When the Club Is the One Convicted: Corporate Criminal Liability of Sports Entities (Art. 31 bis CP)

For years, the criminal reproach in sport stopped at the individual: the director, the intermediary, the player. Since the introduction of the criminal liability of legal persons, the question raised in any investigation touching a sports entity is a different one: is the club liable too? And the answer, more often than is usually assumed, is yes.

You are under investigation, and so is the club: the two routes under Art. 31 bis.1 CP

The provision opens two distinct paths, and it is worth not confusing them because they have very different defensive consequences:

• Letter a) — those at the top. Offences committed in the name or on behalf of the entity and for its direct or indirect benefit by its legal representatives or by those who, acting individually or as members of a body, are authorised to make decisions on its behalf or hold powers of organisation and control. Chairman, chief executive, general manager, sporting director.
• Letter b) — subordinates. Offences committed in the course of the entity's activities and on its behalf and for its benefit by those under the authority of the persons above, where the acts were made possible by a serious breach of the duties of supervision, oversight and control, having regard to the specific circumstances of the case.

Letter b) is the one that generates the most cases and the one that is worst understood. It is not enough for an employee to commit an offence: the serious breach of the duty of supervision has to be proven. That is the fact the prosecution must prove and the one the defence must challenge.

A closed catalogue, not a general clause

Legal persons are liable only in the cases provided for in this Code. There is no criminal liability of the entity for any offence whatsoever, only for those the legislator has expressly provided for. In sport, the ones that come up again and again are:

• Corruption between private parties and match-fixing (Arts. 286 bis to 286 quater CP). Art. 286 bis.4 CP expressly extends the offence to the directors, managers, employees or associates of a sports entity, whatever its legal form, as well as to athletes, referees or judges, in relation to conduct aimed at deliberately and fraudulently predetermining or altering the outcome of a contest, match or competition of particular economic or sporting significance. We analyse this in detail in our article on match-fixing and sports corruption.
• Money laundering. Common in transfer deals involving opaque intermediaries and interposed corporate structures.
• Fraud in the marketing of rights, season tickets or sponsorships.
• Offences against the Public Treasury and Social Security, the classic ground in athletes' pay and image rights.

The penalties under Art. 33.7 CP

All of them are classed as serious. The range is notably harsher than is usually assumed:

• A fine, daily-fine or proportional.
• Dissolution of the legal person, with permanent loss of its legal personality and of its capacity to act in legal dealings.
• Suspension of activities for a period of up to five years.
• Closure of premises and establishments for a period of up to five years.
• A ban on carrying out in future the activities in the course of which the offence was committed, favoured or concealed: temporary, up to fifteen years, or permanent.
• Disqualification from obtaining public subsidies and aid and from contracting with the public sector.

For an entity that depends on federated competition, on the assignment of municipal facilities and on public subsidy, suspension of activities or disqualification from receiving aid can be more damaging than the fine.

What the model has to include to provide an exemption

Art. 31 bis.2 CP is demanding, and in practice this is where the case is decided. For a director's offence not to draw the entity in, it is required, among other conditions, that:

• The governing body has adopted and effectively implemented, before the offence was committed, organisation and management models that include the oversight and control measures suitable for preventing offences of the same kind or for significantly reducing the risk of them being committed.
• Supervision of how the model operates and is complied with has been entrusted to a body with autonomous powers of initiative and control.

Three words account for almost all the litigation: implemented, effectively and before. A model approved in the minutes but never rolled out does not provide an exemption. One rolled out without an operational channel, without demonstrable training and without traceable decisions does not either. And one put in place after the case has already broken does not help for the act under investigation, although it may serve as a mitigating factor. This is explored further in our analysis of the exemption from corporate criminal liability through compliance.

What sets a sports entity apart

The scheme under Art. 31 bis CP is common to any legal person, but sport adds features of its own that shape both the risk map and the defence:

• A mixed structure. The professional section and the youth academy, employed staff and volunteers, the parent entity and the foundation, all coexist. Determining who holds powers of organisation and control is not always obvious, and it determines whether letter a) or letter b) applies.
• Intermediation. Agents, representatives and interposed companies operate at the edge of the organisation. Whether they count as "associates" for the purposes of Art. 286 bis.4 CP is a recurring question.
• Minors. The youth categories impose reinforced oversight duties, and failing to meet them is precisely what feeds the route under letter b).
• Organised supporters. Violent incidents involving groups of fans raise the question of whether the entity breached a duty of control, a different matter from individual liability for assaults committed on the pitch.

Lines of defence

• Deny the benefit. Without a direct or indirect benefit for the entity there is no liability, however serious the director's act.
• Challenge the serious breach of the supervision duty in cases under letter b): not every organisational shortcoming amounts to a serious breach.
• Prove the model's effectiveness, not merely its existence: minutes of the compliance body, incidents dealt with, training with records, documented decisions.
• Check that the offence is in the catalogue. It is a common mistake to extend the legal person's liability to offences it is not provided for.
• Separate the defences. The interests of the entity and of the director under investigation almost always diverge; a joint defence usually harms both.

If your club, SAD or federation is facing a criminal investigation, or you want to review whether your prevention model would withstand scrutiny under Art. 31 bis.2 CP, you can consult our criminal defence service for sports clubs and entities or call us at +34 91 078 65 74.