The key difference between the Independent Schools Council and the Charity Commission over the Commission’s guidance on public benefit, is the extent of the obligation that fee-charging charities owe to those that can’t afford its fees, the ISC’s lawyer said yesterday.

Continuing his representations to the Upper Tribunal judges hearing the ISC’s judicial review of the Commission’s guidance after lunch on day one of the case, Nigel Giffin QC said: “The critical difference between us and the Commission is that we accept and acknowledge an obligation to consider how to deal with those who can’t afford the fees, whereas the Commission and interveners argue for an obligation of a result.”

The ISC also disputes the Commission’s view of what constitutes a “sufficient section of the public” that the law states must be able to benefit from a charity’s services in order for that organisation to be deemed to be providing public benefit.

Giffin said: “In the guidance the Commission’s rationale for its approach was that if people who can’t afford fees are excluded from getting any benefit from the charity, then that means that those who do benefit are not a sufficient section of the public.  

“In the course of the litigation a second strand of reasoning has appeared, it goes this way:  The Commission says that people who can’t afford fees are potential beneficiaries of the charity in the sense there is nothing in its objects that formally excludes them. It then says that the trustees are under a duty to exercise their discretion and apply the assets of the charity for the benefit of the class of potential beneficiaries considered as a whole.

“And therefore they say that if in practice you operate in a way that means the subclass of people unable to pay the fees isn’t getting a look-in at all, the trustees are not operating for the potential whole class of beneficiaries and therefore are operating in breach of trust.”

The ISC is sure this is a “fundamentally legally misconceived approach”, Giffin contended. “There is no requirement that all those that might conceivably benefit from it, whether considered as individuals or as a sub-class, should get a look-in.  There is absolutely no authority that begins to support that position.”

The Charity Commission is expected to begin its representations to the Tribunal later today.