Law Commission likely to review powers of Charity Commission and tribunal

Professor Elizabeth Cooke says the review will probably look at a number of technical and procedural issues, not the meaning of charity

Elizabeth Cooke
Elizabeth Cooke

The Law Commission expects to review some of the powers of the Charity Commission and the charity tribunal as part of its review of charity law.

Its document Selected Issues in Charity Law outlines the areas it expects to examine during the review, which began in March and is expected to run until March next year.

Professor Elizabeth Cooke, the commissioner in charge of the charity law project, said she expected the issues outlined in the document to become the project’s final terms of reference, but said they were subject to confirmation by the law commissioners and the government.

According to the document, the review is expected to examine five issues highlighted by Lord Hodgson’s review of the Charities Act 2006, including whether some of the Charity Commission’s powers should be reformed.

These could include whether the Charity Commission should be able to require an organisation to change its name before registration, which it is currently able to do only after it has joined the register of charities. It might also consider the possibility of reforming the grounds on which charity trustees can be suspended or removed by the regulator and the circumstances in which a person can be disqualified from being a charity trustee.

The review is also expected to look at whether the charity tribunal should have additional powers, including the ability to suspend Charity Commission decisions or schemes while the tribunal is considering a case.

The paper says the review is expected to cover charity insolvency law, charity mergers and incorporations and charitable corporations established by royal charter.

The Law Commission is also expected to consider a number of areas in which charity trustees could have more autonomy. These include the disposal of and creation of charges relating to charity land and the making from charity funds of ex-gratia payments – payments that are not allowed by a charity’s governing document and are not strictly in the best interests of the charity.

Cooke said the review would not look into questions that were fundamental to the meaning of charity, such as public benefit. "These are narrow technical and procedural issues," she said.

The Law Commission is also discussing with the Cabinet Office whether the review should include issues relating to social investment by charity trustees, said Cooke.

Jo Coleman, a partner at IBB solicitors, said one of the most helpful changes that could be made as a result of the review was the partial relaxation of the rules relating to charity land.

"Trustees are best placed to decide how to fulfil their obligations in light of their particular circumstances," she said. "This is a view endorsed by the tribunal and the Charity Commission, and providing charities with greater autonomy in the way in which they sell land and enter into mortgages would be a sensible next step."

A spokeswoman for the Charity Commission said the regulator welcomed the opportunity to contribute to the possibility of changing some of its powers.

"All of the areas set out in the Law Commission document have a bearing on our work and we are pleased that they have been included," she said.

"On the tribunal, we have noted a range of comments and proposals made recently on its powers and operation, and agree that the charity law project offers a timely opportunity for review."

If the project proceeds to a final report with a draft bill, the Law Commission expects this to be published in March 2016.

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