Beyond the regulator
The Charity Tribunal has been in operation for nearly three years. Its principal judge, Alison McKenna examines its outputs and provides some insights on future direction
KEY POINTS:
- Lower cost access to justice for charities.
- The tribunal hears appeals, references and reviews.
- No need to exhaust Charity Commission’s review process first.
- Strike-outs are still a legitimate judicial process.
- The architecture needs to change to widen jurisdiction.
In the debate preceding the passing of the Charities Act 2006, it was argued that the creation of a specialist Charity Tribunal was necessary for two reasons. Charities had expressed the view that they could not afford to challenge the Charity Commission, because the cost of bringing either an action in the Chancery Division of the High Court or of making an application for judicial review in the Administrative Court was prohibitive. The second policy objective arose from the concern expressed by the sector, and perhaps particularly its advisers, at the paucity of charity law issues coming before the High Court, so that charity law was said to have ossified and was unable to keep pace with the changing role of charities in society.
TCEA reforms
Since the passing of the Charities Act 2006, the Tribunal has been fundamentally reformed by the tribunals courts and Enforcement Act 2007 (‘The TCEA’). The diagram set out in Figure 1(page 24) shows how the tribunal system is now structured following the TCEA reforms, which have brought together a wide range of tribunal jurisdictions into a two-tier structure, constitutionally independent of government.
There are now common procedural rules for each chamber. You will see that the charity jurisdiction sits in the General Regulatory Chamber in the First-tier Tribunal and in the Tax and Chancery Chamber in the Upper Tribunal, which is a superior court of record. This means that appropriate cases can be ‘fast-tracked’ to a level where precedent can be set for the benefit of the sector as a whole. Our rules also make it possible to separate out points of law for a preliminary ruling by the Upper Tribunal, with the ultimate determination of the factual issues being remitted back to the First-tier for determination. Of equal importance is the preservation of the procedural informality and quasi-inquisitorial approach characteristic of tribunals so that appellants appearing in person in the First-tier can be assisted in the presentation of their case. This two tier system allows for the determination of a case by judge-only panels in the Upper Tribunal and the involvement of our specialist lay members in the evaluation of evidence in the First-tier.
Types of application heard by the tribunal
The jurisdictional architecture for the charity jurisdiction is provided by section 2 A (4) of the Charities Act 1993 (as amended by the 2006 Act). In summary, there are three distinct types of application which may be made to the Tribunal which are:
(1) Appeals. These involve substantive re-hearings of certain decisions, directions or orders of the Charity Commission, as set out in a table in schedule 1C to the 1993 Act. The table tells you in column 1 what decisions can be appealed, in column two, who can appeal them, and in column three, what the tribunal can do if the appeal is upheld.
(2) A review. This is the second type of case we can hear and refers to a category of decisions made by the regulator which are not capable of a substantive re-hearing by way of appeal, but in respect of which there is a right to review by the Tribunal, applying the principles that the High Court would apply on an application for judicial review – so including issues of procedural fairness, human rights, proportionality and so forth. For reviewable matters, see Charities Act 1993 schedule 1C paragraphs 3 and 4.
(3) A reference. This is the third type of case we can hear and is a matter referred to the tribunal by the Attorney General (or, with his consent, the Charity Commission) to clarify charity law. This is effectively a declaratory jurisdiction. Our first reference, concerning the public benefit guidance for independent schools, will be heard by the Upper Tribunal in May 2011. Further details are available on www.charity.tribunals.gov.uk
Applications so far
We have received only 15 applications over nearly three years. A slow start, but one in which the cases have varied greatly in complexity and subject matter, ranging from disputes about recreation grounds, to the impact of equality legislation on charitable adoption agencies, and the human rights issues involved in the removal from office of a charity trustee. Some of these cases have involved detailed and complicated matters of law, argued by leading counsel. In this sort of case, it does feel largely as though the Chancery Division has simply decamped into the Tribunal hearing room. The inevitable consequence of a room full of lawyers is that the cost to the parties is raised!
By contrast, in the cases which have involved litigants in person, for example Maidment and Ryan v Charity Commission,1 the tribunal has been able to take a proactive approach to assisting the appellants to make out their case. We have adopted a flexible approach to our work, for example ruling on the relevant issues in advance of the hearing, and asking the respondent to present its case first, so that the appellants get the best chance to present a focused case in response.
Charity Commission review process
There is no obligation to exhaust the Charity Commission’s internal review process before coming to the tribunal. If a charity has a limited resource to spend on challenging a decision of the regulator, they can lodge an application with the tribunal (which you can do by email and for free) and get the resulting disclosure of the Commission’s papers so that they can then have their case heard by an independent tribunal and are able to mount their best case.
It is not necessary to be legally represented in the tribunal (although there is a pro bono advice representation available from the Bar Pro Bono Unit2 should charities wish to take advantage of it) and it is possible under our procedural rules to opt for your case to be determined by the tribunal on the papers only and without an oral hearing.
In these circumstances, the only legal expense for the charity could be limited to the preparation of the written submissions. I do wonder why charities are still spending money on being legally represented through the Commission’s internal review procedure, which is obviously not independent and does not involve disclosure of the Commission’s papers.
Scope of decisions
Many of our decisions to date have involved the clarification of procedural points, such as the nature of a re-hearing, the scope to admit evidence that was not before the Commission, whether there is a right of appeal to the tribunal when the Commission rescinds the order concerned prior to a hearing, whether an order can be impliedly requested and/or impliedly refused, and most recently, the question of who is ‘a person affected’ so as to have the legal standing to make an application to the tribunal.
Some of the applications made to the tribunal have been struck out for want of jurisdiction. The strike out is a specific process under rule 8 of our rules,3 and involves the consideration of the case by a judge and the engagement of the appellant in a process of making representations on the proposed strike out. My own practice is to send the appellant a copy of my draft strike out ruling for comment so that, in some small way, the appellant does get his or her ‘day in court’. The strike-out decisions are published on our website. I do not personally see this as a failure of the tribunal but rather a legitimate judicial process in itself. I understand why an appellant who has been struck out feels disappointed and often then they are left with no effective remedy, but we are all learning from the process and I hope that a wider range of decisions will ultimately be made amenable to appeal as a result of the issues raised in those cases.
One feature of our intricate jurisdictional architecture is that where there is not a right of appeal to the tribunal, there is often a basis for applying for judicial review, which is now likely to be heard in the Upper Tribunal by transfer under s.31A of the Senior Courts Act 1981. I tend to think that it would be more consistent with the legislative intentions behind the creation of the tribunal for these matters to amenable to review in the First-tier Tribunal so that the appellant concerned does not go round in a circle from the Administrative Court back to the tribunal.
Appeals
The one area of dissent about the creation of the Charity Tribunal in the 2006 Act was whether there should be a list of decisions which were appealable, or whether (as the Parliamentary Committee recommended) the Tribunal should have power to hear appeals against any decision of the Charity Commission (including ‘non-decisions’) on any point of law on any basis.
The government of the day went for the ‘list of decisions’ approach, but in the light of the strike-outs that we have made, it seems appropriate for the sector to re-visit this debate.
Now that we have the benefit of couple of years of road-resting, and with the parliamentary review of the Charities Act coming up this year, I think that now is a good time for the sector to remind itself of the original policy objectives and to consider whether they are still felt to be the right ones. I hope that the review will consider whether the tribunal’s current architecture should be changed to allow more cases to be brought to it.
Note: This article is based on a speech given to the charity law and policy unit, Liverpool University Law School, 18 November 2010.
1. See also the news story, ‘Playground complaints’ in Caritas, issue 22, September 2009, page 5. www.charitiesdirect.com/ caritas-magazine/%20playground-complaints-503.html
3. The Tribunal Procedure (First–tier Tribunal) (General Regulatory Chamber Rules 2009. See www.tribunals.gov.uk/tribunals/rules/ publishedrules.htm.
Author: Alison McKenna
Alison McKenna is principal judge of the First-tier Tribunal.
She was called to the Bar (Middle Temple) in 1988 and her subsequent legal career included several different roles in the government legal service (including that of an in-house legal adviser to the Charity Commission), and (following her qualification as a solicitor in 2003) as a partner in private practice,specialising in charity law.
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