Charity begins at the new Tribunal

The real case work has not yet started but Alison McKenna, the first president of the Charity Tribunal and former partner at Salisbury-based Wilsons, is pleased that she can tick another box on her long 'to do' list.

Legal members were appointed in May and the Judicial Appointments Commission has now made recommendations for ordinary tribunal members to the Lord Chancellor. Appointments should be finalised by the end of July, to be effective in the autumn.

Having turned that corner, McKenna now has her eyes set on the bigger, long term project of establishing processes that will see an efficient tribunal fit for purpose, whose members are fully trained and skilled up, and which can deliver a consistent approach. This, she says, should be a key part of her role as the figurehead of the tribunal under her judicial lead.

Although not yet fully staffed the Tribunal has been running since 18 March. As president McKenna could hear cases on her own if necessary or with another legal member, and she envisages that she will do a fair amount of hands on adjudicating. Already the new tribunal has been involved in case management work, deciding whether appeals and applications fall within its jurisdiction as defined in Schedule 1C of the Charities Act. While there has been no formal panel hearing, directions have been given in certain cases and one appeal is scheduled to be heard later this year.

A new procedure

The tribunal has been set up to hear about 50 cases a year, with a completion target of 30 weeks in 75 per cent of cases. The figure of 50 cases a year, by McKenna's own account, was reached after 'putting a finger in the wind' but she also says that experience from other tribunals indicates that there tended to be fewer cases than expected in the first year of operation. On the other hand, cases seemed to take a little longer to start as tribunal members were getting up to speed individually and collectively. Reasons for not closing a case within the 30 week target are expected to vary, ranging from a situation where an application was initially made by a litigant in person who subsequently instructs a lawyer who then asks for time to study the file, or where there are evidential issues that cannot be dealt with within that timeframe. 'Reasons to do with the parties', says a hopeful McKenna, 'rather than the Tribunal.'

Appeals against Charity Commission decisions are expected to form the bulk of the case load, mainly as appeals for a re-hearing of the case or a review of the Commission's decision. Unlike the previous appeal procedure which required certification by the Commission before the appeal could be made to the High Court, the new procedure is intended to provide a low-cost, quick and easy access to justice.

There is no merit threshold in the legislation, which may make the anticipated figure of 50 cases per annum seem optimistic, but McKenna says that the jurisdiction filter should ensure that unmeritorious cases do not reach the tribunal; and in due course she will consider whether specific guidance ought to be issued.

The new president also believes that the prospect of swift action before the tribunal will shape and improve the decision making process within the Commission, that decisions that may be challenged will be made faster, and that there will be a lower risk of decisions being challenged at all.

Having a final decision which may be challenged is an issue that has concerned practitioners, particularly as there could be cost implications for clients, but already the Commission has made changes to the way in which its decisions are finalised.

'The Commission has set up a unit with a specific remit to review decisions and make sure that any matter which falls within the tribunal's jurisdiction will be thoroughly reviewed at a senior level', McKenna says.

In practice, she anticipates that most appeals will be very fact based and suitable for the informality and speed of access of the tribunal, with few cases requiring the tribunal to set precedents. This issue, however, will need to be considered in the light of the forthcoming new tribunals service due to go live in November, where each tribunal will be divided into first tier and upper tier.

'In the few cases where the tribunal will be asked to set precedents', the president continues, 'it would be sensible for the first tier to be leapfrogged and for the case to go straight to the upper tier. It has been proposed that both tiers could have first instance jurisdiction, and there will have to be a signposting mechanism to determine the relationship between the two tiers and their respective jurisdiction, but nothing has been finalised yet'. The Charity Tribunal will not be folded into the new structure until April 2009 and by then will have the benefit of the other tribunals' experience.

A wider jurisdiction

Most cases reaching the High Court until now have related to decisions such as the removal or suspension of trustees or the refusal to register a charity, and McKenna says that irrespective of improvements in the Charity Commission's decision making process this is likely to remain a contentious area.

One untested area is the issue of public benefit following the recent Charity Commission guidance. While the Commission has openly stated that it is not setting out to fail charities and wants to work with them to help them pass the public benefit test, it is probably inevitable, according to the president, that there will be cases where the Commission and charity trustees disagree as to how this test is being applied, and that this disagreement reaches the tribunal.

Such situations, however, would be particularly suited to a referral by the Attorney General under specific powers granted in the Charities Act. 'Rather than dealing with the principles in a particular case the tribunal would be able to review the guidance generically, allowing individual charities to become parties to the reference as intervener if appropriate'.

While the new president believes a reference by Baroness Scotland is unlikely to be made before the tribunal comes fully under the umbrella of the new tribunals service, it will become increasingly likely when the Charity Commission finalises its thinking on the legislation in the coming year.

No procedure has been finalised regarding how charities should approach the Attorney General but it is to be expected that there will be a mechanism to filter out requests, says McKenna, and it is difficult to see how charity lawyers will resist making use of a potentially very powerful procedure.

More effective access to justice

The specific provisions regarding the Attorney General's powers were introduced after access to justice and lack of public funding were repeatedly raised in the joint committee scrutinising the Charities Bill, according to McKenna.

Much is anticipated of the possibility to ask the Attorney General to make a reference to the tribunal as a means of achieving justice in cases raising issues of principle where a charity may not have the means to fund litigation, or may not want to be seen to be spending donated funds on litigation, or may not wish to be in the public eye in court as a matter of policy.

Access to justice remains firmly on the new tribunals service's agenda with a number of consultations currently open, and the government has committed to reviewing the question of funding from 2011. It is also an issue which McKenna says she will want to discuss with tribunal users in user groups.

The informality and inexpensiveness of the procedure however does not necessarily imply that there will be a glut of applicants and McKenna has been in talks with the Bar Pro Bono unit to consider how it might assist with tribunal applications. By acting as a separate screening mechanism, the unit would also ensure not only that applications in meritorious cases can proceed but also that frivolous litigation is discouraged. She is also hopeful that Citizens Advice Bureaux and Law Centres will funnel applications in a similar way.

'There is an unavoidable risk that low cost access to justice encourages litigants in person', says McKenna, 'but the tribunal has power to strike out applications that do not disclose a valid cause of action. There are also specific cost provisions which should act as a deterrent for vexatious litigants'.

On the question of costs in ordinary cases, it is anticipated that, as with most tribunals, awards are unlikely to be made on a regular basis. Against this background practitioners will be monitoring closely how tribunal practice develops to gain an early understanding of the length and complexity of litigation before the tribunal and the impact on the cost of litigation.

While there is no charge for making an application to the tribunal, it is at this stage difficult to predict with any accuracy how these costs will compare with litigation costs in the High Court. Leaving aside the option to bring a case through the Attorney General, some lawyers have expressed concern that only some of the wealthier charities would be able to appeal to the tribunal, particularly if an appeal raises complex issues which might involve experts.

McKenna's appointment came as a surprise to some in a world where applicants for such posts have tended to be lawyers in the latter part of their careers in practice. But the barrister-turned-solicitor is preceded by a solid reputation as an experienced charity law expert and has the respect of the profession. In fact, she could well be the first example of a new generation of judges whose profile is exactly what the judiciary needs as tribunal justice embarks on a far-reaching programme of reforms.