Technical briefing

Joining the legal review of public benefit in independent schools

Finance | Alison McKenna | 10 Dec 2010

Principal charity tribunal judge Alison McKenna runs through the ins and outs of the judicial process in relation to the recent public benefit review of independent schools.

On 28 September this year the Attorney General, Dominic Grieve QC MP, made a reference to the First-tier Tribunal (Charity) under paragraph 2 (1)(a) of schedule 1D to the Charities Act 1993 (as amended by the Charities Act 2006). The reference was accompanied by a request that the First-tier Tribunal (Charity) should transfer the reference to be heard in the Upper Tribunal (Tax and Chancery Chamber).

On 7 October this year, Mr Justice Sales heard an application for permission in judicial review proceedings in the Administrative Court. These proceedings were commenced by the Independent Schools Council. Mr Justice Sales gave the ISC permission to bring the judicial review and, relying on s. 31A of the Senior Courts Act 1981, transferred the judicial review proceedings to the Upper Tribunal (Tax and Chancery Chamber) so that the judicial review and the Attorney General’s reference cases could join up and be heard together.

The Reference

The Attorney General (or the Charity Commission with the Attorney General’s consent) may “refer” certain questions of charity law to the Tribunal for a ruling. “Charity law” is defined for these purposes in Schedule 1D paragraph 7 of the 1993 Act as “any enactment contained in, or made under, this Act or the Charities Act 2006…and any rule of law which relates to charities”.

“References” differ from an appeal or an application for review in the Firsttier Tribunal (which are usually brought by a charity or a trustee or a beneficiary of a charity) in that they involve general questions of charity law rather than the consideration of a specific decision direction or order made by the Charity Commission. The relevant law in relation to references is contained in section 2A(4)(b) of the Charities Act 1993 and in Schedule 1D to the Act.

The reference that the Attorney General has made (the first such case) consists of a series of specific questions about the impact of the Charity Commission’s public benefit guidance on a hypothetical independent school. Details of the reference have been published on the Tribunal’s website at www.charity.tribunals.gov.uk. The Tribunal’s rules require it to “publish details of the reference and information as to how a person likely to be affected by the reference can apply to be added as a party to the proceedings”.

The Tribunal can give permission for (a) the charity trustees of any charity which is likely to be affected by the Tribunal’s decision on the reference; (b) any such charity which is a body corporate; and (c) any other person who is likely to be so affected, to be joined as a party to the reference proceedings. If you fall into one of these categories, you can apply to be joined as a party to the reference under rule 9 of The Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009. Parties to the reference proceedings are only at risk of costs being awarded against them if they behave unreasonably in the proceedings. You can find the relevant law and the procedural rules on the Tribunal’s website. The Tribunal previously directed that all applications to join as a party should be made by 11 November 2010, however there is discretion for it to consider later applications.

The Judicial Review

The judicial review application involves the broader question of whether the Charity Commission’s approach to the public benefit requirement is legally correct in the context of charitable schools which charge fees.

As a result of the recent tribunal reforms under the Tribunals Courts and Enforcement Act 2007, certain judicial reviews applications, including those involving the Charity Commission, may now be transferred to the Upper Tribunal for hearing.

Charity cases in the Upper Tribunal are heard in the Tax and Chancery Chamber by an Upper Tribunal Judge, who may be a High Court (Chancery Division) Judge, and/or other designated Judges of the Upper Tribunal, of which I am one. There are no lay members involved in charity cases in the Upper Tribunal.

It is possible for interested parties to “intervene” in judicial review cases. There is no set procedure for intervening in an Upper Tribunal hearing but there is some useful guidance on interventions in judicial review proceedings generally on the Public Law Project’s website.

The Upper Tribunal has the power to award costs in a judicial review case in the same way that a court would, which means that an intervener would have to consider the risk of a costs application being made against it by the other parties. The Tribunal will shortly publish the agreed directions for the progression of both cases and the details of forthcoming hearings on its website.

Alison McKenna is principal judge in the First-tier Tribunal (Charity)

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