Attorney General refers Charity Commission's public benefit guidance to the courts

Reference says the matter should be settled by "a senior court of record"

High Court
High Court

The Attorney General, Dominic Grieve, has asked the charity tribunal to clarify how charity law should operate in relation to fee-charging independent schools.

The move has been prompted by the long-standing dissatisfaction of the Independent Schools Council about the Charity Commission's guidance on public benefit, which it says is a misinterpretation of the law.

The ISC declared itself "delighted" by the news. Specialist charity lawyers welcomed the prospect of clarification of a contentious area of the law and predicted that the case would cover public benefit generally, not just its application to fee-charging schools.

"We think it will be a good thing for all involved," said one.

The ISC has argued that the guidance on how fee-charging schools can demonstrate that they provide public benefit, as required by the Charities Act 2006, lays too much emphasis on the provision of bursaries and specifically educational benefits.

It made an application for judicial review to the Administrative Court earlier this year, asking for the guidance, or part of it, to be quashed or declared unlawful. A first hearing is expected early next month.

But the Attorney General has decided to use his power to refer the matter to the tribunal on the grounds that the outcome of the judicial review "is necessarily in negative form and in general rather than specific terms.

"Whether the public benefit requirement is satisfied or a charity is acting in accordance with its constitution generally is case-specific, and the judicial review proceedings may not lead to a resolution of those issues."

The Attorney General is asking the tribunal to request the transfer of the case to the Upper Tribunal (Tax and Chancery), where it will be considered by senior judges with experience of charity law, sitting with Alison McKenna, principal judge of the charity tribunal.

An application is also being made for the Administrative Court to transfer the judicial review to the same Upper Tribunal so the two cases can be heard together.

The Attorney General's reference says it should be transferred to the Upper Tribunal  because it "raises complex issues of general public importance, which are likely to require a significant amount of judicial time. It is desirable that the reference be determined by a superior court of record."

The main parties to the proceedings will be the Charity Commission and the ISC, but other organisations, such as the National Council for Voluntary Organisations and the Campaign for State Education, might also become parties.

David Lyscom, chief executive of the ISC, said he was delighted. "This supports our position that there are complex issues of law around public benefit and that interpretation of the law by the Charity Commission, including its guidance, needs to be examined in the courts," he said.

"The entire sector continues to be at the whim of the commission’s prevailing and subjective view as to what public benefit means, and what is ‘sufficient’ for a school to pass the public benefit test.

"The verdicts of the commission in the cases of the five independent school they reviewed, and the two where action plans were required, have done little to clarify the position or reduce the uncertainties."

A spokeswoman for the commission welcomed the reference as the most appropriate way to clarify the law. She said: "We set out our legal reasoning clearly and carefully alongside our guidance.

"We stand by our approach and the legal analysis which underpins it, and we are confident that the commission has acted reasonably and followed due process."  

Tom Murdoch, a solictor at charity specialist Stone King, said the commission was often unfairly criticised for operating a politicised public benefit assessment.

"Although the question referred to the tribunal is narrow in principle - restricted to public benefit assessments as applied to fee-charging schools - the tribunal will necessarily have to consider the public benefit test as a whole," he said. 

"Armed with the court’s decision, the commission will in future be able to operate a legally tested assessment framework that is immune from criticism that it is politically motivated."


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