BPA PROTECTION RACKET?

BPA PROTECTION RACKET?

By Don Canard

On its website, British Parachute Association Ltd trading as British Skydiving states that it “controls all aspects of skydiving on behalf of the Civil Aviation Authority (CAA).”.  This is a clear statement but less clear is the precise point at which the CAA delegated these regulatory powers to the BPA. It appears to have been in 1996 but executives from both organisations seem reluctant to answer questions about it. 

 

British Parachute Association Ltd Ltd trading as British Skydiving depicts itself as a not-for-profit sporting association. However, the firm has profited substantially over the years from its near-monopoly of parachuting in the United Kingdom, a monopoly it seems highly focused on completing by putting any parachuting organisation or club that refuses to pay its dues to the BPA out of business.

 

BPA Ltd declares membership figures of “around 6,400 full members and around 60,000 students each year.”. Full members pay annual subscriptions of £100, of which £40 is said to be for insurance. According to a paper published in May 2020 by an alliance of twenty-one of the twenty-nine BPA-affiliated Parachute Training Organisations, these PTOs have to pay a levy to BPA Ltd of £18.74 for each ‘student’ or ‘temporary member’. 

 

These ‘students’ include people carrying out tandem skydives for charity or for thrills. Those who wish to continue skydiving must then register as full BPA members in order to do so. The authors of the PTO paper state that £11.23 of the levy is to cover insurance. 

 

These figures suggest that BPA Ltd receives £1,124,400 a year in temporary membership fees. After deducting the insurance fees, BPA Ltd would retain about £450,600. In its Annual Statement in June 2019, BPA Ltd declared £4,066 as its income from temporary membership, equating to less than 1% of £450,600.  Several PTO operators estimate that BPA Ltd, in fact, receives twice this figure or well in excess of £2 million a year in tandem skydiving-related income alone from its affiliated PTOs, for whom tandem skydiving is worth more than £20 million a year.  

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In the 2019 Annual Statement, BPA Ltd stated that it received £739,542 in insurance-related income but spent £740,728 on insurance. However, according to the published figures, BPA Ltd’s insurance-related income would be in the region of £929,800 rather than the declared total of £739,542. Presented with this calculation, neither BPA Ltd’s outgoing Treasurer Debbie Carter nor her successor Natasha Higman responded. Nor did BPA Ltd’s Chairman Craig Poxon and BPA’s Chief Operations Officer Tony Butler.

 

When Parachute Training Organisations apply for BPA affilation, they are contractually obliged to accept and pay for the insurance cover provided by the BPA though its Leeds-based insurance brokers Romero Insurance Brokers Ltd. Full and temporary BPA members are also obliged to pay the BPA-Romero insurance levy. A number of London-based insurance brokers opined that the policy should cost no more than £500,000.

 

Kickbacks are part of the corporate insurance game. BPA Ltd never puts out to tender for insurance quotes despite the efforts of directors and council members, who say they have been threatened by “the ghost directors” and subjected to constructive dismissal tactics for challenging the opaque management of the firm. More troubling, however, is the strong possibility that the BPA-Romero insurance policy is worthless.

According to the Summary of British Skydiving Members’ Insurance, dated March 20^th 2020 and co-published by BPA and Romero, Section (b) of the General Policy Exemptions on Page 3 excludes injury to any employee. Section (d) states: "Liability assumed under contract unless such liability would have attached to the insured in the absence of said contract.". Section (e) stipulates that the exclusion clauses take effect if fees have changed hands for "professional services.". 

Simon Mabb and Justin Romero-Trigo of Romero: No Comment

 

On the same page of the policy summary, Section (c) suggests that Health & Safety at Work defence costs are covered. This seems reassuring until one recalls Section (e) of General Policy Exceptions, which annuls insurance cover if fees have changed hands for professional services. If the (alleged) insured party is covered by Section (e) of General Policy Exceptions, how can he or she be covered under Section (c)? 

 

We put these questions to Justin Romero-Trigo and Simon Mabb of Romero but received no response. Nor did BPA Chairman Craig Poxon and BPA COO Tony Butler respond. 

 

In summary, as soon as a Full or Temporary BPA member pays any kind of fee to a BPA-affiliated PTO, instructor or examiner to make a parachute jump, the BPA insurance is null and void. A number of criminal offences spring to mind when one looks at this apparent insurance scam but the phrase that trumps them all is protection racket. Skydivers are being coerced into paying BPA Ltd for protection that they will clearly never have.

 

  With Mike Bravo's analysis of BPA Health and Safety compliance in mind, would any reputable insurance broker or underwriter agree to insure a high-risk aviation-related sporting association whose CAP 660 operating manual omits important references to Health and Safety regulations and practices? In the case of BPA Ltd's insurers, it may be a moot point as the policy seems deliberately worded with the aim of rendering claims difficult or impossible.    

Don Canard