In its response to the consultation, called Law Commission Consultation on the Fiduciary Duties of Investment Intermediaries, which closed on 22 January, the ACF said that trustees’ investment duties must be treated alongside the commission’s separate project reviewing charity law.
The consultation document said that the "core duty of a trustee is to promote the purpose for which the trust was created", which the ACF has welcomed.
But it says in its submission that this has "been overlaid by case law and legislation", which instead gives priority to "protecting or growing capital", creating a dilemma for trustees.
The ACF response says that trustee discretion "must be preserved" and that "interpretations of the law of fiduciary duties which obscure that discretion and its primary purpose should be corrected".
A report with recommendations to government will be published by June, the Law Commission said.
The commission is also preparing to publish a consultation paper on mixed-purpose social investment by charities in April. It will then return to other aspects of the wider project on charity law it began last spring. This is likely to include discussion of the role and the powers of both the Charity Commission and the charity tribunal.
The ACF says in its response that there is a need for "coherence across the legal and regulatory framework", including the Charity Commission’s CC14 guidance, the Statement of Recommended Practice and the law relating to mixed-motive investments.