Charity law.

Property Two Coursework 2003

The Register of Charities is a list of all the charities that have been set up in England and Wales; the Charity Commission (The Commission) supervises these charities. The register was created over forty years ago and since then the legal understanding of what is, charitable has been continually changing. Under section 3 (1) of the Charities Act 1993 the Charity Commission must keep a register of organisations that are deemed to be charities.

The Commission launched its review of the register and used its powers to try and interpret and apply the law in a way, which recognised what is charitable in a changing social and economic society. The Commission has the same decision making powers as the court. The Commission has no power to make law, however it is arguable that in recognising new charitable purposes the Commission is making law and performing a judicial function, despite its unaccountability. The Commission is widening the scope of what is charitable, or in some instances even making that scope narrower by removing certain purposes from the register. The Commission demonstrated its ability to remove a purpose from the register in its decision in 1993 to deprive rifle clubs of there charitable status because they were no longer needed as a back up for the army and were now recreational clubs for the members.

How flexible is the Commission? There is no statutory definition of what is a charitable purpose. If such a definition existed, the Commission would have been bound to follow it. A purpose is charitable if it falls within the spirit of the Preamble to the Charitable Uses Act 1601(Statute of Elizabeth). The Statute of Elizabeth was repealed by the Mortmain and Charitable Uses Act 1888, but section 13(2) expressly preserved the Preamble to the previous Act. Due to its continued existence Lord Mcnaughten placed these purposes into four general headings known as the four Pemsel heads as laid down in Pemsel these were 1) the relief of poverty, 2) the advancement of education, 3) the advancement of religion; and 4) other purposes beneficial to the community. The fact that there is no statutory definition, the Charities Act 1960 simply says that charity should be given its current legal meaning, and that the Commission has the Pemsel frame work to work from, allows the Commission to be flexible. There are limitations on the Commissions powers, such as considering whether the purpose is similar to other previously recognised charitable purposes, a public benefit must flow from it, and the purpose must be clear and certain and can not be political.

The Commissions interest lies mainly in the fourth area, ‘other purposes beneficial to the community.’ These purposes are defined in detail in the Charitable Uses Act 1601. The review has shown the Commissions willingness to recognise new charitable purposes. However, these purposes must be similar to purposes in the Preamble, purposes recognised as such include, the care upbringing and establishment in life of sick children and young people and the training and retraining of and finding work opportunities for unemployed people. Or the purpose must be analogous to other purposes recognised as charitable by the courts, such as the ...

This is a preview of the whole essay

This provides some restraint on the Commissions ability to recognise new charitable purposes. In its review, the Commission looked at its decision that the ‘promotion of urban and rural regeneration’ could be recognised as a new charitable purpose. In the judgement of Williams Trustees v IRC it was indicated that in deciding whether a trust is charitable it must first be regarded as being in the spirit and intendment of the Preamble and secondly its purpose must be beneficial to the community in a way that is charitable. In Scottish Burial , Lord Wilberforce said for something to come within the spirit and intendment of the preamble meant, “it came within the scope and effect of decisions previously made by the court”. It will obviously be easier to qualify for charitable status if the purpose falls expressly within the Preamble.

In considering whether “promoting inexpensive and sanitary methods of disposal of the dead” was charitable the Commission considered that it was in ‘the spirit and intendment’ of certain purposes in the Preamble to the Charitable Uses Act 1601. These purposes include, ‘ The repair of bridges, ports, havens, causeways, churches, sea banks and highways’. Allowing them to make it a charitable purpose as they concluded that it could fall under the analogy of other cases dealing with burial, which were seen to be charitable.

The Commission is bound by the same approach as the courts in looking for an analogy as a necessary step in concluding a purpose produces a charitable benefit to the public. However, the Commission has shown its flexibility in its ability to interpret the Pemsel heads widely to include the new charitable purposes such as ‘promotion of urban and rural regeneration’, not previously included as a charitable purpose. The Commission is also allowed to decline to follow a previous decision in the same way as the courts, allowing more flexibility because it can depart from precedent when it think this is necessary. Although the Commission has no power to make new law, providing a restraint on development and its decision making process.

The review of the register is a rolling review; this shows that the Commission is forward looking in that it has not conducted a one off review but one that can move with the times. It shows the Commission looking towards changes that might occur in the future allowing the Commission to deal with issues as they arise in a changing society such as Internet Content Rating Association, discussed later.

The Commission made a decision in 2000 to accept ‘ promotion of community capacity building’ as a charitable purpose in relation to communities, which are socially and economically disadvantaged. In order to do this the Commission had to decide what community capacity building meant something which, had never been decided before. This shows that the Commission is able to undertake a constructive approach to adapting the idea of charity to meet changing social and economic circumstances of sections of the public.

The Commission also made a decision on 12th September 2002, which shows the Commission accepting new purposes as charitable in a changing social environment.

The decision concerned the Internet Content Rating Association and its application for charitable status. The Commission decided that the company was established for the public benefit of “protecting health and welfare of young children on the Internet from danger of exposure to inappropriate material”. This is a very recent decision showing the Commissions response to a society, which is becoming more technologically advanced, and the Commissions ability to recognise new charitable purposes in the light of this changing society.

The changing social surroundings of charity law have seen another recent change with the introduction of the Human Rights Act, which allows issues arising from the European Convention on Human Rights to be raised in the domestic courts. The Commission decided that the Human Rights Act did not raise any issues in relation to public benefit, but accepted that it would consider any Human Rights Act point raised in an application for registration. This shows that the Commission is considering the implications of recent legislation such as the Human Rights Act and its affect on charity law. Even if it thinks it is not applicable, it is willing to consider it and comply with obligations under the convention. This demonstrates the Commissions response to a changing society in light of the Human Rights Act. The Commission must look at how it interprets legal principles to ensure that they are interpreted in a modern society in a way that is compatible with Convention Right

In looking to the future and possible reforms of Charities law, there have been calls for a statutory definition of charitable purposes and a new legal structure for charity law. However this review has show the Commission welcoming the lack of statutory definition because it allows them to be flexible as illustrated above, and does not hold back development of charity law. The Commissions ability to recognise new purposes means that the Commission can make decisions without costly litigation or the need for legislation. The review illustrates that the Commission takes a constructive approach to ensure that the Preamble and case law are interpreted in a modern light. The Commission attempts to keep what it Charitable reasonably in line with economic and social conditions. Therefor this review has shown the Commission to be flexible, forward looking and responsive to the changing social and economic needs of society.

Bibliography

Trusts and Trustees Cases and Materials 6th Edition E.H. Burn G.J.Virgo, Butterworths 2002

The Law of Trusts and Equitable Obligations 3rd Edition Robert Pearce and John Stevens Butterworths 2002

Hayton and Marshall Commentary and Cases on The Law of Trusts and Equitable Remedies 11th Edition DJ Hayton Sweet and Maxwell 2001

Re City of London Rifle and Pistol Club and Burnley Rifle Club[1993]

Income Tax Special Purpose Commissioners v Pemsel .[1891] AC 531

Williams Trustees v IRC [1947] AC 447,519 per Lord Simonds

Scottish Burial Reform and Cremation Society v Glasgow Corporation [ 1968] AC 138, 154

Scottish Burial Reform and Cremation Society v Glasgow Corporation [1968] AC 138

RR1a Recognising New Charitable Purposes, Annex B, B1 at www.charity-commission.gov.uk/publications/rr1a.asp

Preamble, Charitable Uses Act 1601

Barralet v Attorney General [1980] All ER 918,926-7 per Dillion J

Decision of the Commissioners for England and Wales made on the 12th September 2002 Application for registration of the internet content rating association.