24 March 2015

Law Commission charity law consultation


Alison Paines
Partner | UK

The Law Commission has published a consultation paper on specific legal matters relating to charities. Included, among other matters, are charity mergers and incorporations; insolvency; the powers of the Charity Commission and the Charity Tribunal; dispositions of charity land; the cy-près principle; ex-gratia payments; and the amendment of Royal Charters.

In July 2011, the Law Commission published its ‘11th Programme of Law Reform', which identified certain aspects of charity law for review and gave priority to those areas which were thought to create uncertainty or involve a disproportionate regulatory or administrative burden. Following Lord Hodgson's review of the Charities Act 2006 in 2012, the Law Commission then agreed the matters on which it would focus in terms of reference with the Cabinet Office and the Charity Commission.

On 20 March 2015, the Law Commission published a consultation paper on its proposals. The matters covered are relevant to a wide range of charities, and include:

  • the amendment of the governing documents of charities governed by Royal Charter or by Act of Parliament;
  • the procedures by which charities change their purposes and the administrative provisions of their governing documents;
  • the application of the cy-près principle;
  • disposition of charity land;
  • a charity trustee's remuneration for supplying goods to her charity;
  • awarding an equitable allowance from a charity trustee's unauthorised profit;
  • ex gratia payments by charity trustees;
  • transfers and legacies following merger;
  • the effect of a charity trustee's insolvency on a charity's assets;
  • the power of the Charity Commission to require a charity to change its name;
  • the power for the Charity Commission to determine the identity of charity trustees;
  • certain powers of the Charity Tribunal; and
  • the law relating to the use of permanent endowment.

The consultation paper can be found here in full and in summary. There is also a response form for submitting before the consultation's closing date of 3 July 2015.

Category: Article

Client types: Charities and non-profit