Regulator has no plans to introduce charges for its services or fines for late filers, interim chair says

Ian Karet was responding to questions at the Charity Law Association's annual conference

Ian Karet
Ian Karet

The Charity Commission has no plans to introduce charges for its services or fine charities that persistently file late accounts, its interim chair has said.

Ian Karet was speaking today at the Charity Law Association’s 27th annual conference, which was being held online this year.

Karet struck a markedly different tone to his predecessor, Baroness Stowell, as he stressed the importance of the CLA’s relationship with the commission “even if there is not always complete agreement”.

Last year, Stowell delivered a more combative speech and was accused by solicitors of appearing to question the “ulterior motives” of “lefty lawyers”.

But Karet began by discussing the impact of the pandemic on the sector after a brief walk down his own career path, which began with him studying chemistry at university before moving into intellectual property after he realised the science wasn’t for him.

He thanked the charity law community for its engagement with the Charities Bill and hoped for its “smooth passage through Parliament”.

Stowell did not take any questions after her speech last year, but Karet was happy to take queries.

In response to a question about whether the commission had abandoned plans to introduce charges for its services, Karet said he could not say for certain the idea had been scrapped, but described it as a “political decision” that had more traction under both of his predecessors.

He was also asked: “Would it promote better governance and help the commission's regulatory roll-out to be able to fine charities who persistently file late accounts, rather than having to use inquiry powers?”

But the chair’s “gut response” was that he did not think there would be support for that sort of system, because taking money out of the sector in that way is “not, to my mind, going to go down well with the public”.

The regulator has previously spent years pushing for a consultation on charging charities, having suffered serious budget cuts since 2010 and a big increase in demand for its services.

Stowell said in 2018 that "sector charging is something that does remain very much on the table".

But in 2019, Helen Stephenson, chief executive of the regulator, said a consultation on the measure was "not something that is on the agenda at the moment" because the government was too preoccupied with other activities such as agreeing a Brexit deal.

Any move to introduce compulsory charging for the commission’s services would require parliamentary approval.

On the subject of dispute resolution, Karet said he expected the pandemic to “act as a catalyst for changes to our system”.

He said: “More work is needed in order to determine the types of claim and the situations in which compulsory alternative dispute resolution would be appropriate and most effective for all concerned, both in the present system and in relation to online justice.”

With the pandemic forcing many hearings online, Karet said he expected “online justice” was here to stay and “more court disputes will be started and carried out online”.

He referred to a speech by the Master of the Rolls, Geoffrey Vos, whose “radical future” for the judiciary would mean “the vast bulk of civil disputes go through a streamlined online dispute resolution process”.

This, according to Karet, would allow disputes to be resolved more quickly, even if there were still face-to face hearings in the most complex cases.

Karet said these points were relevant for the sector as “disputes among trustees or ex-trustees often seem to be personal and bitter”.

He said: “The commission is seeing more of them. It would also be a sign of good governance for trustees to be able to resolve differences early and with less heat. Offering to help trustees is an opportunity for lawyers.

“A move to faster, lower-cost disputes should allow trustees, in the MR’s words, to spend more time concentrating on beneficiaries, and avoid or reduce unnecessary expenditure and risk to charitable assets.”

- This story was updated on 11 October to clarify the reference to Baroness Stowell's speech at last year's event

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