Event Legal Compliance

Event Legal Compliance
Chapter Thirteen Event Legal Compliance Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Chapter learning objectives
13.1 Recognise the differences between public liability, professional indemnity and property insurance policies 13.2 Recognise your legal obligations, the policy limitations and exclusions of your insurance policies 13.3 Understand the required elements and legal implications of negligence claims 13.4 Recognise the different types of public performance copyrights applicable to events Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Chapter learning objectives
13.5 Dissect and identify the elements of event contracts 13.6 Recognise the importance and legal implications of contracts 13.7 Evaluate ad compare the differences between standard deals in a booking agreement 13.8 Understand the requirements needed to obtain an entertainment visa 13.9 Analyse the benefits and pitfalls of different artist payment structures (deals). Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Units of Competence and Elements
SITXEVT502 Select event venues and sites 1. Determine venue or site requirements 2. Source event venues and sites 3. Confirm venue or site bookings SITXGLC501 Research and comply with regulatory requirements Research information required for legal compliance Develop and communicate policies and procedures for legal compliance Ensure compliance with legal requirements Maintain personal and organisational knowledge of regulatory requirements Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Units of Competence and Elements
SITXEVT503 Manage event 1. Analyse staging requirements 2. Source and organise staging contractors 3. Monitor staging preparations 4. Monitor staging preparations Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Introduction Risk management for events includes obtaining appropriate insurances to cover against loss, theft and cancellation. It is important for event managers to understand the legal implications of copyright, contracts and payment structures. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Public liability, property and professional indemnity insurance
Types of insurance common for events: Public liability insurance cover for accidents involving others Property insurance cover for damages to venues and sites cover for loss of contractors’ equipment under some circumstances Professional indemnity cover for loss sustained from taking advice from an event manager. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

The responsibilities of event managers: Obtain full and appropriate insurance cover Avoid disqualifying themselves from cover due to conduct Provide full disclosure of all high-risk activities and details of an event as required To be aware of the limitations of policies To include all parties on their policies to ensure adequate coverage. Disclosure – Failure to provide all details of an event can lead to the policy being void, often leaving the event manager responsible to cover the loss. Limitations – The ‘fine print’ that many don’t read can hide exclusions and clauses that would fail to cover under certain circumstances. All Parties – Some agreements with stakeholders require them to be named on insurance policies as an interested party. For example, many venue contracts require event managers to name the venue on their public liability insurance in case of injury or loss, and will not cover the costs if event managers fail to do this.  Activity: Obtain a copy of a contract from a large venue. Go through the details with the students and discuss some of the requirements that could cause an event manager problems if they do not name the venue on their policy. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Insuring and exclusion clauses Insuring clauses – the extent of the cover that the policy provides Exclusion clauses – remove the liability of the insurer under certain circumstances, such as from an act of war Event managers need to extend cover if they have exclusion clauses and are likely to encounter those issues. Subrogation Insurance company can place itself in the position of the insured Stops the insured making claims then pursuing others who contributed to a loss. Subrogation – means that the insurance company can pursue those who may have contributed to the loss instead of the insured, who may then profit from the incident. It also advises that event managers should never try to settle a claim without involving their insurance company. Doing so may make their policy void, as they cannot interfere with the insurance company’s right to subrogation. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Understanding negligence claims
The tort of negligence Event managers are generally indemnified against negligence under insurance policies. Tort – negligent or intentional civil wrong Negligence – omission to do something a reasonable man would do or something a reasonable man would not do Torts provide a legal remedy where contracts or statutes are not covering the parties. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Elements of negligence The event manager owed the plaintiff a duty of care establish if incident is a negligent act, then apply two tests: reasonable foreseeability test vulnerability test The event manager breached the duty of care if the duty of care is breached the following must be considered: standard of care breach of the standard of care Reasonable Foreseeability Test – If a reasonable person in the event manager’s position could have predicted the harm that would be caused from this conduct, and who may be affected if this was to happen, establishing whether the plaintiff was in that group of people. Vulnerability Test – whether there was a reliance between the plaintiff and the event manager. It will generally be so if they have specific knowledge, a position of power, and awareness that the plaintiff is relying on them to protect their vulnerability. Standard of Care – it must be established if the plaintiff was owed a standard of care, what level was owed and what another event manager may have done in similar circumstances. Breach of Standard of Care – it must be established that the risk was foreseeable, not insignificant, and a reasonable person in similar circumstances would have taken precautions. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

The plaintiff suffered loss flowing directly from the event manager’s breach loss or injury causation remoteness damages. Defences to a negligence claim Contributory negligence Voluntary assumption of risk Loss or Injury – as a direct result of the event manager’s breach with the risk not being unlikely. Causation – using the ‘but for’ test. Establishes whether the event manager’s act or failure caused the injury/loss and the injury/loss would have been suffered ‘but for’ the breach. Remoteness – the injury/loss was a reasonably foreseeable result of the conduct, and a reasonable person would have foreseen the incident and the likely damage. Damages – If all three above are established, payment or damages are awarded, generally covered by the plaintiff’s insurance. Contributory negligence – where the event manager must show that the plaintiff somehow contributed to the injury or loss by not taking reasonable care. Voluntary assumption of risk – the event manager must prove that the plaintiff was aware of the risk, understood and accepted the risk and continued with the activity regardless.  Activity: Have students do some research and see if they can find some examples of an event where contributory negligence was the result of a negligence case. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Licensing and copyright in relation to music
How to gain a license for public performance of sound recordings Phonographic Performance Company of Australia (PPCA) provide licenses for music at events Ongoing and one-off licenses Covers: sound recordings public performance communication to the public. Sound recordings – the sounds themselves, not the CDs they are on. Public Performance – playing of a sound performance in public. Covers performances in front of small and large, paying and non-paying audiences. Communication to the public – legally considered the same as public performance. Electronic transmission via TV, internet, etc. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Licensing and copyright in relation to music
Avoiding breaches of the Copyright Act 1968 Breaches occur if you make copies, or ensure it is heard or communicated in public. Applications to PPCA need to be made before the event. Seeking permission for music performance: Australian Performing Right Association (APRA) Event managers require an APRA license to broadcast music at events due to Copyright Law. To apply, go to and provide details of the event.  Activity: Take students on to the APRA website. Walk them through the different licenses and have them provide examples of circumstances where each license would be appropriate. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Understanding contracts
Venue hire agreements Often lengthy and complex Includes: parties to agreement venues/ancillary rooms concessionaires deposits, fees and expenses parking and other permits and approvals insurance, liability and indemnity copyright hiring period. These agreements offer event managers the opportunity to gain greater understanding of costs involves with venues, rights required and being aware of legal obligations, therefore reducing risk. Venues/Ancillary Rooms – includes green rooms, dressing rooms, back of house spaces. Concessionaires – Catering to be provided by venue, sometimes in exchange for commission to event managers. Deposits, Fees and Expenses – A fee is paid for the venue, along with a deposit, usually to secure the contract. Fees and expenses may also be payable for licensing or for use of facilities outside of the event times, as well as services provided at the approval of the event manager. Permits and Approvals – Event managers are required to obtain permits at their expense and it is their responsibility to ensure they have all permits required. These may include APRA/PPCA licenses and liquor licenses. Insurance – Events managers are required to obtain insurance for public liability (usually $20 million) and property damage. Liability and Indemnity – Event managers must indemnify the venue on their insurance policy. Copyright – obtaining APRA/PCCA licenses for music, and also licenses for literary works, artistic works, films and broadcasts as required. Hiring period – the dates covered by bump in, the event and bump out. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Ticket build agreements Providing information to ticketing agencies to allow them to promote, prepare and administer presale of tickets Include the following: details of event, event manager, publicist, venue and performance schedule price information ticket-header ticket holds general event information ticket build tips wheelchair allocations, advertising, ticket agent advertising. Venue details – single or multiple venues, mode (round, reduced mode, etc.). Price information – category names and prices (retail or nett). Ticket header – the information to be printed on the hard-copy tickets. Ticket holds – names for withheld tickets that are complimentary to events manager’s guests. General event info – terms and conditions of entry, conditions under which event is called off, etc. Wheelchair allocations – some seats may be unavailable for sale where venue changes configurations to suit wheelchair patrons. Advertising – all bookings fees and charges of ticket agent to be included in all advertising. Ticket agent advertising – banner ads on agents website are at an additional cost. Event managers need to decide if these additional promotions are necessary. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Booking/artist agreements Specifics of payment for artist’s services or ‘engagement’ Details of the contract are called the deal Simple booking agreements date and venue details for engagement technical rider hospitality rider length of engagement sound engineer fee for engagement method of payment and deposit details Process artists agreements – An ‘offer’ is made, outlining the general agreement. Event managers and agents can negotiate more freely if a contract has not yet been issued. The contract is drafted once the offer is accepted. Event managers should become familiar with standard deals. Simple Booking agreements – standard practice is to make a brief contract with the central components with a hospitality rider following. Technical rider – lighting requirements, backline (instrument) requirements, stage plots. Hospitality rider – flight, accommodation, transport and food and beverage requirements for touring party. Length of engagement – number of sets, timing, encore requirements, various locations. Sound engineer – whether one will be provided. Fee for engagement – including GST and booking agent fees (typically 10% of act’s fee). Method of payment – how the artist will be paid, whether a deposit is required, balance payments. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Complex booking agreements where and when what is expected artist’s fee merchandise sales promotion-related permissions hospitality sound, lighting and staging requirements. What is expected – exactly how long to perform including number of breaks, particular songs to be delivered. Artist’s fee – fixed fee/percentage of sales or combination of two. When payment made, to whom, how and deposit requirements. If EFT what account details. How balance to be paid, to whom and when. If based on ticket sales both parties should be present or given access to documentation regarding the outcome. Merchandise sales – Larger venues often have terms within their contract for sale of merchandise, including % of sales. Venue generally provide staff to sell items. Promotion-related permissions – Agreement should give event manager rights to use performer’s name and likeness to promote event, and should provide bio and promotional tools upon booking confirmation. Hospitality – dependant on type of event and profile of the artist. For extensive lists, a hospitality rider should be provided, detailing all flights, accommodation, meals, transport requirements of touring party. Details of the number and style of accommodation rooms is essential, plus if event manager is providing room only or full incidentals. Sound, lighting and staging – Clearly state who is to provide these services and how it is to be implemented into the schedule. A production rider should be requested for lighting design, sound specifications and backline requirements.  Activity: Have students try to find hospitality riders for headline acts and compare the requirements. Alternately, provide some examples for students to discuss. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Obtaining an entertainment visa
Event managers usually obtain the permits, visas and licenses. For international artists the event manager sponsors the artist’s working visa application. Forms, union approval and travel insurance 420 subclass via is required for International artist 147 form – temporary resident’s visa 956 form – authorised recipient 1379 form – union approval. Forms – 1379 form covers whole touring party. 147 and 956 forms must be completed by each individual. Entire touring party must have travel insurance and supply copies to the Department of Immigration and Citizenship along with copies of the contract. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Statement of economic benefit Number of Australian workers for the event Economic benefit to Australia Acknowledgement from ATO regarding withholding tax from artist’s fee Include details via Statutory Declaration of: military service criminal convictions mental illness deportation outstanding debts within Australia weapons or explosives training. Statement of Economic Benefit – produced as part of the visa application, and needs to show clear economic benefit to the Australian economy – usually done as a budget line item. Withholding tax – the sponsor (event manager) must agree to withhold tax from the fee paid to the artist to be given to the Australian Tax Office and refer the artist to an International tax agent. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Visa application tips Lead time – 12 weeks is recommended Maximum stays of 1 week either side of event Keep hard copies of all signed immigration documents 1379 union forms – group fee is available Musician’s Union of Australia requires extra time Department of Immigration and Citizenship processes according to arrival dates Non ETA countries must attend an interview Passports must have minimum of 3 months validity. Lead time – can be processed in as little as 8 weeks but it is best not to recommend this time frame. Maximum stays – if artists wish to extend past this they must fill in a 601 application and pay a fee. 1379 fee – can be reduced significantly if applied for as a group. Musician’s Union – very small staff base so may require additional time to process 1379 forms. Immigration – early application does not guarantee early approval. Non ETA – countries without Electronic Travel Authority must have their citizens attend an interview even if they have an approved 420 visa. The Australian consulate official requires approval even where countries have ETA. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Acts of God Provisions to protect both parties. Cancellation Penalties will depend on sufficient notice If promotion has occurred penalties tend to be imposed. Specific requirements of/restrictions on the performer May include dress requirements, announcements, acknowledgement of sponsor, media commitments, launch parties, use of sponsor’s products. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Insurance and security Public liability (PLI), equipment and property insurance for event manager Performer should obtain PLI and equipment insurance. Contract and offers in context Written contracts become critical for complex performances Form of legal protection. Booking agents and offers in context Event managers liaise with agents regarding their artists For one-offs agents forward contract to be signed and await deposit for confirmation. Bookings agent – offers from events managers creates a process whereby less lucrative deals can be disregarded and only positive deals considered. Agents usually get 10–20% commission from fee. Examples include Australian Network Entertainment and IMC. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Different types of artist payment structures (deals)
Flat guarantee Fixed amount Risk is if numbers are low, same amount is paid regardless. Guarantee plus percentage As above, but also allows artists to share profit Advantage is that artist will assist with promotion. Guarantee versus percentage As per above, but artist may receive a percentage of ticket income if it is greater than the guarantee Difference between what is received and what was guaranteed is called overage. Flat guarantee – common for events with multiple acts, such as music festivals. To reduce risk, event managers try to secure the act at the lowest possible guarantee to maximise profit. Guarantee plus percentage – Artists are encouraged to help promote the event since it is in their best interest to have maximum attendance. The percentage will usually start from when the ticket sales reach a certain amount that has allowed the guarantee and all expenses to be covered, as well as a profit for the event manager. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Deal terms and concepts used to predict potential earnings
Walkout Walkout potential Gross potential Net potential Breakeven point Split point Walkout – final amount given to the artist after an engagement. Walkout potential – greatest amount an artist will walk away with, such as if an event sells out. Gross potential – greatest amount of income that could possibly be generates by ticket sales. Total saleable capacity x ticket price (excluding complimentary tickets). Net potential – greatest amount of income that could possibly be generated by ticket sales after taxes and fees. Breakeven point – the point where the event is no longer running at a loss – net income is greater than or equal to total expenses. Split point – the point where an artist exceeds the guaranteed amount in a versus deal. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Chapter summary Event managers need to be aware of their legal obligations for all different types of events. Knowledge of the difference between public liability, property and professional indemnity insurance is vital. Negligence is determined in several ways, and event managers again need great knowledge of these. The performance of any music requires several licenses, available through PPCA and APRA. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Chapter summary Contracts for venues, ticketing and artists can be complex and often come with insurance requirements. Booking agreements often come with technical and hospitality riders that must be provided for. Obtaining entertainment visas require significant documentation to be lodged. Payment structures for artists can depend on the event type and event managers must choose a structure that provides the best outcome. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Event Management: Theory and Practice 1e by Wrathall and Gee

Event Legal Compliance

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