Eyewitness: A firm line from Lord Thomas

The country's most senior judge was eager to see the Charity Commission come to an agreement with its adversaries, reports Stephen Cook

Lord Thomas, the Lord Chief Justice

The Lord Chief Justice did not beat about the bush. "Why are we all here?" he demanded, cutting short the barristers. "What is this dispute actually about?" It was an arresting start to proceedings that by the end of the day yielded the nearest thing charity governance probably gets to courtroom drama.

Lord Thomas, sitting with Mr Justice Ouseley, was conducting the judicial review of the actions of the Charity Commission in relation to the funding of the advocacy group Cage by the Joseph Rowntree Charitable Trust. The commission had required, and received, an undertaking that the charity would not fund Cage in the future, and Cage and the JRCT were contending that this was beyond its powers.

But the Lord Chief Justice noted that the commission was now saying it had only issued advice and guidance rather than a requirement or direction, and his view was that there was therefore precious little difference between the parties, even though they had "got across each other". Was this really a matter for judicial review in the High Court?

The parties clearly thought it was. David Gottlieb, for Cage, wanted a determination of  whether the commission’s dealings with the JRCT were indeed merely advice, or were in fact a direction that the commission had no power in law to issue.

Helen Mountfield QC, for the JRCT, added that even if the commission’s communications were only advice, they were faulty because they advised the trustees of the charity to do something unlawful – to fetter their own discretion in their future actions. Lord Thomas weakened. "OK, get on with it," he said, glancing at the clock.

Examination followed of unclear and changing language in exchanges, under commission-imposed deadlines, between it and the JRCT. This prompted Lord Thomas to remark at one point that "this is what happens when people act under ludicrous time limits", and at another that the semantics were "worthy of the Chancery Division several centuries ago".

By lunchtime the judges were pointing out that, no matter what the emails between the parties had said, the commission’s press release of 6 March was clear, stating that it had "required unequivocal assurances" that the JRCT had "ceased funding Cage and had no intention of doing so in future". And they suggested the parties should have discussions over the break.

After lunch, negotiations continued in whispering huddles beneath the oak panels and clerestory windows of the Lord Chief Justice’s grand courtroom. Notes were scribbled and passed to and fro. Wigs were pushed back on heated heads. Ten minutes turned into 20, then 45.

By the time the judges returned, Julian Milford, for the commission, had a statement, agreed with Cage, that did not go into the details of what had occurred but stated in general terms that trustees must be free to exercise their fiduciary duty and the commission did not seek to fetter the discretion of trustees.

But Mountfield jibbed: the JRCT was not prepared to go along with this. "We need to know that what was expressed as binding was not a direction," she said. "There is a wider public interest in knowing what the word 'required' meant." Further debate ensued, and the judges’ intense questioning of Milford at this point suggested things were not going his way. Eventually they suggested  to him how the agreed statement could be modified to satisfy the JRCT.

There followed a further break after which an extra paragraph was added to the statement saying "the commission recognises that it has no power to require trustees to fetter the future exercise of their fiduciary duties under its general power to give advice and guidance. In consequence, there is no obligation on the trustees of JRCT to fetter the proper and lawful exercise of their discretion in future."

On the basis of that, all parties agreed that the judicial review would be withdrawn and the judges were spared the task of reaching a conclusion on whether the commission had in fact attempted to do what the statement says it cannot do.

On another point, however, Lord Thomas was entirely clear: "Is this really the way to spend public and charitable money? The only lesson from this is that a lot more time should be spent talking rather than issuing ultimatums, especially when there are respectable organisations involved such as the Charity Commission and the JRCT."

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