The Charity Commission has said it is worried about the potential impact of unforeseen legal costs on its budget after it was ordered to pay at least £50,000 of Catholic Care's legal costs following the charity's successful High Court action.
Catholic Care wants to exploit a clause in the Equality Act (Sexual Orientation) Regulations 2007 so it can exclude homosexual parents from using its adoption service. The matter has now been referred back to the commission for further consideration.
A spokeswoman for the commission said it was the High Court's usual practice to award costs to the winners. She said the final amount of costs had not yet been agreed but the commission had been ordered to pay an initial £50,000 within 14 days.
She said paying the costs of a successful challenge was a risk that the commission ran when defending cases in the court or tribunal.
"The careful management of its exposure to costs is part of the commission's consideration of how it approaches its response to any legal challenge," she added. "The last time the commission was ordered to pay costs was in relation to a court hearing in the late 1990s."
However, Andrew Hind, chief executive of the commission, said at an open board meeting in London yesterday that the increased risk of exposure to costs since the establishment of the charity tribunal was a worry for the regulator.
"We mustn't be forced into a position where we are deciding on legal issues on cost grounds, contrary to what we believe to be the principles," he said.
Nick Allaway, director of charity information and corporate services at the commission, said the Treasury allowed departments to claim extra funds where they could demonstrate that they had incurred unforeseen extra costs.
But Hind was sceptical that a small department such as the commission would be able to make a successful claim.
Theo Sowa, a commission board member, suggested that during negotiations for the next spending round, the commission should point out that the Charities Act 2006, which established the charity tribunal, had exposed the commission to an increased risk of legal challenges.
"We need to prepare the Government for us coming back for more," she said.