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Litigation and the pursuit of charitable purpose

Alice Holt examines the court’s approach to 
a charity’s application to engage in legal 
proceedings relating to an internal dispute

11 June 2012

Litigation and the pursuit of charitable purpose

In Numan v Magasena [2000] Mummery LJ commented on the courts power to prevent charities from frittering away money subject to charitable trusts in pursuing litigation relating to internal disputes.
Trustees have a fundamental duty to ensure their charitys assets are applied to further its charitable purpose. For this reason, the law requires trustees to seek our consent or, if we refuse, the consent of a Chancery Division judge before they can engage in legal proceedings relating to the internal or domestic affairs of their charity.
We, in turn, are bound by section 115(3) of the Charities Act 2011 to refuse permission if we decide that we can deal with the underlying problem using our powers (in the absence of special reasons). Trustees then still have the option of seeking the consent of a judge.
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