DOCSLIB.ORG

20191120 Revised Thesis Keith Arrowsmith

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
20191120 Revised Thesis Keith Arrowsmith Governance Codes and Charity Law in England and Wales ARROWSMITH, Keith James Available from the Sheffield Hallam University Research Archive (SHURA) at: http://shura.shu.ac.uk/25603/ A Sheffield Hallam University thesis This thesis is protected by copyright which belongs to the author. The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author. When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given. Please visit http://shura.shu.ac.uk/25603/ and http://shura.shu.ac.uk/information.html for further details about copyright and re-use permissions. Governance Codes and Charity Law in England and Wales Keith James Arrowsmith A thesis submitted in partial fulfilment of the requirements of Sheffield Hallam University for the degree of Master of Laws by Research October 2019 DECLARATION I hereby declare that: 1 I have not been enrolled for another award of the University, or other academic or professional organisation, whilst undertaking my research degree. 2 None of the material contained in the thesis has been used in any other submission for an academic award. 3 I am aware of and understand the University’s policy on plagiarism and certify that this thesis is my own work. The use of all published or other sources of material consulted have been properly and fully acknowledged. 4 The work undertaken towards the thesis has been conducted in accordance with the SHU Principles of Integrity in Research and the SHU Research Ethics Policy. 5 The word count of the thesis is 29,878 words. Name Keith James Arrowsmith Date October 2019 Award Master of Laws by Research Faculty Faculty of Social Sciences and Humanities Director(s) of Studies Dr James Marson SFHEA 1 ABSTRACT A thesis to consider whether the development of voluntary governance codes of practice for the registered charity sector in England and Wales has had any material effect on charity law. The thesis reviews the development of the codes since their first publication in 2005, and how they relate to the legal duties of charity trustees, primary legislation that applies to charity governance, the regulators of the registered charity sector, and relevant case law. It also looks forward to potential changes in the law and the codes in the near future. Good governance has been codified in the corporate sector but remains voluntary for charities. With public trust in charities remaining steady at a historic 2016 low point, the codes of practice could be a mechanism to measure and evidence good governance, and to provide charity trustees with certainty that they have fulfilled their duties. The thesis considers what amounts to governance, and how governance relates to the charity trustees’ legal duties and obligations. It reviews the evidence that the codes have been used by legislators, regulators and the judiciary. The thesis concludes that voluntary codes of practice have made little difference to date and suggests that the codes are not seen as a necessary tool for good charity governance. 2 CONTENTS DECLARATION .................................................................................................................. 1 ABSTRACT ........................................................................................................................ 2 CONTENTS ....................................................................................................................... 3 PREFACE .......................................................................................................................... 7 Chapter 1 Introduction .............................................................................................. 8 1.1 Introduction to charity governance ................................................................. 8 1.2 Objective ........................................................................................................ 11 1.3 Methodology ................................................................................................. 11 1.4 Structure ........................................................................................................ 12 1.5 Limitations ..................................................................................................... 12 Chapter 2 Governance Codes and the Duties of Trustees ......................................... 14 2.1 Introduction ................................................................................................... 14 2.2 Charity trustees ............................................................................................. 14 2.3 Purpose of codes of practice ......................................................................... 17 2.4 The Governance Codes .................................................................................. 18 2.5 Other codes of practice for charitable activities ........................................... 22 2.6 Other codes of practice for parts of the charitable sector ............................ 24 2.7 Quality Standards .......................................................................................... 24 2.8 Conclusion ..................................................................................................... 25 Chapter 3 The Governance Code and Legislation ..................................................... 27 3.1 Introduction ................................................................................................... 27 3.2 The Charities Act 2006 ................................................................................... 27 3.3 The Charities Act 2011 ................................................................................... 32 3.4 Charities (Protection and Social Investment) 2016 ....................................... 32 3.5 The Companies Act 2006 ............................................................................... 36 3 3.6 Other Statutes ............................................................................................... 37 3.7 Local Acts ....................................................................................................... 37 3.8 Secondary Legislation .................................................................................... 37 3.9 Conclusion ..................................................................................................... 37 Chapter 4 The Governance Code and Regulators ..................................................... 39 4.1 Introduction ................................................................................................... 39 4.2 The Commission as a source of guidance ...................................................... 40 4.3 The Commission as regulator: Reports .......................................................... 44 4.4 The Commission as regulator: Inquiries ........................................................ 47 4.5 The Commission as regulator: Interim Managers .......................................... 51 4.6 The Commission and Official Warnings ......................................................... 51 4.7 The Commission and trustee disqualification ................................................ 54 4.8 The Commission and annual reports and accounts ....................................... 54 4.9 The Fundraising Regulator ............................................................................. 55 4.10 The Information Commissioner’s Office ........................................................ 59 4.11 HMRC and the Fit and Proper Person test ..................................................... 61 4.12 Conclusion ..................................................................................................... 63 Chapter 5 The Governance Code and Case Law ........................................................ 64 5.1 Introduction ................................................................................................... 64 5.2 Court cases and charitable proceedings ........................................................ 64 5.3 Cases that are not charity proceedings ......................................................... 66 5.4 Cases when the Commission refuses consent for charity proceedings ......... 68 5.5 Cases that amount to charity proceedings .................................................... 72 5.6 Governance and charity membership ........................................................... 80 5.7 Governance Codes and the Charity Tribunal ................................................. 81 5.8 Conclusion ..................................................................................................... 81 4 Chapter 6 The Governance Code and Reforming Bodies ........................................... 83 6.1 Introduction ................................................................................................... 83 6.2 The Cabinet Office ......................................................................................... 84 6.3 Select Committees ......................................................................................... 87 6.4 Office for Civil Society .................................................................................... 91 6.5 The National Audit Office .............................................................................. 92 6.6 The Law Commission ....................................................................................
Load more

Recommended publications
  • Charities Act 2006
    Charities Act 2006 CHAPTER 50 Explanatory Notes have been produced to assist in the understanding of this Act and are available separately £26·00 Charities Act 2006 CHAPTER 50 CONTENTS PART 1 MEANING OF "CHARITY" AND "CHARITABLE PURPOSE" 1 Meaning of “charity” 2 Meaning of “charitable purpose” 3 The “public benefit” test 4 Guidance as to operation of public benefit requirement 5 Special provisions about recreational charities, sports clubs etc. PART 2 REGULATION OF CHARITIES CHAPTER 1 THE CHARITY COMMISSION Establishment of Charity Commission 6 The Charity Commission Commission’s objectives, general functions etc. 7 The Commission’s objectives, general functions and duties CHAPTER 2 THE CHARITY TRIBUNAL 8 The Charity Tribunal ii Charities Act 2006 (c. 50) CHAPTER 3 REGISTRATION OF CHARITIES General 9 Registration of charities 10 Interim changes in threshold for registration of small charities Exempt charities: registration and regulation 11 Changes in exempt charities 12 Increased regulation of exempt charities under 1993 Act 13 General duty of principal regulator in relation to exempt charity 14 Commission to consult principal regulator before exercising powers in relation to exempt charity CHAPTER 4 APPLICATION OF PROPERTY CY-PRÈS Cy-près occasions 15 Application cy-près by reference to current circumstances 16 Application cy-près of gifts by donors unknown or disclaiming 17 Application cy-près of gifts made in response to certain solicitations Schemes 18 Cy-près schemes CHAPTER 5 ASSISTANCE AND SUPERVISION OF CHARITIES BY COURT AND COMMISSION Suspension or removal of trustees etc. from membership 19 Power to suspend or remove trustees etc. from membership of charity Directions by Commission 20 Power to give specific directions for protection of charity 21 Power to direct application of charity property Publicity relating to schemes 22 Relaxation of publicity requirements relating to schemes etc.
    [Show full text]
  • Charities Act 2011
    Changes to legislation: There are outstanding changes not yet made by the legislation.gov.uk editorial team to Charities Act 2011. Any changes that have already been made by the team appear in the content and are referenced with annotations. (See end of Document for details) Charities Act 2011 2011 CHAPTER 25 An Act to consolidate the Charities Act 1993 and other enactments which relate to charities. [14th December 2011] BE IT ENACTED by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:— PART 1 MEANING OF “CHARITY” AND “CHARITABLE PURPOSE” CHAPTER 1 GENERAL Charity 1 Meaning of “charity” (1) For the purposes of the law of England and Wales, “charity” means an institution which— (a) is established for charitable purposes only, and (b) falls to be subject to the control of the High Court in the exercise of its jurisdiction with respect to charities. (2) The definition of “charity” in subsection (1) does not apply for the purposes of an enactment if a different definition of that term applies for those purposes by virtue of that or any other enactment. 2 Charities Act 2011 (c. 25) Part 1 – Meaning of “charity” and “charitable purpose” CHAPTER 1 – General Document Generated: 2013-03-13 Changes to legislation: There are outstanding changes not yet made by the legislation.gov.uk editorial team to Charities Act 2011. Any changes that have already been made by the team appear in the content and are referenced with annotations.
    [Show full text]
  • Family Provision and Bequests to Charity in Wills
    QUT Digital Repository: http://eprints.qut.edu.au/ Hannah, Frances M. and McGregor-Lowndes, Myles (2008) From testamentary freedom to testamentary duty: Finding the balance. © Copyright 2008 Queensland University of Technology From testamentary freedom to testamentary duty: Finding the balance Working Paper No. CPNS 42 Frances Hannah and Professor Myles McGregor-Lowndes The Australian Centre for Philanthropy and Nonprofit Studies Queensland University of Technology Brisbane, Australia October 2008 This research is funded by the E F and S L Gluyas Trust and the Edward Corbould Charitable Trust under the management of Perpetual Trustees Company Ltd GPO Box 2434 BRISBANE QLD 4001 Phone: 07 3138 1020 Fax: 07 3138 9131 Email: [email protected] http://cpns.bus.qut.edu.au CRICOS code: 00213J The Australian Centre for Philanthropy and Nonprofit Studies (CPNS) is a specialist research and teaching unit at the Queensland University of Technology in Brisbane, Australia It seeks to promote the understanding of philanthropy and nonprofit issues by drawing upon academics from many disciplines and working closely with nonprofit practitioners, intermediaries and government departments. The mission of the CPNS is “to bring to the community the benefits of teaching, research, technology and service relevant to philanthropic and nonprofit communities”. Its theme is ‘For the Common Good’. The Australian Centre for Philanthropy and Nonprofit Studies reproduces and distributes these working papers from authors who are affiliated with the Centre or who present
    [Show full text]
  • Charities Act 1993 (Repealed)
    Status: Point in time view as at 01/07/2010. This version of this Act contains provisions that are prospective. Changes to legislation: There are currently no known outstanding effects for the Charities Act 1993 (repealed). (See end of Document for details) Charities Act 1993 1993 CHAPTER 10 An Act to consolidate the Charitable Trustees Incorporation Act 1872 and, except for certain spent or transitional provisions, the Charities Act 1960 and Part I of the Charities Act 1992. [27th May 1993] Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:— Modifications etc. (not altering text) C1 Act extended (1.10.1998) by 1992 c. 13, s. 22A(1)(2) (as added (1.10.1998) by 1998 c. 30, s. 41(2)) (with s. 42(8)); S.I. 1998/2215, art. 2 C2 Act modified (8.8.1998) by 1998 c. 31, s. 11, Sch. 1 para. 10 (with ss. 138(9), 144(6)); S.I. 1998/2048, art. 2 C3 Act excluded (1.9.1999) by 1998 c. 31, s. 23(3); S.I. 1999/2323, art. 2(1), Sch. 1 C4 Act amended (1.9.1999) by 1998 c. 31, s. 23(1)(2); S.I. 1999/2323, art. 2(1), Sch. 1 Act: power to modify conferred (2.4.2002) by 2000 c. 39, s. 7(2); S.I. 2001/766, art. 2(1)(a) (subject to transitional provisions in art.
    [Show full text]
  • Introduction
    1 Introduction It has been an interesting decade for charity law. A major piece of legislative reform was introduced in 2004 and then lambasted in 2013 as ‘ critically fl awed ’ and ‘ an administrative and fi nancial disaster ’ by the Public Administration Select Committee. 1 A newly formed Charity Commission (the Commission) came into existence in 2008 and was then castigated as ‘ not fi t for purpose ’ in 2014 by the Chair of the Public Accounts Committee. 2 Guidance on the public benefi t requirement was published by the Commission in 2008 and then completely replaced in 2013 after the Upper Tribunal (Tax and Chancery) (the Tribunal) subjected it to criticism and called it ‘ wrong ’ in places. 3 The Tribunal, for its part, had the opportunity to bring clarity and order to the disarray which had marked the early part of the new millennium, but instead delivered a judg- ment which has been widely criticised for its unfathomability and lack of a sound legal base. 4 And, although not normally a high profi le subject, charity law aroused strong public opinion and found itself in the headlines: ‘ Private schools are vic- tims of ‘ medieval ’ attack ’ , 5 ‘ Private schools win £ 100m charity tax relief case ’ 6 and ‘ Churches battle “ anti-Christian ” charity chiefs ’, 7 to name but a few. The reform in question was the new statutory defi nition of charity in the Chari- ties Act 2006 (the 2006 Act), which required a charitable institution ’ s purposes to be ‘ for the public benefi t ’ . 8 Whilst not a new requirement in itself, its statutory 1 The role of the Charity Commission and ‘ public benefi t ’ : Post-legislative Scrutiny of the Charities Act 2006 , Third Report of Session 2013 – 14 (TSO, June 2013) paras 92 and 86 respectively.
    [Show full text]
  • Charities Act 2011
    Changes to legislation: There are outstanding changes not yet made by the legislation.gov.uk editorial team to Charities Act 2011. Any changes that have already been made by the team appear in the content and are referenced with annotations. (See end of Document for details) Charities Act 2011 2011 CHAPTER 25 An Act to consolidate the Charities Act 1993 and other enactments which relate to charities. [14th December 2011] BE IT ENACTED by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:— Annotations: Modifications etc. (not altering text) C1 Act: functions transferred (9.11.2016) by The Transfer of Functions (Elections, Referendums, Third Sector and Information) Order 2016 (S.I. 2016/997), art. 10(2)(g) (with arts. 10(3), 11, 12) PART 1 MEANING OF “CHARITY” AND “CHARITABLE PURPOSE” CHAPTER 1 GENERAL Charity 1 Meaning of “charity” (1) For the purposes of the law of England and Wales, “charity” means an institution which— (a) is established for charitable purposes only, and 2 Charities Act 2011 (c. 25) Part 1 – Meaning of “charity” and “charitable purpose” CHAPTER 1 – General Document Generated: 2018-01-28 Changes to legislation: There are outstanding changes not yet made by the legislation.gov.uk editorial team to Charities Act 2011. Any changes that have already been made by the team appear in the content and are referenced with annotations. (See end of Document for details) (b) falls to be subject to the control of the High Court in the exercise of its jurisdiction with respect to charities.
    [Show full text]
  • USIG England and Wales- December 2017
    ENGLAND & WALES Current as of December 2017 Comments related to any information in this Note should be addressed to Mai El-Sadany. TABLE OF CONTENTS I. Summary A. Types of Organizations B. Tax Laws II. Applicable Laws III. Relevant Legal Forms A. General Legal Forms B. Public Benefit Status IV. Specific Questions Regarding Local Law A. Inurement B. Proprietary Interest C. Dissolution D. Activities E. Political Activities F. Discrimination G. Control of Organization V. Tax Laws A. Tax Exemptions B. Incentives for Philanthropy C. Value Added Tax D. Property Tax E. Other Tax Benefits F. Double Tax Treaty VI. Knowledgeable Contacts I. SUMMARY This report is limited to England and Wales. Scotland and Northern Ireland, the other two components of the United Kingdom, have separate legal systems. In the past, their provisions for regulating charities have differed significantly, but Scotland and Northern Ireland both now have similar regulatory regimes. A. TYPES OF ORGANIZATIONS England and Wales is a common law, non-federal jurisdiction with five primary forms of not-for-profit, nongovernmental organizations (NPOs): [1] Companies limited by guarantee (including community interest companies, or CICs); Unincorporated associations; Trusts; Registered societies (formerly known as industrial and provident societies); and Charitable incorporated organizations. An NPO that takes one of the above forms (excluding CICs) can qualify as a charity. A charity is eligible for significant tax benefits and, as discussed below, is subject to a series of regulations relevant to an equivalency determination. Other not-for-profit legal forms, which are outside the scope of this Note due to their limited interaction with U.S.
    [Show full text]
  • Queen's Or Prince's Consent
    QUEEN’S OR PRINCE’S CONSENT This pamphlet is intended for members of the Office of the Parliamentary Counsel. Unless otherwise stated: • references to Erskine May are to the 24th edition (2011), and • references to the Companion to the Standing Orders are to the Companion to the Standing Orders and Guide to Proceedings of the House of Lords (22nd edition, 2010). Office of the Parliamentary Counsel 19 December 2012 CONTENTS CHAPTER 1 INTRODUCTION CHAPTER 2 QUEEN’S CONSENT Introduction. 2 The prerogative. 2 Hereditary revenues, the Duchy of Lancaster and the Duchy of Cornwall, personal property and personal interests . 4 Exceptions and examples . 6 CHAPTER 3 PRINCE’S CONSENT Introduction. 7 The Duchy of Cornwall . 7 The Prince and Steward of Scotland . 8 Prince’s consent in other circumstances . 8 Exceptions and examples . 8 CHAPTER 4 GENERAL EXCEPTIONS The remoteness/de minimis tests . 9 Original consent sufficient for later provisions . 9 No adverse effect on the Crown. 10 CHAPTER 5 THE SIGNIFICATION OF CONSENT Signification at second or third reading . 11 Signification following amendments to a bill. 12 Signification at other stages. 13 Re-signification for identical bill . 13 The manner of signification . 13 The form of signification . 13 CHAPTER 6 PRACTICAL STEPS Obtaining consent. 15 Informing the Whips . 15 Writing to the House authorities . 15 Informing the Palace of further developments . 15 Other. 15 CHAPTER 7 MISCELLANEOUS Draft bills . 16 Consent not given. 16 Inadvertent failure to signify consent . 16 Consent in the absence of the Queen. 17 Consent before introduction of a bill . 17 Queen’s speech . 17 Royal Assent .
    [Show full text]
  • Charities Act 2011
    Page 1 Charities Act 2011 PART 4 REGISTRATION AND NAMES OF CHARITIES Names and working namesPower to require charity's name to be changed1 42 Power to require name or working name to be changed2 43 Duty of charity trustees on receiving direction under s 42 44 Change of name not to affect existing rights and obligations etc 45 Change of name where charity is a company 45A Power to delay registration following s. 42 direction3 45B Power to delay entry of name in register following a s. 42 direction4 PART 6 CY-PRÈS POWERS AND ASSISTANCE AND SUPERVISION OF CHARITIES BY COURT AND COMMISSION Cy-près powers and variation of charters 61 Duty of trustees in relation to application of property cy-près 62 Occasions for applying property cy-près 63A Failure of specific charitable purposes: application cy-près5 63 Application cy-près: donor unknown or disclaiming 64 Donors treated as unidentifiable 65 Donors treated as disclaiming 66 Section 63A: supplementaryUnknown and disclaiming donors: supplementary6 67 Cy-près schemes 67A Proceeds of fund-raising: power of trustees to apply cy-près7 68 Charities governed by charter, or by or under statute Powers of Commission to make schemes etc 69 Commission's concurrent jurisdiction with High Court for certain purposes 70 Restrictions on Commission's concurrent jurisdiction 1 Amended by Sch 3, para 30. 2 Amended by cl 27. 3 Inserted by cl 28. 4 Inserted by cl 29. 5 Amended by cl 6. 6 Amended by sch 3, para 13. 7 Amended by cl 7. Page 2 71 Exercise of Commission's concurrent jurisdiction: notice 72 Power to
    [Show full text]
  • Policy Change, Public Benefit, and the Charities Act 2006
    Policy Change, Public Benefit, and the Charities Act 2006 – A Case of the Emperor’s New Clothes? By Sarah Sophie Flemig A thesis submitted in conformity with the requirements for the degree of PhD in Political Science Department of Political Science University of Toronto © Copyright by Sarah Sophie Flemig 2015 Policy Change, Public Benefit, and the Charities Act 2006 – A Case of the Emperor’s New Clothes? Sarah Sophie Flemig Doctor of Philosophy in Political Science Department of Political Science University of Toronto 2015 Abstract This thesis analyses the policy-making processes leading to the Charities Act 2006 that introduced a renewed focus on the “public benefit” that charities need to provide. It addresses the empirical puzzle why a period of over 400 years of stability in the definition of charitable status ended in 2006 and what factors caused the charity reform that culminated in the 2006 Act. The discussion centres on the two most affected groups of charities, which are fee-charging education and healthcare charities. For this purpose, the thesis compares two radical change theories, i.e. punctuated equilibrium theory (Baumgartner et al., 2011) and path dependency (Pierson, 2000a), and evaluates how they perform against the alternative account of gradual transformation theory (Streeck and Thelen, 2005). Empirical evidence is presented for each of the key stakeholders, the government, the charitable sector, the legal community, and the media. Throughout, the thesis adopts an interdisciplinary multi-method research outlook, including a specifically designed survey, systematic review, statistical analysis, content analysis and archival research. These data are corroborated through in-depth elite interviews with key ii personalities who were involved in the charity policy reform process.
    [Show full text]
  • The Architecture of Charities' Commercial Activities
    Structures at the Seam: The Architecture of Charities’ Commercial Activities Comparative Panel: A View of Other Landscapes The UK: New Opportunities for Commercial Activity* Paper to be presented at the NCPL Annual Conference 23 October - 24 October 2008 Debra Morris Cayman Islands Law School [email protected] The legal structures at present used by charities include trusts, unincorporated associations and companies, the latter occasionally limited by shares but more usually limited by guarantee. Charities with certain specific objects can use the structure of an industrial and provident (community benefit) society or a friendly society. In addition, a charity may be a corporation established by statute,1 Church Measure2 or Royal Charter.3 The process of forming a charity has been rendered unnecessarily complex by the need for the promoters to consider the variety of structures available and then to select, and possibly adapt, the one that is most suitable to their particular objective.4 When it comes to undertaking commercial activities, the range of legal vehicles in England and Wales which charities and other social traders may use has increased in recent years. This paper will start with a brief description of the company limited by guarantee – hitherto the most appropriate structure for a charity conducting its own commercial activities. It will then describe the most common way in which charities have traditionally 1 See, e.g., National Trust Acts 1907 to 1971. 2 For example, Church Commissioners Measure 1947 (10 & 11 Geo 6 No.2). 3 Only 161 charities received a Royal Charter between 1518 and 2002. Strategy Unit, Private Action, Public Benefit: Charitable Incorporated Organisation, London: Strategy Unit, Cabinet Office, September 2002.
    [Show full text]
  • Charities Act 2006
    Status: Point in time view as at 01/04/2010. This version of this Act contains provisions that are not valid for this point in time. Changes to legislation: There are currently no known outstanding effects for the Charities Act 2006. (See end of Document for details) Charities Act 2006 2006 CHAPTER 50 An Act to provide for the establishment and functions of the Charity Commission for England and Wales and the Charity Tribunal; to make other amendments of the law about charities, including provision about charitable incorporated organisations; to make further provision about public charitable collections and other fund-raising carried on in connection with charities and other institutions; to make other provision about the funding of such institutions; and for connected purposes. [8th November 2006] BE IT ENACTED by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:— PART 1 MEANING OF “CHARITY” AND “CHARITABLE PURPOSE” 1 Meaning of “charity” (1) For the purposes of the law of England and Wales, “charity” means an institution which— (a) is established for charitable purposes only, and (b) falls to be subject to the control of the High Court in the exercise of its jurisdiction with respect to charities. (2) The definition of “charity” in subsection (1) does not apply for the purposes of an enactment if a different definition of that term applies for those purposes by virtue of that or any other enactment.
    [Show full text]