Legal Update: Law Commission's charity law reform project moves forward

Plus: A tougher approach on conflicts of interest, new developments for charities in Northern Ireland and Scotland and the Charity Commission website has moved, writes Adrian Pashley

Legal update
Legal update

Charity Law Reform

At the Charity Law Association's annual conference, which was held in London in October, Elizabeth Cooke, a commissioner at the Law Commission, gave delegates an update on the commission's charity law reform project. After the publication in September of its final recommendations on the law relating to social investments, the Law Commission will discuss with government whether to include, in the remit of its wider review of charity law, a review of existing mechanisms for releasing restrictions on the expenditure of permanent endowment.

Cooke invited charity lawyers to submit questions on any of the issues under review, although she said the scope of the project could not be extended further. She said that the commission expected to consult on the next part of the project in February and report on its recommendations in summer 2016.

A tougher approach

Also at the CLA conference, Kenneth Dibble, director of legal services at the Charity Commission, warned that it was taking a more stringent approach to regulating breaches of duty arising from conflicts of interest. This, he said, was because unmanaged conflicts were at the heart of many of the regulatory issues the commission dealt with. He reminded practitioners that the duty of loyalty that trustees owed to their charity was absolute, and that it was not necessary for loss to be caused to a charity for a trustee to be in breach of duty.

Dibble's comments are in line with the vision outlined by Paula Sussex, the commission's new chief executive, of a more robust and proactive regulator that is tougher on charities that fail to comply with the law.

Elsewhere in the UK

Jenny Ebbage, a partner at the law firm Edwards & Co and leader of its charities and enterprise team, said that charities that operate in Northern Ireland but were established in other jurisdictions were not required to register with the Charity Commission for Northern Ireland. However, provisions were likely to be brought into force to require them to submit statements of their finances and activities in Northern Ireland to the CCNI.

Simon Mackintosh, head of charities at Turcan Connell, said plans for further devolution of taxation powers to the Scottish parliament could lead to difficulties in the administration of Gift Aid if a different rate of income tax were adopted in Scotland.

Regulator website moves

The Charity Commission's core guidance has been transferred to the central government website on Practitioners will be relieved that the commission's internal operational guidance for its staff can still be accessed through the microsite – and that the commission has confirmed that it will remain publicly available.

This column is written by Adrian Pashley, charities editor at Thomson Reuters, Practical Law, on behalf of the CLA

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