Legal Update: Upper Tribunal rules against Jewish charity

Adrian Pashley provides an overview of recent developments in voluntary sector law, on behalf of the Charity Law Association

Legal Update
Legal Update

Regentford decision

The Upper Tribunal (Tax and Chancery Chamber) has upheld a decision of the First-tier Tribunal (Charity) that dismissed an appeal by the orthodox Jewish charity Regentford Ltd against the Charity Commission's decision to open a statutory inquiry into its affairs.

The Upper Tribunal concluded that the commission's decision was reasonable. Furthermore, the Upper Tribunal concluded that the First-tier Tribunal had been correct to dismiss Regentford's application.

The decision provides helpful clarification on the threshold that the commission must meet before it makes a decision to open a statutory inquiry and on the approach that the tribunal should take when reviewing such a decision. (Regentford Limited v Charity Commission for England and Wales and another (2014) UKUT 0364 (TCC).)

Appeals against commission

It is hoped that the Upper Tribunal will provide binding authority on the correct approach to the statutory test for deciding whether a person is, or may be, affected by a decision of the commission and can therefore bring an appeal. This arose when members of the campaign group Stop the JNF were granted permission by the charity tribunal to appeal the ruling that they did not have standing to appeal against a Charity Commission decision not to deregister three charities they opposed. (Nicholson and others v Charity Commission for England and Wales.)

Recent commission activity

The commission has published reports on its statutory inquiry into White Horse Stables – Horse Rescue and its operational compliance work with the Creed Street Theatre & Arts Centre Trust and the Schools of King Edward VI, Birmingham. The White Horse report says there was evidence of mismanagement by trustees, including repeated failure to submit annual accounts to the commission. They also allowed conflicts of interest, arising from the relationship between two trustees and from financial arrangements between the charity and a connected company, to go unmanaged.

The Creed Street report shows how the commission cannot usually get involved in disputes arising from charity trustee decisions that are unpopular with members, supporters or beneficiaries. The commission expects charity trustees to seek to resolve such disputes by following high standards of governance and communication. The King Edward VI report shows how the regulator can engage constructively with charity trustees who report a serious incident to help them manage risk. It highlights the need for charities not only to have policies in place, but also for them to work in practice.

Serious incidents reminder

The commission has issued an alert to remind charities of their duty to report actual or suspected serious incidents to it. The alert says the commission might treat failure to do so as mismanagement.

This column is written by Adrian Pashley, charities editor at Thomson Reuters, Practical Law, on behalf of the CLA

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