Charities denied Icelandic savings compensation await lawyers' verdict

Save our Savings coalition is seeking advice about asking for judicial review of the Government's decision

The 30 charities that lost £50m in the collapse of Icelandic banks might have to wait more than a month to decide whether to take legal action against the Government for refusing them compensation.

When the Treasury ruled against compensation last week, Peter Hepburn, chief executive of Cats Protection and co-chairman of the Save Our Savings coalition, said charities were "absolutely furious" and would instigate a judicial review.

But he now says the coalition, which has spent £18,000 so far trying to retrieve its investments, must wait for legal advice, which could take several weeks.

"We have to seek legal advice because the law is complicated," he said. "But the initial indications are that there is a high chance of success."

The Treasury ignored calls from its own select committee to refund the charities. The select committee said it was imperative the charities be compensated.

Hepburn said the Treasury's decision to ignore this and rule against the charities could open it up to the charge that it was not showing fairness and consistency to voluntary organisations, particularly given that strategic health authority NHS North West awarded £6.5m to Manchester charity Christie's to cover its Icelandic banking losses.

Selman Ansari, a barrister at charity law specialists Bates Wells & Braithwaite, said: "SOS have got a good moral case, which is always helpful when considering whether the government has exceeded its discretion. It is a fight worth fighting, but it will be an uphill battle to persuade a judge to tell the Government to spend money in a particular way.

"It is likely to be expensive, but the amount of money they stand to gain is huge."

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