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Lord Hodgson of Astley Abbotts: It was a handsome invitation by the Minister for us to bring to him specific examples where we felt that the present drafting of the Bill would not meet the case. I do not wish to pretend that my technical knowledge takes me any further on this matter. I can feel the ice cracking beneath my feet even as I talk. Christopher McCall will need to be asked whether we can produce anything further that would be of value to the Minister in consideration of further drafting. But meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Phillips of Sudbury moved Amendment No. 87:
Page 8, line 24, after "proceedings" insert "or the manner of the Commission's dealings with the same"
The noble Lord said: The amendment goes back to the issue of costs. It would allow costs to be awarded by the tribunal where the commission was not merely unreasonable in the decision, direction or order that it reached, but in,
This is aimed at the prelude to the decision, rather than the mere decision itself. I do not mean "prelude" in the way that the case was conducted before the tribunal, but in terms of the dealings between the commission and the particular charity before the matter was ever referred to the tribunal.
I am considering what I agree and hope would be a rare case where, although the commission's decision, direction or order was upheld, it was of the view that the manner in which it handled the whole business prior to the reference to the tribunal was unreasonable to the point where the tribunal felt that the commission should pay the other party's costs or part of them.
If the Minister can tell me that subsection (5) deals with this matter in any event, then I shall be more than happy to withdraw the amendment. Subsection (5) is broader and states that if the tribunal,
"considers that a party to proceedings before it has acted vexatiously, frivolously or unreasonably",
without any restriction on how that party has acted unreasonably, the tribunal may order costs, as it thinks fit.
My question for the Minister is therefore this: does subsection (5) cover the scenario at which I am aiming? Does it mean that the tribunal could take the view that the commission's performance in relation to a matter that was ultimately brought to the tribunal was so parlous, so unreasonable, that it is entitled to award costs, whether in whole or part, to assist the charity that has been damaged, if I may use that word, by the unreasonable behaviour? I beg to move.
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6.30 p.m.
Lord Bassam of Brighton: The short and correct answer to the question is "no".
I cannot be very helpful here because the effect of the noble Lord's amendment would be to widen the scope of the tribunal's jurisdiction by giving it the power to award costs where it considered, as the noble Lord argued, that the Charity Commission had acted unreasonably in its dealings in relation to the decision subject to appeal, as opposed to limiting the award of costs to where it considered that the relevant decision was unreasonable. Of course, costs could also be awarded against the Charity Commission where the Charity Appeal Tribunal considered that it had acted unreasonably in relation to proceedings before it.
We agree that it is correct for the Charity Appeal Tribunal to consider whether the decision subject to appeal was unreasonable. After all, the appeal and the resulting costs would not have been necessary had it not been for that decision. However, we do not believe it is appropriate for the tribunal to consider whether the Charity Commission had acted unreasonably in its handling of that decision as that would amount to maladministration.
As I argued on an earlier amendment, issues of maladministration are not best dealt with in the forum of the tribunal; they are best left where they should properly be, and that is with the independent complaints reviewer or the parliamentary ombudsman. That is where the expertise on maladministration, poor process and so on, and an understanding of such issues, rests.
What then happens with a ruling or a guidance given by an ombudsman, of course, is very much a matter for the commission itself to consider. As I said earlier, the commission has a very good track record in dealing with cases referred to it by the reviewer and the ombudsman.
Having heard that explanation, I am sure that the noble Lord will not be too happy because subsection (5) does not help him with his argument.
Lord Phillips of Sudbury: I am grateful to the Minister for being so briefly frank about the unavailability of subsection (5) to deal with my concern. It brings me back to the general proposition that costs are a huge deterrent to charities. Unfortunately, the experience is that even though the lawyer will say to the charity, "Look, I am confident that you will succeed in this matter", it will say, "But what if you do not?". You have only then got to say that it will cost a four-figure and sometimes a five figure sum for the most frightened trustee to rule the roost.
Before I leave the amendment, is the Minister saying with regard to subsection (5) that the ability of the tribunal to award costs to a party to proceedings is limited to vexatious, frivolous or unreasonable conduct in the course of those proceedings? It may not be fair to expect an instant answer to the question—I shall be quite content if it comes later—but it would help the Committee to know that.
Lord Bassam of Brighton: It is fair that I should make clear and put on the record that, yes, it is to deal
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with vexatious, frivolous and unreasonable action. The noble Lord probably sees that as being too restrictive, but it is the right approach.
Lord Phillips of Sudbury: Does the Minister mean "yes" in relation to the proceedings only?
Lord Phillips of Sudbury: I am grateful for that confirmation. I shall read carefully what the Minister has said. I have a feeling on behalf of all those who have brought forward amendments vis-à-vis costs that we may need to regroup, reconsider and come back. At this juncture, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hodgson of Astley Abbotts moved Amendment No. 88A:
"( ) In addition to the appeals and applications which may be made to the Tribunal pursuant to the provisions of Schedule 4 to this Act, the Attorney General or the Commission may of their own volition refer to the Tribunal such issues relating to the application of the law to charities as they may consider should be reviewed and determined by the Tribunal."
The noble Lord said: The amendment seeks to insert a new subsection into the proposed new section 2B, "Practice and procedure" of the Charity Appeal Tribunal, in Clause 8.
In their response to the Joint Committee report, the Government indicated that they agreed that the Attorney-General should be able to refer matters to the Charity Appeal Tribunal, but did not comment on the Joint Committee's recommendation that the Charity Commission should also have such an ability. We argue that the role of the tribunal could be usefully expanded to give both the Attorney-General and the commission the power to decide of their own volition to have matters, whether specific or generic, referred to the tribunal for interpretation in the public interest.
A situation might arise where the commission sees a strand of cases which on their own might not individually lead to referrals to the tribunal but where collectively it would be helpful to have the general principles reviewed in order to assist in the development of charity law.
Recent examples of situations where it might have been helpful for the commission to have such a tribunal to which it could have referred such cases include the review by the commission of whether amateur sports clubs could or should qualify for charitable status. The commission had to wait to deal with that issue until a suitable test case became available.
In this way it would be possible for the commission or the Attorney-General to be proactive in using the resource of the tribunal and to give it an important role in the continuing development of charity law, rather than simply waiting for appeals to be made to it against specific decisions. Rather than have this power contained in the regulations for the tribunal to be made by the Lord Chancellor, we believe that it is of sufficient importance to have the general principle
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inserted into the Act, with any necessary procedural and other details included in the regulations. I beg to move.
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