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Lord Swinfen moved Amendment No. 89:

Page 9, line 3, at end insert—

"2CA SUITORS' FUND
There shall be a suitors' fund under the control of the tribunal and capped at £100,000 per year which shall be used to pay the costs of charities and other parties, but not those of the Charity Commission, to enable cases of public interest to be taken to the court."

The noble Lord said: Amendment No. 89 follows on naturally from the previous group of amendments. Although the Bill will ensure that charity law continues to have the flexibility to evolve over time through case law, steps must be taken to ensure that this happens in practice. As the noble Lord, Lord Phillips, said in relation to the previous group of amendments, there is remarkably little case law.

I suggest in the amendment that there should be a suitors' fund to enable charities, trustees or other parties to take appeal cases of public interest from the tribunal to court. I suggest that the fund should be capped at £100,000, although that may be a little on the low side. I have always found that lawyers charge very high fees—with one exception, of course.

The fund would be under the control of the tribunal. As I said, the development of charity law is at a snail's pace. It would be extremely useful to have a fund of this kind, which would probably produce benefit far disproportionate to the sums involved. I beg to move.

Lord Shutt of Greetland: This seems like a good idea but perhaps I might ask the noble Lord, Lord Swinfen, who will decide whether a case is of public interest?

Lord Swinfen: I think the answer is that it will be the Charity Commission with the tribunal. The fund will
 
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be under the control of the tribunal and it will have to authorise expenditure. However, I am open to suggestions on this. I am not a lawyer. I am a fairly humble individual most of the time and I am quite prepared to take advice on it. I shall be interested to hear the Minister's response in due course.

Lord Borrie: There is a great deal to be said for the amendment of the noble Lord, Lord Swinfen. It has far more future in terms of reasonableness and the costs involved than the amendments which have just been proposed by the noble Lords, Lord Hodgson and Lord Phillips. I noticed during the course of that debate that neither they nor the Minister referred to the costs of, or who was to pay for, these references by the Attorney-General or the Charity Commission to the tribunal to get the law clarified. Someone has to provide the lawyers to present the arguments, and the tribunal itself will have costs in hearing those arguments, but neither of the sponsors of the earlier amendments mentioned them.

I am sorry to refer back to those amendments but we are trying to get an answer to the real life anxiety of whether a certain kind of project is or is not charitable. The Charity Commission, in particular, and perhaps the Attorney-General, will want an answer to that, but someone has to pay the costs involved in getting that answer, however it is done. It seems to me somewhat more suitable that there should be a fund available and a proper case brought, and so on, than the methods proposed in the previous amendments.

Baroness Howe of Idlicote: I agree with what has been said and support the amendment. It becomes clearer and clearer that there is a need for such a sum of money to be available where charities cannot individually afford to go further and a kind of class action is necessary. I would suggest that the fund should not be in the hands of the Charity Commission but should be managed by the appeals tribunal itself.

Certainly the case outlined by my noble friend Lord Best has sharply focused our minds on the need for a provision such as this in the Bill.

Lord Phillips of Sudbury: As I said earlier, I am sympathetic to the amendment of the noble Lord, Lord Swinfen. The costs cap of £100,000 a year could be exhausted by a major case, especially as there would be a strong likelihood of an appeal by either party to the High Court.

In response to the noble Lord, Lord Best, I say that the advent of the tribunal has all kinds of virtues. However, we should not deceive ourselves about the question of costs before the tribunal. The costs are in the lawyers, and the legal argumentation before the tribunal will be exactly the same as that before the High Court. Frankly, I do not think that big cases of charitable status will be much different.

I come back to the thought, reverting to what the noble Lord, Lord Borrie, said, that it is entirely proper that the Charity Commission and/or the Attorney-General, depending upon who is making the reference,
 
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should bear the costs of that reference. That will be a part of their funding requirements and will be dealt with in the normal way.

If it is said that it is an awful lot of taxpayers' money to invest in such legal escapades, my answer is very simple. The charity sector is bigger than the motor industry and bigger than the agriculture sector. It is an enormous, hugely important part of our national life. Given that this is a common law system which we all applaud, I think that money spent on deciding these few cases—and it will be only a few—in order to clarify and give shape and more certainty to key aspects of charity law, will be money extremely well spent.

I say that advisedly because I realise that most of the costs will go to the lawyers concerned. Frankly, however, this is one area of life where there is no way of avoiding that. It is crucial that we move on in terms of the clarity, evolution and modernity of charity law.

Lord Bassam of Brighton: It has certainly been an interesting debate. At the moment, Charity Commission decisions can be challenged only through the High Court. But it is interesting that the Strategy Unit concluded that, because the process of taking the commission to court is costly, time consuming and daunting, there was a perception that the commission was virtually unchallengeable in practice. That has meant that people affected by Charity Commission decisions had no realistic recourse to action against it.

At the outset the Strategy Unit considered two alternative proposals as a means of addressing that problem. The first was to create a new tribunal to hear appeals against commission decisions—the tribunal, for reasons which we went over earlier, being a much cheaper, quicker, and, to use the expression of the noble Lord, Lord Phillips, user-friendly option than the court.

The second proposal was to follow the course suggested by the noble Lord, Lord Swinfen, and to create a suitors' fund, which would essentially be a pot of money to pay the costs of people or charities who could not afford to bring an appeal to court but where the outcome of the case would be in the public interest. An example of that might be a particularly complex case involving an issue that could have wider significance for a range of organisations—for example, how one of the charitable purposes is defined.

The Government believe that the creation of the tribunal will improve the commission's accountability more effectively than establishing a suitors' fund. Of course, the amendment seeks to establish a fund in addition to the tribunal. However, we believe that the streamlining of the Charity Commission's decision review procedure to a single stage, and the creation of an independent tribunal to consider appeals, will enable smaller charities to launch effective and less expensive challenges against the commission's decisions.

We accept that there might be a small number of cases in which the issues are of clear public interest, such as the example I gave earlier, where the issues are so complex that only a lawyer could be expected to represent them effectively. In some of those cases the
 
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appellant might not have the resources to engage legal representation. I agree with the noble Lord, Lord Phillips, in his estimate that there will probably be only a very small number of cases of that nature in any given year. We intend that the Attorney-General will be copied into all cases being presented to the tribunal, and we believe that in such cases he might want to exercise his power to be a party to the proceedings and to argue them before the tribunal. In that instance, it would relieve the appellant of much of the cost of engaging legal representation.

It is also the case that the Legal Service Commission is able to grant exceptional funding for legal representation before a tribunal in certain cases. While exceptional funding is rare and applications are means and merit-tested, a common reason for granting funding is because a case is in the public interest or is a test case.

I could see the justification for a suitors' fund if, as now, the cost of bringing an appeal was, in practice, a real disincentive even to appellants who have a respectable case. The introduction of the tribunal would significantly reduce the cost of bringing an appeal as compared with the cost of appealing to the High Court under the present arrangements. We do not, therefore, believe that a suitors' fund to take cases of public interest to the High Court will be necessary for the reasons I have outlined. Therefore, I hope that the noble Lord will withdraw his amendment.

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