5A-5 BC lawsuit against CMA, Max Chess Academy

[Vladimir Drkulec]

https://vancouversun.com/news/local-news/vancouver-teen-prodigy-sues-chess-tournament-allegations-cheating

There is a lawsuit regarding allegations of online cheating, due process, and other issues that the CFC has had to deal with in similar circumstances. There are lessons here for organizers and federation officials.

Let us understand that this is ongoing litigation that does not involve the CFC, so be circumspect in your comments. There were situations that could have developed into this type of a situation but we did put some thought to our responses.

The case is troubling on a number of levels, most notably how it is being portrayed in the media. We have been spoiled lately with articles about chess, which are written by journalists who kick the tires of Canadian chess and try to understand all the nuances of their stories, but sometimes this doesn't happen and you get an article like this one which makes some errors that easily could have been addressed if there wasn't a bit of a rush to publish.

Paul Leblanc asked that we include an item about this situation. I think he wanted to also consider how the need for liability insurance might fit into this.

[Michael Lo]

It would be great if CFC, provincial chess federation and other chess organizations could share their experience/coverage/premium on liability insurance.

I will start with the chess organization I involved in - Chess2Inspire Association (chess2inspire.org), we main runs junior tournaments in BC, mainly BC Chess Federation sanctioned tournament, e.g. the BC Junior Chess Championship, BC Youth Chess Championship and the Intermat (BC vs Washington). We hosted weekly free chess lessons in libraries for a few years before the pandemic and is looking forward to resuming the program once we have enough volunteers.

We have Directors and Officers insurance from day one of our operation since 2013. Premium this year is about $300 purchased under a group insurance program provided by Volunteer Canada (membership fee is about $300). Coverage is 1/2 million (500K). We just picked 500k coverage arbitrary as a safety net. We also purchase event insurance for each tournament we host. We've never been sued, and never made any claim.

With the BC lawsuit in progress, we would like to take a more serious look into how much coverage is "reasonably" enough. Any suggestion?

Thanks,

Michael Lo

[Vladimir Drkulec]

The CFC does not have any liability insurance. We have looked at getting it on a number of occasions but in each case it didn't make sense.

[Michael Lo]

Thank you Vlad for responding.

Could you elaborate a bit on "in each case it didn't make sense"?

Thanks,
Michael

[Vladimir Drkulec]

Thank you Vlad for responding.

Could you elaborate a bit on "in each case it didn't make sense"?

Thanks,
Michael

We could get directors liability insurance, sometimes at a significant cost, sometimes more reasonable but with limitations on what is covered. For the directors of the CFC we can get sued when we do something that is outside of our bylaws or outside of the Not for profit corporations act. The last time I felt we were in grave danger was when the board directed me to demand a resignation of an elected official, misinterpreting the law. Doing what they asked would have left me and the CFC open to a lawsuit so I said that I would consult Les Bunning who is a lawyer and former CFC president. Les said not to do it. People got angry at me but then the other board members consulted Les and he told them not to do it and the crisis passed. If I had done as I was asked, I doubt that insurance would have covered us, because I would have been acting unlawfully outside of the bylaws and NFP act. This whole situation was litigated when we had my impeachment vote.

I have a pretty good record when I have to go to court, but if I had done what I had been asked to do, I could foresee that we could have been looking at a judgment of several hundred thousand mainly because of the emails that had been sent which would not have looked good to a court. Also it could have led to legal expenses of one hundred thousand dollars or more. Or I could refuse to do what was demanded of me and save the CFC a lot of grief and a lot of money. I refused. No lawsuits. No fuss. No muss.

Sometimes you need liability insurance to rent certain facilities. Sometimes in the case of the schools if you rent a school, there is very cheap insurance available as a rider to the school board's coverage. Quotes are all over the place. I am not sure what they would be today. As long as you refrain from doing anything dangerous or illegal, I am not sure anyone needs insurance for running a chess tournament, or a chess federation, or a chess club.

I only recall two lawsuits in Canada with regard to a situation in chess. One was the small claims action for copyright infringement a few years ago with very nominal damages but severe consequences if we went to court and lost and this court case against the CMA and Max Chess Academy/Vancouver Chess School which is a little more serious and likely more expensive. Having insurance in a case like this might mean that the insurance company would be in charge of your defense and might perhaps demand that you settle to mitigate costs.

[Michael Lo]

I believe that we can get sued when someone decided to sue. It can be anything that is outside/inside/in the gray area of our bylaws or of the Not for profit corporations act.

The story that you detailed looks like a lucky narrow escape that no one got sued.

When CMA and Vancouver Chess School made the decision to declare the player cheated and imposed a life ban punishment, the two organizations have no intent to do something dangerous or illegal. They got sued.

Is there any lawyer in this group that can give us some professional opinion?

Thanks,
Michael

[Paul Leblanc]

If there are any other chess organizations in Canada that have liability insurance that pays legal fees and penalties for situations like this please share the details

[Vladimir Drkulec]

I have solicited some quotes for insurance. Hopefully some come in before the end of the meeting.

[Vladimir Drkulec]

I believe that we can get sued when someone decided to sue. It can be anything that is outside/inside/in the gray area of our bylaws or of the Not for profit corporations act.

The story that you detailed looks like a lucky narrow escape that no one got sued.

When CMA and Vancouver Chess School made the decision to declare the player cheated and imposed a life ban punishment, the two organizations have no intent to do something dangerous or illegal. They got sued.

Is there any lawyer in this group that can give us some professional opinion?

Thanks,
Michael

You are right that anyone can sue anyone. Your best defense is not insurance which will likely not cover you for the type of lawsuit we are discussing but to make yourself an unattractive target and also to refrain from actions that make you a target. If someone sues the CFC and we have done nothing wrong, we will sue you back and we will pursue you to the ends of the earth when we win. My experience of court cases, tribunals, or any other cases, is that I win. I prepare well, and will be persuasive, will understand the law and the precedents, and if necessary will have a good lawyer who will understand my case.

I am not saying that the CMA or Vancouver Chess School did anything wrong but an additional layer of protection probably would have been to hold the tournament on one of the commercial platforms like chess.com or lichess.org whose anti-cheating measures would have provided an extra layer of protection. The CFC would not have permanently banned the player given the young age. In most cases, when players have cheated, they do admit it. You have to frame it in a way where you tell the player that they have made a mistake, violated the rules, but that does not make them a bad person. They need to own up to their mistake and face the consequences which are not draconian. For those who admit their mistake I think the penalty is four months to a year depending on their age and the penalty only applies to online play. They can't play in those online events for the period of the suspension. They can still play in over the board tournaments.

The online platforms do not always provide good reasons or specific reasons for suspensions so you have to look at the games in question. From the facts of the case, it seems that the player was offered a hearing which was declined by the parents. The only evidence provided for the defendant is the testimony of a somewhat rusty national master. The CMA/Vancouver Chess School have the world authority on chess cheating on their side. I would also have more experts weigh in to counter their one expert. If they have a semi-competent lawyer who understands the case, they will likely win unless they settle in which case they will face more cases in the future.

[Michael Lo]

We should not be looking into details of individual cases whether each case will win or lose. We should look at the risk of any devastating financial damage to the organization and/or its directors and officers if we get sued and lost (or ruled by count to have shared responsibility). Then balance that risk, no matter how low, with the cost (insurance) to protect against the risk.

Thank you for getting quotes so that we have an idea of the cost. From my experience, joining Volunteer Canada then going with their group insurance (https://www.underourwing.bmsgroup.com/home.html) is one of the cheapest way to get insured.

For our small organization, we only purchased the Directors & Officers insurance, not the Commercial General Liability insurance. The purpose is to protect the volunteers - in rare cases the Directors & Officers could be held personally liable for decisions they made on behalf of the organization. We are a small organization and all of the organization's assets are just a very small amount of cash in the bank. Thus, we are not that concerned about the organization going bankrupt, we can always set up another organization and start from scratch. CFC and other chess federations would have different considerations.

Regards,
Michael

[Vladimir Drkulec]

From the point of view of the CFC, I just talked to one insurance company that I contacted and they can not offer insurance because we operate outside of Canada by sending teams to destinations around the world. They were a small company who only wants exposure in Canada.

We will look into Volunteer Canada but there is an expense involved in joining that organization.

[Vladimir Drkulec]

We should not be looking into details of individual cases whether each case will win or lose. We should look at the risk of any devastating financial damage to the organization and/or its directors and officers if we get sued and lost (or ruled by count to have shared responsibility). Then balance that risk, no matter how low, with the cost (insurance) to protect against the risk.

Thank you for getting quotes so that we have an idea of the cost. From my experience, joining Volunteer Canada then going with their group insurance (https://www.underourwing.bmsgroup.com/home.html) is one of the cheapest way to get insured.

For our small organization, we only purchased the Directors & Officers insurance, not the Commercial General Liability insurance. The purpose is to protect the volunteers - in rare cases the Directors & Officers could be held personally liable for decisions they made on behalf of the organization. We are a small organization and all of the organization's assets are just a very small amount of cash in the bank. Thus, we are not that concerned about the organization going bankrupt, we can always set up another organization and start from scratch. CFC and other chess federations would have different considerations.

Regards,
Michael

Actually it is not in rare cases that the directors are responsible. In every case where the assets of the corporation are insufficient, the directors are liable. In every case where the directors do not follow their fiduciary duty, they are responsible and liable. It is not a small thing to be a director. The duty of care is that of a prudent person.

[Vladimir Drkulec]

Some of the insurance companies do not like you if you have events which have more than 500 participants.

[Michael Lo]

From the point of view of the CFC, I just talked to one insurance company that I contacted and they can not offer insurance because we operate outside of Canada by sending teams to destinations around the world. They were a small company who only wants exposure in Canada.

We will look into Volunteer Canada but there is an expense involved in joining that organization.

We can try asking for quotes from the BMS Group for premiums with & without joining Volunteer Canada.

[Michael Lo]

Some of the insurance companies do not like you if you have events which have more than 500 participants.

They just limit the coverage, and the rest can be covered by event insurance. We purchase individual event insurance for every tournament we host.

[Vladimir Drkulec]

They just limit the coverage, and the rest can be covered by event insurance. We purchase individual event insurance for every tournament we host.

How much does that cost?

[Michael Lo]

A 3-day OTB tournament of 300 players cost about $200 with 5 million coverage (minimum required by most venue providers, adding them as additional insured).

Paul has a much cheaper source that I never use before, he can provide details.

Some venues already have annual event insurance, thus do not need additional event insurance. Most of the venues we use do require us to purchase event insurance.

[Paul Leblanc]

When we hold events in hotels they do not generally require that we be insured as their own insurance covers the normal types of accidents while on hotel property. That does not include liability insurance for organizers being sued for anything else. Recently we have been using a community recreation centre for rapid events. Their recommended insurance company that is used by other event holders is very inexpensive, something like $10 per day for a group of 40 players. But I suspect it is a case of "you get what you pay for".

[Paul Leblanc]

I am surprised that no one else seems to have liability insurance or any interest in this topic

[Olga Mushtaler]

Parks are considered Ontario public space and are under Municipal Liability Act. If something happens in the park, I can sue the government (i.e. twisted ankle because of a hole in the ground and no sign). Municipal liability also includes streets, highways, sidewalks, and public transportation. You can do the same for pot holes while driving - I think my friend got $500 from the government (for the tire damage because of pot hole).

[Olga Mushtaler]

My question to you all - do you think it's fair to impose a lifetime ban on a kid for cheating in chess?

[Vladimir Drkulec]

My question to you all - do you think it's fair to impose a lifetime ban on a kid for cheating in chess?

We don't, but apparently the Vancouver Chess School did outline that as the consequence for cheating. I believe he is banned from VCS and CMA events.

There are people who go through life cheating and are shocked when it catches up with them. I am not specifically talking about chess.

Is it fair that CMA and Vancouver Chess School get dragged to court over this situation? Life is not always fair.

[Olga Mushtaler]

Out of curiosity, I just checked university policies on cheating (to compare). Starts with a warning and ends with expulsion. Expulsion is to be imposed for EXTREME forms and/or MULTIPLE incidents of academic dishonesty.

[Don Hack]

For one offense, no.

Some form of graduated punishment for each offense structured such that there is hope that they learn cheating is not OK.

[Vladimir Drkulec]

Out of curiosity, I just checked university policies on cheating (to compare). Starts with a warning and ends with expulsion. Expulsion is to be imposed for EXTREME forms and/or MULTIPLE incidents of academic dishonesty.

I don't think warnings are the default, at least they weren't when I taught at the University of Windsor. A zero on the exam in question which made it very hard to pass a course. During a mid-term exam when my TA cancelled on me at the last moment due to an illness, a lot of the students in the class took the opportunity to cheat. I had a record of where everyone was sitting and so had a good idea of who was cheating but you can't always prove things but we threw out the exam and gave everyone the same exam with the questions scrambled. It was multiple choice. We had four versions of the re-test with basically the same questions. The math questions had been changed slightly. They all looked like the same test. If you were writing version A and you were copying from someone who had version B or version C or version D you would get every answer wrong if the person you were copying from had every answer right. Some people did copy from very smart people. They did not get the result they hoped for.

[Aris Marghetis]

Dear Michael, please feel free to email me your contact info, and we can have a call about other organizations. Or we could meet at the CYCC/CO in-person?!

[Michael Lo]

Dear Michael, please feel free to email me your contact info, and we can have a call about other organizations. Or we could meet at the CYCC/CO in-person?!

Hi Aris, the forum email is not working. We were in touch before through email in 2021 and I just sent you an email using that email address. Please let me know if you do not receive it.