Legal Threats to the Church

Thousands of churches are sued every year in the United States, usually by their own members. These lawsuits are typically triggered by power struggles, sharing confidential information, questionable counseling practices, sexual misconduct, or church discipline.

These conflicts can be converted into a variety of legal claims, including: violation of corporate bylaws, breach of confidentiality, defamation, breach of fiduciary responsibility, negligent hiring, supervision or retention of employees or volunteers, invasion of privacy, or infliction emotional distress.

Losing a lawsuit can result in devastating damages awards. Yet even when a church wins in court, it usually pays an enormous price in terms of legal fees, lost time and energy, distraction from ministry, and congregational dissension over the underlying causes of the conflict.

Money has become a major factor in church litigation. Tort actions against churches typically allege multi-million dollar damages. As large awards against churches receive front-page coverage, more people are tempted to see lawsuits as a way to financial gain.

The American preoccupation with individualism also has contributed to the increase in litigation in the U.S., as has our diminished respect for authority and our embracing of relative morality. These changing attitudes have resulted in a general antagonism toward the concepts of responsibility, accountability, and discipline found in the church.

These attitudes are not confined to people outside the church. Many professing Christians prize individualism and independence more than they do responsibility and accountability. As a result, they are easily offended if their church attempts to correct unbiblical behavior. As many churches discover, it doesn't take much for that offense to turn into the kind of anger that triggers a lawsuit.

Churches are often shocked to discover that they can be sued even when they sincerely believe they have done nothing wrong. And once an action is filed, they cannot simply say the complaint is unjustified and then ignore it. If the church does not respond with a full defense, it will lose automatically by default judgment and be subject to financial damages.

The direct legal cost of defending against even a simple lawsuit can easily climb into hundreds of thousands of dollars. A church's legal defense costs are paid on a set hourly rate. Every time you talk with your attorney, the clock is ticking and your bill is increasing. Even if your church wins the lawsuit, it usually does not recover even a dime of its legal costs. Thus, even legal victories come at a high cost.

When a church loses such a lawsuit, awards for actual damages can easily exceed $100,000. Punitive damages awards can be even higher, climbing into the millions of dollars.

Even apart from these financial burdens, litigation can pull a church down like a monstrous whirlpool. Lawsuits—even the threat of lawsuits—inevitably cause major, irresistible disruptions in a church. A lawsuit demands a great deal of time, energy, and attention from key leaders, thus pulling them away from important ministry responsibilities. Litigation can also attract damaging publicity and divide a congregation, as members argue over who is to blame for the problem and how the suit should be handled. And like a whirlpool, it can spin for years, until the legal process runs its course of complaints, motions, depositions, hearings, trial, judgments, and appeals.

Even when a church is incorporated, its pastor and officers still can be found to be personally liable for damages awards in lawsuits related to counseling, confidentiality, sexual misconduct or church discipline. If insurance does not cover the entire award, a prevailing plaintiff can recover his damages from a single church leader, who may then be compelled to sue his fellow officers to force them to share that cost.

Good insurance usually covers most of the financial costs associated with a lawsuit; however, it is sometimes insufficient to fully cover large damages awards. Moreover, insurance can never compensate a church for the lost time, strife, frustration, and diversion from ministry that is necessitated by a lawsuit.

The moral of this ominous litany is quite simple: It is not good enough for your church to do things so well that you will prevail in a lawsuit, because even if you win, you have lost too much. Instead, today your church must do everything so well that you will prevent lawsuits from ever being filed.

Protecting Your Church

Risk management in the church is not primarily about building legal walls that will satisfy a judge. It is first and foremost about practicing biblical wisdom in a way that will please God. To put it another way, your best defense against destructive conflict and legal liability is to be thoroughly and consistently biblical in the way you relate to one another in your church.

Biblical wisdom also means being aware of current legal liability issues and implementing biblically valid risk management practices. There are a number of things that a church can do to dramatically reduce its exposure to destructive conflict and avoid legal liability. These steps include:

1. Follow the Golden Rule: The wisest and most practical legal advice you could ever receive will not cost you a dime. You can find it in Matthew 7:12: "So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets."
2. Adopt biblical Relational Commitments so that you can live out your convictions of biblical church government and mutual accountability without government interference.
3. Obtain informed consent to your Relational Commitments from both members and attenders. (When members and attenders have expressly consented to your policies and practices, it is extremely difficult for them to bring a lawsuit against you when you actually exercise those policies).
4. Use conciliation clauses in church documents and contracts; these legally enforceable clauses require that subsequent conflicts or lawsuits be resolved through biblical mediation or arbitration rather than civil litigation (see 1 Cor. 6:1-8).
5. Adopt and follow a carefully designed policy for screening youth workers and reporting suspected child abuse.
6. Use consent to counseling forms that inform counselees of your policies on confidentiality and church discipline, and create a binding commitment to resolve disputes within the church rather than a civil court.
7. Practice biblical accountability and church discipline.

As your church puts these and other related risk management steps into practice, you can secure three priceless benefits:

• You will prevent many conflicts by reducing the likelihood that people will be surprised, offended or harmed by a practice or activity of your church.
• You will reduce your church's exposure to legal liability by preventing major conflicts and threatening lawsuits from developing.
• You will protect your leaders from being intimidated by the threat of being sued as they carry out their God-given responsibilities to shepherd their flocks.

Implementing this strategy will take a significant investment of time and energy. What many churches fail to realize, however, is that they are already investing heavily in the conflicts that plague their personal, family, and congregational lives.

The Peacemaker Church strategy calls for a shift in investments. By devoting time and energy to teaching your people to be peacemakers, your church can prevent hundreds of hours from being squandered on conflict. In the long run, the relationships and time you redeem can be devoted to extending Christ's kingdom.

Key links

• Relational Commitments
• Informed Consent 
• Conciliation Clauses
• Policy for Screening Youth Workers
• Consent to Counseling Form
• Biblical Accountability and Discipline 

Please note the Limitation of Legal Discussion.