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Tribunal allows 'class action-style' Charity Commission challenges

11 July 2008

A new tribunal system, which was set up under the Charities Act 2006 and only has jurisdiction over Charity Commission decisions made on or after 18th March 2008, could allow private schools and other charities to team up in class-action style claims to battle against the decisions of the Charity Commission.

According to the Financial Times, Alison McKenna, first president of the Charity Tribunal, itself founded by the government, said a charitable school with limited resources could bring cases to the Tribunal on the back of other schools' cases without having to incur extensive legal fees.

The paper reports some schools are concerned about the possibility of failing the new "public benefit" rules which require them to show how they benefit communities/society as a whole, For example private schools offering poorer students places through schemes such as bursaries.

The publication also adds Ms McKenna said the tribunal was set up to allow charities to band together to bring a group appeal against a Commission decision, allowing schools to join onto other schools' cases.

However, the paper also quotes Ms McKenna as saying of the system: "We're resourced on the basis of 50 cases a year, which is a bit of a finger in the wind really." The Tribunal is expected to tackle "novel" issues of charity law and thus develop a core set of legal precedents which will clarify this complex area of law.

Carrie Allen, associate in the charities team comments: "It will be interesting to see what cases are brought to the Tribunal over the next twelve months. Prior to March of this year, if charities wished to appeal decisions made against them by the Charity Commission their only recourse was to the High Court, which for many was simply too costly to consider."

To find out more about our charity legal services, or to discuss a legal matter concerning your charity or not-for-profit organisation, please contact our charity law team on 01753 279059 or email charitylaw@bpcollins.co.uk.