Law Commission attempts to bring clarity to tribunal issues

The commission has published a 300-page consultation document. Sam Burne James reports

Law Commission
Law Commission

The Law Commission, the non-departmental public body that reviews legislation, has published Technical Issues in Charity Law, a 300-page consultation document covering a range of issues, including amending charitable objects, land transfer and charities incorporated by royal charter. In a previous, fast-tracked part of the commission's charity law project, it had proposed that government give charity trustees a statutory power to make social investments.

The Charity Law Association has welcomed the proposals and convened a working group to respond, while Lord Hodgson of Astley Abbotts has said he is pleased that the consultation adopts recommendations made in his review of the Charities Act 2006.

One area examined by Hodgson was the charity tribunal appeal process. If the commission decides an appeal was brought improperly, it can hold the trustees personally liable for the costs incurred. Trustees can protect themselves by applying to the High Court for a so-called Beddoe order, a potentially complex process, or seek permission from the Charity Commission. The latter is a potential conflict of interest for the commission, because essentially it is being asked to give the thumbs-up to being sued. Hodgson's review did not mention Beddoe orders specifically, but it said this could be resolved by giving "a clear power for the tribunal to authorise expenditure". Alison McKenna, principal judge of the tribunal, had previously argued for Beddoe-making powers, and the Law Commission has now taken up this proposal.

Another issue that the Law Commission tackles is tribunal appeals by third parties, such as a charity's beneficiaries, citing a 2013 journal article in which McKenna wrote that the tribunal needed "clarity as to whether third-party appeal rights are intended to be meaningful and effective", and new powers to address this question.

Part of the difficulty is that a commission decision might be acted on before a tribunal appeal on the matter can make progress, rendering the tribunal outcome academic. This weakness was exposed in the 2012 Lytham Schools case, in which the tribunal heard an appeal from parents and pupils of one of two schools that the Charity Commission had said could merge. The merger process was well advanced before the tribunal could rule that changes be made to the merger scheme. The Law Commission says it is not clear whether allowing orders to be suspended pending appeals would provide a proportionate solution, but says it is open to respondents' views. The consultation closes on 3 July.

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