Presented at NCVO's Trustee Conference on Monday 11 November 2014. The presentation was by Christine Rigby, BWB and a trustee of the Charity Law Association Nick Mott, Charity Commission. These slides will update trustees on recent legal developments, such as the new rules on campaigning. We will cover developments at the Charity Commission, including their revised conflicts of interest guidance and their approach to charity investigations, and outline changes in Scotland and Northern Ireland. To learn more about governance: http://www.ncvo.org.uk/practical-support/governance To find out about NCVO's Trustee Conference: http://www.ncvo.org.uk/training-and-events/trustee-conference

1. #TRUSTEECONF2014
AM1: Legal update for
trustees
Christine Rigby, BWB
Nick Mott, Charity Commission

2. NCVO/BWB Trustee Conference 2014
Legal update for trustees
Christine Rigby, BWB
10th November 2014

3. What we will look at
1. Developments in the last year:
• The Charity Commission
• Recent charity cases
• Changes to charity investment powers
• Lobbying and campaigning
• Data protection and consumer law
2. Update on developments in the last few years
• CIOs
• Public Services (Social Value) Act 2010
• Scotland, NI and Republic of Ireland
3. Looking ahead ……

4. 1. Charity Commission
• Our experience: longer response times
• Commission’s stated areas of particular concern: fraud, terrorism,
safeguarding and “improper politicisation”
• Step up in regulatory action combined with increased reporting:
• Inquiry reports
• Operational compliance reports
• Confidentiality of information provided to the Commission
– Kennedy –v- Charity Commission

5. 1. Recent charity cases
• Over 20 new cases to the First Tier Tribunal (Charity)
– Several challenges to Charity Commission statutory inquiries
– Several challenges to registration refusals eg Human Dignity Trust
• First few appeals to the Upper Tribunal
– John Nicholson
– Regentford
• Several high profile High Court cases too:
– Charity Giving/Dove Trust
– R -v- Hodkin

6. 1. Changes to charity investment powers
• Trusts (Capital and Income) Act 2013
– In force since January 2014
– Introduces statutory power to adopt “total return” approach to investing
permanent endowment
– Compliance with Charity Commission regulations and accompanying
guidance
• Law Commission proposals: statutory power for charity trustees to
carry out social (or mixed purpose) investments
– Law Commission confirmed its view that many charities already have
power to carry out social investment
– Recommendation to put beyond doubt by introducing a statutory power
– Will require legislation – so not for a while!

7. 1. Changes to lobbying and campaigning
Transparency of Lobbying, Non-Party Campaigning and Trade Union
Administration Act 2014
• Expenditure which can “reasonably be regarded as intended” to
promote or oppose the electoral success of a party, candidate or
group of candidates, or to enhance their standing = “controlled
expenditure”
• Includes staff costs
• Registration with the Electoral Commission:
– £20,000 in England
– £10,000 in Wales, Scotland or Northern Ireland
• Maximum limits
– £310,800 in England: £55,400 in Scotland; £44,000 in Wales; £30,800 in
Northern Ireland
– £9,750 targeted at specific constituency

8. .1 Lobbying and campaigning
Don’t forget the basics:
• Compliance with Charity Commission guidance on campaigning
generally – CC9
– Campaign strategies to have board approval
– Compliance with joint Electoral Commission/Charity Commission
guidance on the Lobbying Act
– Company law
• Resolution of members must authorise political donations of over £5,000 and
political expenditure at any level

9. 1. Data protection developments
• No special treatment for charities - the last two
years have seen two substantial fines for charities:
– Norwood Ravenswood Ltd £70,000
– British Pregnancy Advisory Service £200,000
• Must keep data secure - lots of guidance on
Information Commissioner’s website
• Use of data protection legislation to stifle investigations
– Global Witness case
• EU developments expected in 2017

10. 1. Consumer law changes
• New requirements introduced in June 2014
• The Consumer Contracts (Information, Cancellation and Additional
Charges) Regulations 2013
• Apply to all consumer sales – in shops, online, by phone, anywhere
else!
• For online sales:
• Banning of pre-ticked donation boxes
• New website requirements for payment buttons
• For all sales:
– New requirements to notify of cancellation rights
– New requirements re returns/refunds

11. 2. CIOs – nearly two years on
• Charitable Incorporated Organisation – new charity legal form
available since January 2013
• No registration threshold
• Oct 2014 - just over 2600 CIOs
• Charitable companies should be able
to convert in 2015
• Emerging themes
– Ease of registration
– Register of charges
– Flexibility for membership charities
– Insolvency

12. 2. Public Services (Social Value) Act 2010
• In force since 31 January 2013
• Obliges public authorities, before commencing a procurement
process, to consider
“how what is proposed to be procured might improve the economic, social
and environmental well-being of the relevant area, and how, in conducting
the process of procurement, it might act with a view to securing that
improvement”.
• Recent moves to share knowhow and good practice around the Act’s
impact on commissioning
• September 2014 - Government announced a review of the Act.
• Further changes to procurement likely due to changes coming from
Europe.

13. 2. Looking cross-border
• Scotland
– Office of the Scottish Charity Regulator (OSCR)
– Recent consultation on shortened annual return for English charities
registered with OSCR.
– Don’t forget requirements to get prior OSCR consent for certain changes
• Northern Ireland
– Charity Commission for Northern Ireland (CCNI)
– English charities operating in NI expected to be called forward for
registration in 2015/2016
• Republic of Ireland
– Charities Regulatory Authority (CRA)
– Opened 16th October 2014
– Registration of English charities expected in 2015

14. 3. Looking ahead…..
Charity law reform
• Law Commission project – consultation expected February 2015
• Reducing duplication for charitable companies – delayed because of
cost issues
• Self regulation of fundraising
– PwC report published
– Further Government review in 2017
Company law reform
• Small Business, Enterprise and Employment Bill

15. Thank you
Any Questions?

16. Christine Rigby
Bates Wells Braithwaite
2-6 Cannon Street
London EC4M 6YH
Tel: 020 7551 7712
Email: c.rigby@bwbllp.com
Web: www.bwbllp.com

17. What’s new in charity regulation
Nick Mott & Neal Green
Policy Team
NCVO / BWB Trustee Conference
10 November 2014

18. Charity regulation – what’s
changing and why?
• Trust and confidence still good BUT can’t be
taken for granted
• As regulator, we want to:
– Help trustees by more clearly explaining their role
and what we expect of them
– Protect charities more effectively against abuse
– Give the public the information they need

19. The changing ‘face’ of the
Commission: then…..
• Bullet 1
• Bullet 2
• Bullet 3
• Bullet 4

20. ……and now

21. New(ish): regulatory approach
• Bullet 1
• Bullet 2
• Bullet 3
• Bullet 4

22. Our regulatory statement – some
key phrases
• Compliance with legal obligations
• More rigour in holding charities to account
• Act robustly
• Uphold definition of charity
• Exploit data to identify risk
• Accurate register
• Accessible information

23. New on our website – registration
guidance
• Bullet 1
• Bullet 2
• Bullet 3
• Bullet 4

24. New on our website – operational
case reports
• Bullet 1
• Bullet 2
• Bullet 3
• Bullet 4

25. New (ish): conflicts of interest
guidance
• Bullet 1
• Bullet 2
• Bullet 3
• Bullet 4
* Checklist
* Case study
* Legal underpinning

26. Conflicts of interest –
three step action plan
• Identify
• Prevent
• Record

27. Talk of robust regulation is all very
well BUT
What are we doing about it?
More investigations and use of powers
Charities under inquiry
15
64
2012/13
2013/14
Use of powers
216
540
2012/13
2013/14

28. ..and what will help us in the
future?
Improved legal safeguards and powers
The draft Protection of Charities Bill
– widens automatic disqualification criteria
– Gives us powers to:
• Disqualify
• Remove
• Issue formal warnings
• Direct a charity to wind up
– But won’t become law this side of the General
Election

29. Coming shortly….AR15
New questions in the next Annual Return
• income from contracts / grants with the State
• policy on paying staff?
• review of financial controls?

30. Coming shortly…SORPs 2015
www.charitysorp.org

31. New SORP – clearer information

32. And finally …

33. The essential trustee – why update
it?
• Around for as long as the IPhone
• Published as a booklet
• New guidance:
• risk,
• decision making
• investment
• conflicts of interest
• Reading online is different
• CIOs now ‘mainstream’
• Commission’s new regulatory stance

34. The essential trustee – what’s new
• Better layout for reading online
• Plainer language
• Links to other guidance – less repetition
• Lessons from investigations – what can go
wrong and how to avoid it
• Emphasising that it’s for all charity trustees,
not just registered charities

35. Trustees’ role as described in the
new (draft) CC3
You must:
• Carry out your charity’s aims (or purposes)
• Obey your governing document and the law
• Act in the charity’s best interests
• Manage the charity’s resources responsibly
• Act with reasonable care and skill
You should:
• Make sure your charity is accountable
• Plan for the future
The guide is structured around these duties

36. Questions?
www.charitycommission.gov.uk
www.gov.uk
@ChtyCommission
NCVO / BWB Trustee Conference
10 November 2014