Points of law: Just what is an action plan?

It is untested whether the charity tribunal can consider appeals against such plans from the Charity Commission

Charity tribunal
Charity tribunal

When the charity tribunal was set up by the 2006 Charities Act, some lawyers argued it should be a forum to review any complaint about the Charity Commission's actions. Ministers decided that its role should be more narrow, limited to considering challenges to the use of certain specified powers only.

A complex framework was set up, detailing which actions by the commission could be appealed to the tribunal. This has meant that four of the 13 appeals lodged with the tribunal have been struck out because they were outside its jurisdiction.

One element of the tribunal's powers remains particularly unclear: can a charity use the tribunal to challenge the terms of an 'action plan' given to it by the commission as a result of an investigation? Action plans - now issued more frequently by the commission as it reduces the use of its statutory powers and increases its use of informal advice and guidance - ask charities to make governance changes, but do not have legal force.

The issue of action plans was brought to the fore during the commission's investigation into African Aids Action. The charity's chair, Eyob Ghebre-Sellassie, disagreed with the terms of the action plan issued by the commission after a statutory inquiry. He was given leave to appeal to the Upper Tribunal to clarify whether he could appeal against the action plan, but decided not to pursue this.

Nicola Evans, a senior associate at law firm Bircham Dyson Bell, says confusion has arisen because many charities are unsure whether adhering to an action plan is voluntary or compulsory. "The commission has produced documents that charities don't understand," she says. "If an action plan obliges trustees to take action, it should be subject to appeal. But if they're not obliged, it's not a decision, so it doesn't need to be appealable."

The issue has wide-ranging implications, she claims, because action plans were issued to the independent schools that failed the commission's public benefit tests. "The language in the public benefit reports implied that if the trustees didn't take action the commission would strike them off the register," she says.

Rosamund McCarthy, a partner at law firm Bates Wells & Braithwaite, says: "Usually, if a charity disagrees with part of an action plan, it can negotiate with the commission and alter it. But there might be circumstances in which an agreement can't be reached: in that case, the charity should be able to appeal against it.

"Having the power to appeal hanging over them might also make the commission take more care in negotiating action plans."

A commission spokeswoman says that if a charity chooses not to implement an action plan, the commission can take this into account when deciding whether to take further action against the charity. "Action plans are not legal orders or directions and cannot be appealed to the tribunal," she says.

The issue may well be resolved during the forthcoming court hearings on the commission's public benefit guidance for independent schools. The schools that failed the commission's round of public benefit tests were given action plans to change the way they operated, and they are likely to seek clarification on the legal basis of these plans from the court.

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