The Charity Commission spent nearly £13,000 paying a barrister to defend it in a High Court judicial review of its actions against the Joseph Rowntree Charitable Trust last year, according to the commission’s response to questions from Third Sector under the Freedom of Information Act.
The commission has also calculated, according to a spokeswoman, that work on the case by its internal litigation team was worth £22,500 – 139 hours at an average rate of £162 a hour – which is the amount it would have claimed if it had been awarded costs in the court case.
The judicial review was brought by Cage, a group that advocates for what it calls "victims of the war on terror" and was funded by the JRCT in 2014. The commission had pressed the charity into an undertaking that it would never fund Cage again, and Cage questioned whether it had to power to do so.
The case, heard by the Lord Chief Justice, Lord Thomas, and Mr Justice Ouseley, was withdrawn after the commission conceded in an agreed statement that "there is no obligation on the trustees of JRCT to fetter the proper and lawful exercise of their discretion in future".
In the hearing Lord Thomas expressed incredulity that the case had come to court and criticised the expense. "Is this really a sensible way to be spending public and charitable money?" he asked.
The JRCT, which joined the case as an interested party and was represented by the London solicitors Bates Well Braithwaite and Helen Mountfield QC, declined to say how much it spent.
But one solicitor with knowledge of costs in comparable cases estimated that the legal bill for the JRCT would have been more than £50,000. Cage, which is not a charity and thus not subject to Lord Thomas’s criticism, did not respond to questions about its expense.
The affair blew up after Cage said a year ago that it had advised the Islamic State executioner, Mohammed Emwazi, and it emerged that the JRCT had funded Cage in the past.
Emails disclosed for the court case showed the Charity Commission chair, William Shawcross, and a board member, Orlando Fraser QC, pressing for the strongest measures against the JRCT. The charity gave its undertaking under what it called "extreme regulatory pressure".
Nick Perks, secretary of the JRCT, said the charity did not initiate the legal challenge itself, partly because of potential costs, but once the challenge was made by Cage it felt a responsibility to ensure the court had a complete picture of dealings between the commission and the charity.
"The Charity Commission’s actions towards the JRCT were a matter of concern for charities generally," he said. "While we did not choose to bring the judicial review, the court process did result in a formal settlement between the commission and other parties that confirmed important principles of freedom and discretion for all charities."
The commission's FoI response said the outside costs totalled £13,670.60, and the spokeswoman said £12,820 of this were legal costs. The commission employed Julian Milford, a member of the Treasury’s "A" list of counsel used by government departments.
A-list counsel are paid £120 an hour, according to the Attorney General’s office. This indicates that Milford spent more than 100 hours – nearly three weeks’ work at 36 hours a week – on the case.
During the hearing Lord Thomas criticised the commission for imposing "ludicrous time limits" when demanding an undertaking from the JRCT. The parties should have sat down and negotiated, he said: "I simply cannot understand why you cannot agree this.
"I do hope for the future that bodies with the reputation of the Charity Commission and the JRCT will be able to agree at a senior level these sort of things without the need for litigation."
The spokeswoman for the commission said: "We do not think there is anything we could have done differently from bringing the proceedings to a conclusion earlier. It would perhaps have been better if Cage had followed the usual route of sending us a pre-action letter, which would have given us the opportunity to try to narrow or resolve the issues before going to court."
The commission's funding has been reduced by 50 per cent to £21m over the past six years. It has reduced many services to charities in favour of online advice and is planning to supplement its budget by charging charities for regulation.