The advocacy group Cage has withdrawn its judicial review of the Charity Commission's actions over the Joseph Rowntree Charitable Trust after the commission acknowledged in the High Court yesterday that it had no power to forbid charities to fund organisations in the future.
Cage had sought the review after the commission wrote to charities that had previously funded Cage, including the JRCT, seeking "unequivocal assurances" that they would not offer further funding either now or in the future. The JRCT gave the assurances after what it called "extreme regulatory pressure".
The commission’s actions came after comments were made at a press conference by Asim Qureshi, the director of Cage, in February, revealing the group had interacted with the British-born Isis militant Mohammed Emwazi and saying he had been a "beautiful young man". Emwazi, known as "Jihadi John", is believed to to have beheaded several hostages.
In yesterday's hearing before the Lord Chief Justice, Lord Thomas, and Mr Justice Ouseley, counsel for Cage and the JRCT, which was represented as an interested party, argued that the commission did not have the power to demand assurances that would fetter the discretion of charity trustees in the future.
The commission, however, contended that it had sought the assurances under its duties in the Charities Act 2011 to give advice and guidance and increase public trust and confidence in charities, and that the JRCT could have disregarded its advice.
In exchanges with counsel, both judges questioned why the exchanges between the commission and the JRCT had been conducted under such tight deadlines, expressed surprise that so much time and public and charitable money had been expended on the dispute, and contended that there was not much distance between the parties.
They urged the parties to come an agreement and, after negotiations outside the court, a statement by the commission was drawn up on the basis of which the action was withdrawn.
The statement said: "Trustees must be free to exercise their fiduciary powers and duties in light of the circumstances that exist at the time, if acting properly within their objects and powers and in the best interests of the charity.
"The commission does not seek to fetter charities' exercise of discretion whether to fund the charitable activities of Cage for all time, irrespective of current circumstances.
"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 the JRCT to fetter the proper and lawful exercise of their discretion in the future."
After the case, Cage said the Charity Commission had been forced to climb down from an attempt to prohibit charities from funding it. "Cage is grateful for the wide-ranging support it has received," it said in a statement. "This is an important vindication of our position.
"We know this will come as a relief to the whole charity sector and the attempt to interfere with the lawful activities of civil society has been blocked."
A JRCT spokeswoman welcomed the commission’s clarification in its statement that it could not direct charities unless it was conducting a statutory inquiry or ask funding bodies to bind their future discretion.
"These are important principles that underpin the ability of charities to make their own decisions within the law to work on difficult issues and respond to changing need," she said.
A Charity Commission spokeswoman welcomed the withdrawal of the review and said that the case had always been about defending the commission’s responsibility for protecting the public trust and confidence in charity: "It was on that basis that we sought assurances from trustees about the funding of Cage."
She said it had always been clear trustees had the right to exercise their discretion when acting in the best interests of their charity, subject to "appropriate supervision" by the commission. She added: "We regret that this judicial process has dragged out, consuming charitable and public funds."