Dilemma on public benefit

Hearing a wide range of expert views might pose problems for the charity tribunal

Charity Tribunal
Charity Tribunal

The charity tribunal, which until recently has been under-used, has suddenly found itself responsible for interpreting the most contentious area of charity law: the question of public benefit.

In two landmark legal cases to be heard this year, it will have to set out how the much-debated term, which was written into the Charities Act 2006 without a definition, should be applied in practice.

The first case, to be heard by the Upper Tribunal later this month, will ask what steps fee-charging schools must take in order to prove they provide such a benefit.

The second, expected to be heard later in the year, will ask whether charities provide a public benefit if they exist to relieve poverty only among a small group of people, such as the employees of a certain firm or industry.

Given that both cases will set major precedents for the interpretation of charity law, it is unsurprising that many charities and umbrella bodies want to play a part in them. In order to allow this, the tribunal has set out a system in which charities can be joined as parties to the cases, a role that allows them to provide evidence that the tribunal must consider when coming to a verdict.

But doing so has left the tribunal, which has never held a hearing of this type before, with a dilemma: how can it allow charities' voices to be heard without getting bogged down in detail or giving undue prominence to some charities over others?

The tribunal's dilemma seems to be particularly acute in the poverty case. Unlike in the schools case, in which the Charity Commission and the Independent Schools Council will take opposite sides, there is no obvious pair of adversaries.

Both the Charity Commission and the Attorney-General, Dominic Grieve, who has referred the case to the tribunal, are simply asking the tribunal to determine how the rules on public benefit should apply.

It seems that neither will take a stance during the hearing, although some lawyers have suggested the commission might argue that employee benevolent funds do not provide a public benefit.

The result is that 39 benevolent charities, which fear the case could cause them to lose their charitable status, have applied to be joined as parties to the case so that they can defend themselves.

The tribunal must now decide which of them it will permit to become parties to the case and whether it will allow them to provide oral or only written evidence. As one lawyer points out, a refusal to allow the charities to give oral evidence might make the logistics of the hearing easier, but it could also strengthen the charities' hand if the final verdict goes against them and they decide to refer it to the Court of Appeal.

The tribunal seems to have less of a dilemma in the schools case, largely because the presence of an appellant and a defendant allows charities to play what looks like a more objective role as third parties. The National Council for Voluntary Organisations has chosen to do this, submitting evidence that says its view "fundamentally differs" from the ISC's stance, but maintaining it has not taken the Charity Commission's side either.

Giving a platform to third party interveners could lend more credibility to the tribunal, by allowing it to consider a broader range of views. It could, however, muddy the waters if the neutral party's views are seen to have furthered the argument of one side.

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