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Commission to scrap regulatory compliance cases 2

Governance | Tania Mason | 17 Oct 2011

The Charity Commission is to stop carrying out regulatory compliance investigations, the type of inquiry it conducted into the charity operated by Liam Fox MP and his friend Adam Werritty last year.

The regulator introduced regulatory compliance cases about five years ago as a sort of halfway-house between normal casework and statutory inquiries.  Last year it opened 144 new regulatory investigations in total, just three of which were statutory inquiries.  The number of statutory inquiries have been falling steadily over the last three years, from 19 in 2008/9 and nine in 2009/10.

But last week the Commission's head of legal services told an audience of charity lawyers that regulatory investigations would no longer happen at the new, slimmed-down Commission.

Kenneth Dibble was responding to a delegate who asked: “Can we assume we have seen the back of regulatory investigations, which many of us thought were unlawful anyway?”

Dibble explained that regulatory investigations had been created because the Commission found that once it opened a statutory inquiry into a charity, the relationship with the charity soured so much that it became much more difficult to achieve a positive outcome.

Thus it created the ‘regulatory compliance case’ as another tool in its armoury, for cases that weren’t necessarily serious enough to warrant a statutory inquiry. Such a case was opened by the Commission into the Atlantic Bridge charity, the one founded by former defence secretary Liam Fox and staffed by his friend Adam Werritty. That investigation, which took place in 2010, concluded that the charity should cease its activities because of their political nature, and last month the trustees announced they would wind up the charity.

But in light of the Commission’s budget cuts and narrower remit, “we will not be carrying out cases under that name in the future”, Dibble told the Charity Law Association conference.  

“Cases that fall within the remit of the investigations and enforcement unit will all be statutory inquiries and the rest we will deal with as normal casework.

“This notion of ‘an inquiry but not an inquiry’ will disappear.”

The Commission told civilsociety.co.uk that it could not say what kind of investigation would be launched into the Atlantic Bridge case if it cropped up now. A spokeswoman said: "Given that we will be operating under a new risk framework, it is not possible to say whether a case which was previously conducted as a regulatory compliance case would now be conducted as a statutory inquiry or by our operational teams."

Will not reopen Atlantic Bridge case

The Commission added that it has no plans to reopen the investigation into Atlantic Bridge, despite calls by former Commission chair Geraldine Peacock to do so.

Peacock told The Times last week that the Commission risked damaging its own reputation if it did not reopen the case.

But the Commission spokeswoman said: “We consider that in this case the nature of our investigation was appropriate to the concerns about the charity. No further regulatory action to take in relation to the charity is necessary. The charity has now been removed from the Register of Charities.”

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