) At what figure are the costs capped? Also, how are the costs capped?
2. What benefits would accrue if the action is successful?
3. What are the chances of success? It would be useful to see the Board's assessment of this. I assume they've considered the text of the decision which granted leave for the judicial review (thanks to Jonathan Rogers for alerting us to this) - but can this be confirmed?

....

My very sketchy understanding is that we have much less to gain than the EBU, whose income and liability to tax is of a different league to ours. So it is fair to ask why we should invest much in an action which is likely to fail (and it might be added, that if EBU were to win in the High Court, that would almost be the worst outcome, since I think they would lose on appeal and incur much greater costs still).

Personally, I would be inclined to suspect that EBU have invited our involvement largely to defray some of their legal bill in the event of an expected defeat.

[Roger de Coverly]

My very sketchy understanding is that we have much less to gain than the EBU, whose income and liability to tax is of a different league to ours.

As far as VAT is concerned, that's almost a lucky historic accident. When VAT was introduced, it became established that if you ran an event charging entry fees, that these fees were liable to VAT. As everyone is aware, most chess events then as now were run by small scale independent organisations whose turnover wasn't enough to take them above the VAT threshold. The EBU on the other hand is much more strongly centralised, so that an event of comparable size to a Chess Congress incurs VAT by virtue of being run by the EBU.

It would not be difficult, if challenged, to demonstrate that chess events as currently constituted were independent of the ECF and therefore there was no case for accounting consolidation. This could change if the ECF moved to a position where local clubs and events were only allowed to exist and participate in grading etc. if licensed by the ECF.

[Brian Towers]

This could change if the ECF moved to a position where local clubs and events were only allowed to exist and participate in grading etc. if licensed by the ECF.

Come on, Roger! How likely is it that that "tail wagging the dog" situation would arise?

[Roger de Coverly]

Come on, Roger! How likely is it that that "tail wagging the dog" situation would arise?

Those with a liking for long words are already circling.

http://www.englishchess.org.uk/Forum/vi ... ?f=4&t=375
referencing
https://www.gov.uk/government/consultat ... nsultation

[David Sedgwick]

It would not be difficult, if challenged, to demonstrate that chess events as currently constituted were independent of the ECF and therefore there was no case for accounting consolidation. This could change if the ECF moved to a position where local clubs and events were only allowed to exist and participate in grading etc. if licensed by the ECF.

You are correct that the proportion of English bridge events run by the EBU is rather higher than the proportion of English chess events run by the ECF.

However, to the best of my knowledge, local Bridge congresses aren't liable to VAT simply because they require an EBU licence. That doesn't make them EBU events.

[Nick Grey]

Looks like a big gamble & question is what is there to win? EBU pockets likely to be bigger.
Exemptions from VAT for hiring premises?
Taxation on prizes?

[Roger de Coverly]

Looks like a big gamble & question is what is there to win?

The direct gain for the ECF itself would be that membership fees and entry fees to the British Championship Congress wouldn't have VAT charged on them. This makes them up to 20% cheaper.

Most local chess bodies aren't registered for VAT in the first place, so there's no gain.

Status as a sport might also make various grants available, but also attracts the potential interest of anti-doping authorities.

[Ian Thompson]

Taxation on prizes?

No. That's determined by the status of the person winning the prize. Of course, most players would be delighted if HMRC did regard their prize money as taxable income.

[Paolo Casaschi]

Looks like a big gamble & question is what is there to win? EBU pockets likely to be bigger.
Exemptions from VAT for hiring premises?
Taxation on prizes?

The sport England annual report shows more than £300,000,000 a year of money being distributed among recognized sport organizations and approved projects.

Unless I miss something, at the moment precisely £0 of those £300,000,000 is allocated to chess.

Being recognized as sport might open the door for the ECF and other chess organizations and projects to argue for public financing. Getting access to public financing might also make it easier to attract private corporate sponsors.

Back to your question: being recognized as sport gives you nothing just by itself, but might open the door to new financing opportunities. The VAT and tax benefit that you mention looks marginal to me.

The EBU seems at the moment in a better position to take advantage from a favorable court ruling not because of "bigger pockets" but because of a more proactive initiative going after public funding as opposed to moaning for the lack of it. You might expect the same initiative after a court win when it's time to argue for a share of the £300,000,000.

As far as the anti-doping controls that might come with the sport recognition, I can relate the situation in Italy where such controls are currently in place; they do not make any sense as everyone here agree, but they have not been anything more than a minor nuisance to the chess activity in Italy; ultimately, from a very pragmatic point of view, they are not such a big deal if they are a condition for cashing a big cheque.

[Nick Grey]

Looks like we want more female participation, better health, whether sports or other.
Or hire pub rooms etc.
Any link with other govt organisations may be better.

The local football team are fine with no VAT on football pitch/changing room hire for the number of pitches we use.