Charity Proceedings

• Published date: 02 July 2020
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Charities & Non-Profits , Arbitration & Dispute Resolution
• Law Firm: Rollits LLP
• Author: Ms Gerry Morrison

In a recent High Court case, the High Court refused to grant permission to pursue charity proceedings and stayed the claim to enable the parties to engage in mediation. This has also highlighted the requirement for The Charity Commission to authorise charity proceedings by Order. In the absence of an Order from The Charity Commission the Court cannot deal with charity proceedings.

Charity proceedings are relevant to disputes concerning internal administration of the charity and are not relevant to disputes between a charity and third parties that are outsiders.

Charity proceedings can only be brought by the charity, any of the charity's trustees, any person interested in the charity, or in the case of a local charity - two or more residents.

In terms of who is "interested in the charity" the Court of Appeal has previously stated that:

"A person generally needs to have an interest materially greater than or different from that possessed by ordinary members of the public."

For example, a member of a charity with a wider voting membership may, in some circumstances, be deemed a person "interested in the charity".

Charity proceedings include:

• Proceedings for breach of a charitable trust
• Judicial review proceedings of a charity' actions where applicable; and
• A claim by charity trustees to an indemnity or contribution from an incorporated charity to which the charity's assets had been transferred.

The following have been held by the Court not to be charity proceedings:

• A dispute as to whether a charitable trust has been declared;
• Claims to enforce common law rights (e.g. in tort or contract); and
• A claim by a charity for possession of land where there was no dispute...