High Court brings an oasis of calm to group dispute

Many observers of the music business will by now have heard that the one time member of Oasis, Tony McCarroll, has failed in his attempt to sue his former solicitors. This claim was brought after he had settled his dispute with Oasis over his expulsion from the group in April 1995. His failure to sue his solicitors successfully was for technical reasons due to his delay in bringing the claim. The result is not of groundbreaking legal interest. However, the claim does illuminate the important issue of ownership of a group’s name and touches upon how members of a group and their advisers should organise their affairs.

McCarroll’s argument was that his solicitors had failed to advise him properly about his relationship with the other members of Oasis. He also argued that he had not been advised properly about ownership of the name of “Oasis”. He maintained that the wording of the recording agreement combined with the lack of a written partnership agreement meant that the members of the group (other than Liam and Noel Gallagher) were vulnerable to instant dismissal without compensation.

The dispute turned partly on what was said by Oasis’ solicitor when he took the group through their recording agreement before signing. It also turned on whether his solicitor should have advised McCarroll and the others to enter into a written partnership agreement.

McCarroll said that the implications of certain clauses in the recording agreement were not adequately drawn to his attention and they created a conflict of interests between the group members. The Gallagher brothers, McCarroll argued, were being wrongly favoured. He complained that the solicitor should have advised him to secure independent advice and should have advised all the members of the group to enter into a written partnership agreement: had they done so, the agreement would have provided a suitable mechanism for dealing with a member leaving or being expelled. As it was, the group were operating as a partnership at will and McCarroll was vulnerable to being expelled from the group without notice or compensation.

The judge noted that the name Oasis had been owned by the members of the band in equal shares, prior to entering into the recording agreement. But the effect of entering into the agreement was that McCarroll lost his share of rights in the name.

The solicitor concerned denied all of the allegations of negligence. He also disputed what was said when he took the group through the recording agreement. In the event the judge did not need to make a decision on these issues. He ruled that the McCarroll claim was barred because it had been brought too late.

Much time and expense has been devoted to arguing about what happens to a group’s name when a member leaves or the group splits up. This is an issue that can be dealt with relatively quickly and cheaply at the beginning of the artists’ career by entering into an appropriate form of agreement. It is notable how few such agreements are entered into. This is probably as much to do with a reluctance to incur additional professional cost as with the unwillingness of group members at the beginning of their career to address some tricky issues about what might happen further down the road. Advisers will have to consider carefully if they should draw the attention of a group to the desirability of entering into a formal partnership agreement in order to address some of these issues.

At present, most artists expect to enter into a management, songwriting and recording agreement. If they are not solo artists, then a partnership or shareholders agreement may become an equally critical part of their portfolio of business agreements. One crucial element of that agreement will be how to deal with matters if one of them leaves.

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