A case in which the Charity Commission provided contradictory advice to a charity over more than 20 years shows the Commission cannot be trusted with a new power to give formal warnings, a lawyer involved in the case has said.
The power for the Commission to give official warnings in the event of misconduct is a new one, introduced in the recent Charities (Protection and Social Investment) Bill. Many charities asked for the power to be subject to review by the Charity Tribunal, but no such power exists.
Stephen Claus (pictured), a partner at Brabners, said the recent case in which his clients, CISWO, a coal miners’ charity, received contradictory advice from the Commission for more than 20 years, meant the regulator could not be trusted with such a power.
The Commission was criticised by the Parliamentary and Health Service Ombudsman (PHSO) as providing a service “so poor as to amount to maladministration”, and ordered to apologise and pay roughly £20,000 to the charity.
“No matter what reassurances may be provided today over this controversial new power, we have no guarantee the Commission in five years will be capable of recalling such assurances, let alone honouring them,” Claus wrote in an analysis of the case.
“It is suggested that the exercise of the power to give warnings is likely to be used in only a few cases, whereas at the Charity Law Association conference, concerns from the floor were raised about the fact that this could become the weapon of choice.
“We, therefore, have a potential weapon of choice in the hands of a body which the PHSO has concluded has no corporate memory, is guilty of maladministration, failed to follow the Ombudsman’s Principles, could not write a coherent letter and continually changed its mind when challenged, that the product of internal deliberations were not accurately reflected in the correspondence, that they did not wish to meet and could not, after their own Independent Complaints Reviewer had advised them to write a letter, write a satisfactory letter, until some years after the event when the matter was in the hands of the PHSO.
“The question that needs to be asked, therefore, is whether this is a body that can be safely relied upon to fairly exercise a power which it would appear can only be externally challenged on a judicial review?
“We support, in principle, the idea of a role that enables the Commission to give warnings, but only if there is a proper course of redress to ensure that individuals are not subjected to maladministration or poor decision-making in respect of which the only way forward is an expensive judicial review challenge.”
Yesterday the Charity Commission said it has already changed its systems to avoid a similar situation.
A Charity Commission spokesman said: “We do not accept that the issues in this case give cause for concern regarding the use by the Commission of the official warning power.
“Parliament has recognised the need for the power, the appropriate safeguards that are required and the Commission’s ability to use the power responsibly. The Commission will consult on the use of the warning power in the coming months and we would encourage charities to contribute to that consultation.”
