Self-regulatory organizations: legal entities on the edge of private and public law

Filatova-Bilous nataliia

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ORCID ID https://orcid.org/0000-0003-4243-3990

Published:

DOI: https://doi.org/10.69724/2786-8834-2024-2-2-58-82

Keywords: self-regulatory organisations, public authority, legal entities, compulsory membership, subject matter jurisdiction

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Журнал. 2-й випуск. Облкадинка

Abstract

The article analyses the legal status of self-regulatory organisations (SROs). These organisations are formed among the actors of various types of professional and business activity (lawyers, doctors, auditors, accountants, etc.), but the notion ’self-regulatory organization’ has started to be used in legislation only recently. The main function of these organisations is to carry out self- regulation, i.e. to regulate the activity of their own members by adopting rules of conduct and monitoring compliance with them.

However, these organisations often acquire regulatory powers not only from their members, who voluntarily agree to be subject to their regulation, but also from the state, which delegates to them or recognizes their public regulatory powers. This creates a kind of paradox: on the one hand, SROs are established in a manner typical of private law entities. However, on the other hand, their activities acquire the features of administrative activity.

This raises a number of issues in law enforcement practice. Firstly, there are difficulties with the type of legal regulation that should be applied to the activities of these organisations – general permissive or special permissive. Secondly, the issue of court jurisdiction is ambiguous as well, i.e. which courts (administrative or commercial) have competence to resolve disputes arising between self-regulatory organisations and their members. Thirdly, the issue of compulsory membership in self-regulatory organisations is also quite acute, as this may lead to a violation of the right to freedom of association. Finally, the question of whether SROs are liable in the event of damage caused by them when exercising public authority is also ambiguous. There is a question concerning the conditions of their liability: shoud these be general conditions (Articles 1166–1167 of the Civil Code of Ukraine) or special conditions according to the rule of ’truncated’ composition, which is typical for the liability of public authorities (Article 1173 of the Civil Code of Ukraine).

This article provides a detailed analysis of these and other issues and outlines the ways to resolve them.

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