Keep it legal: The Charity Tribunal

A column from a lawyer about the new Charity Tribunal, which will be set up as part of the 2006 Charities Act, is bound to raise a few eyebrows: at first sight, schedule 4 of the Act - a list of "reviewable matters" that runs to 14 pages - looks like a lawyer's licence to print money.

However, it is a serious attempt to bring balance to legislation that otherwise bolsters the regulatory might of the Charity Commission.

Before the Act, charities had little with which to battle against this might: a charity could challenge a commission decision only in the High Court. The resource implications, both financial and human, are obvious.

In establishing the Charity Tribunal, the Government's aim was to provide a quick and easy way to appeal against commission decisions on matters such as whether an activity falls under one of the new "charitable purposes" in section 2 of the Act or a decision to start an inquiry into a charity's governance.

The list of decisions open to appeal is reasonably extensive, in part because of lobbying by lawyers. The Charity Law Association was particularly vocal during consultation in pushing for the remit of the tribunal to be widened, since the limitations in early drafts of the Bill would have made it practically useless. However, concerns about the efficacy of the tribunal linger because costs may still be a barrier to justice.

The tribunal will be able to order the commission to pay costs racked up by a charity in bringing an appeal, but there is no automatic right to a costs award. Even if the tribunal makes a costs order on grounds that the commission has acted "vexatiously, frivolously or unreasonably", charities will still need to bear costs up front. It should be noted that costs could be awarded against a charity if it acts in a similar manner.

Costs are likely to be substantial because the Government anticipates that most charities will require legal representation. At this stage, however, it is difficult to gauge the level of potential costs because the Lord Chancellor has yet to determine how the tribunal will work.

According to the Charities Act implementation plan, this will be done in early 2008. As with so much of the Charities Act, only time will tell whether the Charity Tribunal helps to level the regulatory playing field.

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