Don't Fight The Law

If you ask anyone who has been or still is in a band, the'll instantly tell you how much fun it is. I record as a solo artist and play all intruments (vocals included) These days I do it because I have to. I find writing, recording and producing exhilarating. A 'conventional' band on the other hand pose a totaly different set of variables into the equation. What musicians need to know is that the band business is full of potential legal liability. Very few people see it that way, but they should. A band usually travels, it owns heavy electricity based gear and lights; much of which is very expensive. The band relies on as many people as possible coming to one place to see them if they want to succeed. A lot of the places that bands hang out serve alcohol and people are there to let loose, party,and have a good time.


The fun, rewarding parts as well as the potentials for legal disaster if your band manager does not take the proper steps pretty-well nulify each other. The potential disaster scenarios are present regardless of whether you are a small startup band playing in the bottom tier clubs or parties or have gained some popularity and are playing larger venues or the big stage.


There are many disaster scenarios. This is where band managers step in. They should have multiple 'escape plans' in place on the likelihood of pretty-well anything going pear-shaped for your band. Here is just one such disaster scenario that I think everyone who has ever played in a band will realize is not at all far-fetched. There are many others, but here is one.


Here's the disaster scenario:


You have worked hard to put your band together. Over the past few years, you have had several changes in lineup. First you replaced the drummer that was late on every fill and had the personality of Gumby. Then you vocalists' wife was jealous and you ended up replacing him. The lead guitarist had a huge ego and was messing up the vibe. This story of building a band are common. We have all been there.


Now, finally, you have a cookin' band. Your summer is looking great: all festival dates, even a couple of big backup dates. The band is cookin'. You have hit your stride. Success is coming, you can feel it.

One night, you are playing one of the old clubs that you started out in, more or less for nostalgia but certainly not for the money. A couple of the members decide to make a party of it. These are old friends there and they keep buying drinks for the band. By the end of the night, a couple of the members are pretty lit up. After the gig, the lead singer (We'll call him Charlie), gets in his car to drive to an after bar party. On the way there he swerves into the coming lane and runs head on into another vehicle. He has no insurance. Charlie has no assets. His only income comes from the band. The other car involved files a lawsuit. Who are they going to sue?


If you have not organized your band through an official corporate or LLC entity, every member in the band is likely to be sued. The law is likely to deem you to be a partnership. Every partner is jointly and severally liable for all damages caused by other partners. That means everyone is potentially responsible for the full extent of the damages.


Now let's say the drummer, let's call him Adam, has a great job. He has amassed a ton of money in the bank and investments. He owns a million dollar home where the band rehearses in his plush rehearsal room. He owns multiple businesses. He is set.


The lawsuit comes up and finds that the singer was responsible for causing the accident. 100 % responsible. Each member of the band is joined as a party because there was no legal entity formed for the band. The band members filed a motion to dismiss early on in the lawsuit claiming that the singer was not acting within the scope of the business of the band. The court rules that he was acting within the scope of band business at the time of the accident. He was leaving a band show.


Damages come down at $5,000,000. Each partner is liable for the full $5,000,000 under joint and several liability principles. There is no insurance. Everyone except Jim is poor. Adam is worth $10,000,000. Who do you suppose is going to pay the damages? Adam, who drank water all night.


The next thing that happens is that Adam gets summons to appear at a supplemental collections hearing where the other side asks him questions, under penalty of perjury, about what he owns, what he is worth, where his assets are etc.

The next thing you know, Adams house is attached. His wages are garnished. Someone comes and gets his boat. All sorts of things start happening in Jim's life. All because he played in the band where the singer, who no-one knew was battling alcoholism, got drunk and swerved in the oncoming lane on the way home from the gig. The guy is plainly more of an alcoholic than he is a rock star like Eric Clapton.


A lot of bands are pretty apathetic about their business structure. They go to gigs, collect cash and split it up at the end of the night. They give very little thought of legal liability or protection of assets.


So the lesson here is, if you are in a band do not assume that you are immune from possible liability just because you have not yet "made it" or you are just doing it on the side. The band business is filled with possible legal issues, regardless of the size or success of the band. You need to take the appropriate legal steps to protect yourself and your assets from exposure to these risks.

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