06 April 2011

New Charities Bill to consolidate charity law


Chris Priestley
Partner | UK

You may not have noticed but a new Charities Bill is currently wending its way through Parliament. In truth, however, the Bill (with its 358 sections and 11 schedules) is perhaps of more interest to charity lawyers rather than to charities or their trustees. This is because the Bill is simply designed to consolidate existing law rather than create new law.

The Bill has been prepared by the Law Commission whose job it is to review and recommend reform of the law in England and Wales.

In many fields of legislation a series of Acts will build up over time, each amending, adding to, or subtracting from the previous ones. The point is reached when it is very much in the public interest that this series should be consolidated into a single Act. Of course this in no way prevents the consolidated Act from itself being amended by further Acts – which is just as well given that a fundamental review of the operation of the Charities Act 2006 will shortly get underway.

This does beg the question – why spend time consolidating existing law if a review of significant parts of English charity law is imminent and may mean that the existing legislation which is to be consolidated may be amended or replaced?

English and Welsh charity legislation is currently fragmented. Key provisions are contained within the Recreational Charities Act 1958 and in the Charities Acts of 1992, 1993 and 2006, all since amended by other legislation.

As Nick Hurd puts it:

‘Charity legislation is extremely difficult to navigate, particularly for the untrained reader. The Charities Bill is to be welcomed. The Bill will make it easier for people to understand and follow charity law.’

Given that the Bill is still being considered there is time to correct one omission – the decision not to include the provisions of the Charities Acts 1992 and 2006 which deal principally with charity fund-raising. If the aim of the consolidation exercise is to make the rules more accessible and comprehensive then leaving out the significant rules relating to commercial participators; professional fund-raisers and fund-raising statements is unhelpful.

The purpose of Law Commission recommendations is to tidy up errors of the past, remove ambiguities, and generally introduce common sense on points where the form of drafting in the past appeared to lead to a result which departed from common sense. The important point about Consolidation Bills is that they cannot be used to introduce a substantial change in the law.

The substantive changes to charity law which are needed to deal with for example the practical difficulties with the register of mergers or to help with the simplification of the rules relating to the disposal of charity property may be introduced as an outcome of the review of the operation of the Charities Act which must take place this year.

Chris Priestley Partner | London

Category: Article