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Lord Hodgson of Astley Abbotts: The Minister has certainly made all the right noises, and they were handsome indeed, so I am grateful to him. If the Charity Commission can follow through the sorts of lines of endeavour that the Minister described, clearly it is moving towards what supporters of the amendment wish to see. I am grateful to Members of the Committee who have spoken in support of it.
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I shall withdraw the amendment, talk to people outside to see whether there really is a move in the real world as opposed to the Moses Room, and return to the matter if we feel that there has not been enough progress among those involved in the practice in the world outside. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Phillips of Sudbury moved Amendment No. 73:
The noble Lord said: I hope to deal with this amendment very swiftly. We are still on this crucial Clause 7, which incorporates into the Charities Act 1993 a description of the objectives, general duties and functions of the Charity Commission. The last part of the new clause, new section 1E, states that the commission shall have incidental powers. The first of those powers reads as follows:
"The Commission has power to do anything which is calculated to facilitate, or is conducive or incidental to, the performance of any of its functions".
It struck me as odd that that incidental power should apply only to performance of functions and have no reference to the objectives or duties. My amendment is designed to pull those in, leaving the subsection drafted as follows: "The Commission has power to do anything which is calculated to facilitate, or is conducive or incidental to, the achievement of its objectives—that is one addition—or the performance of any of its functions and duties". It seems a useful amendment; I hope that the Government will think so, too. I beg to move.
Lord Borrie: On Amendment No. 74, why cannot one say that the word "functions" implicitly includes the duties of the commission?
Lord Phillips of Sudbury: Functions are very distinct from duties in this clause. Functions are dealt with in new section 1C; duties are dealt with in section 1D; and objectives are dealt with in section 1B.
Lord Bassam of Brighton: The noble Lord, Lord Phillips, finds it odd that the Bill does not work in the way that he suggests. On reflection, we think it rather odd as well, so I am grateful to the noble Lord for tabling the amendment and making his highly relevant comments. We wish to consider the amendment further with a view to tabling an amendment on Report if we think it appropriate. No doubt we will liaise with the noble Lord to ensure that it satisfies the spirit of his suggestion.
Lord Phillips of Sudbury: I am grateful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 74 and 75 not moved.]
Clause 7, as amended, agreed to.
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5.15 p.m.
Clause 8 [The Charity Appeal Tribunal]:
Lord Swinfen moved Amendment No. 76:
"( ) The Tribunal shall have the two general roles of considering cases of points of charity law and considering claims for compensation against the Charity Commission for disproportionate, unfair or unreasonable behaviour."
The noble Lord said: In moving this amendment I shall speak also to my Amendment No. 102. We now move on to deal with the Charity Appeal Tribunal. The amendment is designed so that the tribunal should have power to award full compensation to a charity, trustee, donor, beneficiary or other interested party who has suffered financial loss as a result of the Charity Commission acting disproportionately, unfairly, unreasonably or otherwise unlawfully.
In particular, the Charity Commission must be willing to act against its own receivers and managers where disproportionate, unfair or unreasonable behaviour amounts to a breach of trust. The Government have said that they wish to rely on the Independent Complaints Reviewer and the Parliamentary Ombudsman to make restitution for financial loss.
However, the Government have failed to understand the real situation. The Independent Complaints Reviewer's brief excludes her from recommending compensation for financial loss. She can make recommendations of up to £5,000 only for consolatory payments but nothing else. The ombudsman has repeatedly refused to take cases until they have been through the High Court, in spite of the fact that the rules of the court tilt the balance so heavily against a complainant that only a fool would take a case there.
For example, a charity must bring the commission to court to have the court force the commission to issue the certificate that enables the charity to bring the commission to court for the substantive issue. When the commission eventually comes to court, it chooses not to appear itself but to send in the Attorney-General and the Treasury Solicitor, with all the costs implications for the complainant if it loses. In the Little Gidding Trust case the court refused to consider the behaviour of the commission, despite the fact that it had already identified it as the main issue. I am told that the Court of Appeal chose not to reverse that denial of justice. I beg to move.
Lord Phillips of Sudbury: The noble Lord, Lord Swinfen, has tabled a number of amendments that touch on the same broad issue. I have considerable sympathy with their aim but will listen attentively to the Government's response.
Lord Bassam of Brighton: I thank the noble Lord, Lord Swinfen, for tabling the amendment. I wish to introduce the Bill's provisions on appeal tribunals, as it is an important innovation. I shall first speak generally and then respond in detail to the issues touched on in the amendments.
Going back in time, the Strategy Unit review recommended that an independent tribunal should be established to hear appeals against the legal decisions of
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the Charity Commission. It found that there was a perception that taking appeals to the High Court involved undue expense and delays, which meant that the Charity Commission was virtually unchallengeable in practice. There is very strong support for the introduction of the tribunal in the charity sector. I understand that some 92 per cent of the respondents who commented on the recommendation were very much in favour of it.
The Government believe that tribunals will provide charities and trustees with a less expensive and less formal means of challenging the legal decisions of the Charity Commission. It should be an avenue of appeal of first resort, and in the vast majority of cases appellants could represent themselves if they so chose. I emphasise that the tribunal is not for challenging the case-handling or other administrative decisions of the commission or for complaints about standards of service. Those will be in the territory of the ombudsman rather than the tribunal.
We have listened very carefully to the views of stakeholders in developing the proposals for the tribunal, particularly its remit.
I am sure that it will not have escaped noble Lords' notice that the remit of the tribunal has considerably expanded since the publication of the draft Bill, including appeals against decisions of the Charity Commission in relation to public collection certificates. The estimate is that the range of cases has probably been doubled in general terms by the expansion of the tribunal's remit.
In creating the tribunal we have also sought to retain the expertise of the Attorney-General in matters related to charities. We very much welcome his continued interest and involvement. He will retain a right of appeal both to and from the tribunal as well as being able to be a party to the proceedings or to argue a case before it. Of course, much of the detail of the workings of the tribunal will be dealt with through the Lord Chancellor's rules. I assure noble Lords that work on those will begin at an early stage and that they will be subject to consultation with stakeholders. I am sure that that will include and want to draw on the experience of many Members of the Committee who have an interest and a wish to be involved in that consultation. The rules will be laid before Parliament and subject to the usual negative resolution procedure.
We believe that the tribunal will become an effective mechanism for dealing with appeals against Charity Commission decisions, and, like everyone else in this field, we want to make it work. But we will, of course, listen very carefully to comments made by noble Lords throughout the debate on the amendments before us today.
I shall now comment on the detail of Amendment No. 76. We believe that the tribunal should be able to award costs against the Charity Commission, limited to where the tribunal considered that the relevant commission decision, direction or order was unreasonable or where it considered that the commission had acted vexatiously, frivolously or unreasonably.
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The amendment would widen the remit of the tribunal so that it could consider claims for compensation where the Charity Commission had acted disproportionately, unfairly, unreasonably or unlawfully. However, the amendment would enable the tribunal to consider whether compensation should be payable as a result of maladministration on the part of the commission. It is not appropriate for the tribunal to consider complaints of this nature, as its remit is to consider appeals against the commission's substantive decisions.
That does not mean that appellants would be prevented from pursuing a complaint about maladministration. Those complaints already fall within the remit of the commission's own established internal complaints procedure, the Independent Complaints Reviewer and the Parliamentary Ombudsman. The Independent Complaints Reviewer has the power to recommend that the commission make what is described as a consolatory payment in recognition of anxiety and distress caused by maladministration, although I understand that she has no power to recommend payment of a specific amount in respect of financial loss. However, in appropriate circumstances, she could recommend that the commission consider this. As I understand it, the commission has never yet refused a recommendation from the Independent Complaints Reviewer to make a consolatory payment.
Complainants are not required to use the Independent Complaints Reviewer's service and could instead seek a referral to the Parliamentary Ombudsman. There are no restrictions on the Parliamentary Ombudsman in recommending compensation for actual financial loss, save that she would have to be satisfied that the loss resulted from maladministration on the commission's part.
I hope that the noble Lord will accept that it is not appropriate for the tribunal to consider complaints of maladministration. I therefore invite him to withdraw his amendment.
I should add that I have details of the commission payments, which I described, for poor service standards. As I understand it, in the past 12 months the commission has paid or offered consolatory payments of approximately £1,500 to six clients, and compensation payments totalling approximately £11,000 to a further six clients. There are cases where that has happened. They are made on the basis of internal investigation and review and the activities of the Parliamentary Ombudsman. So the commission is not closed to making compensation payments. I hope that my explanation will satisfy the noble Lord.
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