Charity review is a review too far

Hubert Picarda QC says that rather than wasting money on consulting “Joe Public', the Charity Commission should ensure that their plans are legally sound

The Charity Commission's review of the Charities Register has provoked loud protests in legal circles and a preliminary paper has been criticised by the Charity Law Association. The commissioners have now issued a consultation document setting out a consultation period from 28 April to 30 September.

As someone who commented on the preliminary paper, I feel not merely disquieted but also frustrated. The disquiet flows from the context in which the review is taking place; the frustration from the way in which the commissioners are pursuing the review heedless of the criticisms which their proposals have attracted.

Until now the commissioners have, in the main, confined themselves to registering obvious charities, to indicating new areas of endeavour which they are prepared to accept as charitable, and to removing charities which have ceased to exist or do not operate.

The commissioners say the purpose of the review is to consider whether those organisations which currently benefit from charitable status should continue to do so. They also seek by consultation processes, including opinion polls, to identify any common public understanding, particularly on issues of public benefit.

But it is doubtful whether the commissioners are either empowered or equipped to carry out this wide-ranging and expensive exercise. Moreover, the overall cost of the exercise and its effect on the ability of the commission to get on with its other important work are matters of considerable concern to the taxpayer and to those practising in the field of charity law.

The commissioners have the power and the duty to remove any institution which no longer appears to be a charity. But this seems to be confined, where it is a matter of the commissioners' own initiative, to cases where an objection is raised about a change in the purposes or trusts of the institution or where there is an objection by a person affected by the registration who applies for it to be removed.

The Inland Revenue would in many cases be the appropriate party to initiate such a procedure. In any case, where objections are raised by an interested party and these fail, the charity in question should have the opportunity to recover from the objector the cost of fighting the challenge.

If the commissioners are to treat themselves as entitled to challenge a registration on the grounds of some change in social circumstances rather than of purposes, they become judges in their own cause.

A situation in which the commission is prosecutor and judge cannot be satisfactory, particularly if “policy” is preferred to law. And since the charity in question has to go to court on appeal to overturn any decision resulting in deregistration or removal from the register, that charity, if ultimately successful, should be able to recover its costs from the objector.

The review exercise is being conducted at a time when many experienced lawyers have left the commission. Indeed, lawyers outside the commission working in charity law are finding it difficult to get their cases considered promptly and effectively.

Only two of the commission's five board members are lawyers. One of the two is the Legal Commissioner, who has considerable experience in the practice of charity law, and the other, a part-time commissioner, is a distinguished academic lawyer and editor of a leading treatise on charity law.

But two out of five is not enough. A decision to overturn a registration is judicial in nature and ought to be made only in clear cases where there has been a proper hearing, with the objector liable to pay the costs if the attack fails.

With no disrespect to the commissioners, these matters should be dealt with by a tribunal of lawyers with appropriate legal qualifications. The constitution of the commission should be changed to provide for such a tribunal and appropriate procedures.

The suggestion that consultation processes are necessary to establish the principles that underpin charity law is bizarre. The law has already been declared in a myriad of cases.

Consultation with “Joe Public”, while possibly concordant with a “touchy-feely” approach to government, is an inappropriate way of deciding what is in the public interest. Judges act on evidence, usually expert evidence, on the educational benefit of an educational object said to be charitable. This approach is sound wherever public benefit is put in issue.

There should be no room for evidence gained through canvassing for opinions, especially where it is collected by unreliable opinion polls. Decisions on charitable status must be determined on legally relevant evidence and well-established principle and not on unclear criteria or popular soundings.

The criterion of social value introduced by the framework document issued by the Charity Commission is not, as those who drew it up seem to think, a panacea. It is more like the winds in Pandora's box. The word “social”, especially when joined with words like “justice”, “welfare” and the like, is notoriously vague.

Nowhere is there any indication of the estimated cost of what the commissioners concede is a considerable exercise. The cost of carrying out the consultations and other research involved in the full-scale consideration of all the matters referred to in the framework document are not limited to the direct cost of man hours, publishing and other expenses. And there is every reason to suspect that the cost is huge.

There is also the indirect cost to charity in two key areas. First, there is the inevitable distraction of staff at the commission from their everyday responsibilities.

Every time there is a delay by the commission – about which there are continuing complaints – the practitioner is entitled to ask to what extent the delay is attributable to the money and the man and woman power being devoted to the review.

Second, some individual charities are being subjected to prolonged inquisition by the commissioners. Let us assume that these charities are able to repel the attack made on their charitable status but have used their charitable funds to defend themselves. What comfort is success when it is paid for by funds which could otherwise have been used to further their charitable objects?