The High Court has given leave for a judicial review of the actions of the Charity Commission in obtaining an undertaking from the Joseph Rowntree Charitable Trust that it would never again fund the advocacy group Cage.
The application was granted by Lord Justice Burnett. The JRTC was represented in court as an "interested party". The parties have until mid-September to submit any further evidence. The case will be heard later in the year in the Divisional Court.
Cage, which is not a charity, argued that the regulator "exerted unlawful pressure" earlier this year when it sought assurance from the JRCT and another grant-making charity, the Roddick Foundation, that they would never fund it again.
The Charity Commission's counsel, Julian Milford, argued that the regulator had not exceeded its powers and the statement made to the JRCT with respect to Cage was not legally binding.
The judge said the court was prepared to give permission for the review on the grounds that the commission might have acted outside its powers. He noted the point made by Cage and JRCT that even if the commission had the power to do what it did, it might not have exercised its power in a rational manner. He said the contention that the commission violated Cage's freedom of expression and did not give Cage prior notice was "unarguable".
Dr Adnan Siddiqui, director of Cage, said: "We are pleased by the decision. The Charity Commission's actions against Cage have sent a chill through the charity sector, and this is a welcome step."
A Charity Commission spokeswoman said the regulator remained of the view that its actions had been responsible with respect to Cage and the JRCT.