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Lord Phillips of Sudbury: I shall read the noble Lord's words carefully and, for the time being, I beg leave to withdraw the amendment. I am obliged to him.
Amendment, by leave, withdrawn.
[Amendment No. 100 not moved.]
Lord Phillips of Sudbury moved Amendment No. 101:
The noble Lord said: The amendment deals again with the table to Schedule 4, particularly a class of decision, which may be appealed against to the tribunal, that is an order made by the Charity Commission under Section 73C(5) or (6) of the 1993 Act, which is to be found in Clause 35 of the Bill. That clause inserts into the Charities Act 1993 more protective provisions concerning the position of a trustee who is disqualified from receiving remuneration under the 1993 Act.
[The Sitting was suspended for a Division in the House from 3.44 to 3.55 p.m.]
Lord Phillips of Sudbury: This amendment again deals with the table to Schedule 4, setting out in column 1 the basis on which an appeal or review can be asked for; in column 2, those who may appeal or ask for a review; in column 3, the powers exercisable in response to the appeal or review. This is a particular addition to one of the many matters included in the table—specifically, that part of the table that deals with orders under Section 73C of the 1993 Act, which is referred to in Clause 36, in the context of changes in charity law vis-à-vis remuneration of trustees. The measures will be inserted into the Charities Act 1993 to make plain what is the new regime. Broadly, the new regime sanctifies the remuneration of trustees under carefully controlled circumstances.
Under Section 73C, the commission can disqualify someone from receiving remuneration and ask for remuneration to be reimbursed. The trustee affected by that can appeal to the tribunal. To get to the sharp end of the matter, the sole point of the amendment is that besides the trustee whose remuneration is to be taken away or reimbursed and besides,
we believe that the trustees of the charity concerned should be allowed to appeal against a tribunal decision. We believe that because, very often, trustees will have a strong view as to the circumstances in which the matter is dealt with by the tribunal and a strong view about the decision reached by the tribunal.
It seems natural and necessary that the trustees, having their own objective and considered view about the fairness or unfairness of the tribunal decision, should themselves be of the category of people who can bring an appeal or review. But as things stand, they are not in either the first or second category. It is of
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some importance that they should be allowed to present their reviews and request an appeal when necessary. I beg to move.
Lord Hodgson of Astley Abbotts: I have an amendment in this group, Amendment No. 159, which has as its purpose an objective very similar to that raised by the noble Lord, Lord Phillips, in moving his amendment. Indeed,
are mentioned in paragraph (b) of my amendment, and are the thrust of the noble Lord's remarks.
The amendment is not to Schedule 4, as is the noble Lord's amendment, but would introduce a new subsection (9) to Clause 35, on page 33 of the substantive Bill. The noble Lord has made his points on the matter. We do not object to the provisions of Clauses 34 and 35, which widen the definition to not only trustees but persons connected with trustees and provide for disgorgement for breach. We do not object to those. However, we are concerned that the draft Bill contained a provision in Clause 28(8), I think, that any trustee or person who was required to repay should have the right of appeal to the Charity Appeal Tribunal, and this provision has now been lost in the substantive Bill.
The Law Society has drawn our attention to that point and, indeed, has suggested that it is better to put the provision on page 33 rather than in the schedule. Far be it from me to decide exactly where the best place for it is. Obviously we are concerned about the omission and we understand that it could involve a breach of the provisions of the European Convention on Human Rights both as to deprivation of property and the right to be heard by a tribunal. If such a provision for an appeal is not retained, there is a risk that the commission's order will be incapable of challenge and the commission will be given an uncontrolled power. That would be most unsatisfactory.
While I entirely support what the noble Lord, Lord Phillips, said, Amendment No. 159 would reinsert the paragraphs in the draft Bill, ensuring the right of a trustee facing disqualification to appeal to the Charity Appeal Tribunal.
4 p.m.
Lord Bassam of Brighton: These amendments work together in the sense that they provide for "charity trustees" to be specified as persons eligible to appeal against an order of the Charity Commission requiring a charity trustee to repay any remuneration that he or someone connected with him has received from the charity or requiring the charity trustee or a person connected with him not to receive that remuneration.
I think that I indicated earlier that careful consideration had been given to rights to appeal in relation to orders, decisions and directions of the Charity Commission, and, as we commonly understand, the appellants in every case are provided at the table in Schedule 4.
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In dealing with the amendment, it may help if I explain a little more about why an order under Section 73C would be made in the first place. Under the provisions of the Charities Bill, a charity trustee would be disqualified from being involved in any decisions relating to the agreement between the charity and him or someone connected with him for the service provided to that charity. So, for example, a charity trustee who was a trustee of a village hall and a plumber would be disqualified from acting as a charity trustee in relation to any agreement made between him and the village hall for his services as a plumber. The Charity Commission would make an order requiring that disqualified trustee to repay some or all, or not to receive some or all, of the remuneration for a service which he provided only where it was satisfied that he had acted as a charity trustee in relation to the agreement when he was disqualified from doing so.
As currently drafted, the Charities Bill provides that the trustee or connected person and any other person affected by the order may appeal against an order under Sections 73C(5) or (6) of the 1993 Act. And so the right of appeal here already extends to the person subject to the order.
On the matter of conferring the right of appeal on the charity trustees, it is the duty of the charity trustees to act in the best interests of the charity. In most circumstances, we would argue that it would not be in the best interests of the charity for the charity trustees to oppose an order requiring someone to repay or not to receive remuneration from the charity. It might be the case that the charity trustees support the charity trustee in question, but it would be for the relevant charity trustee to submit the appeal and not the charity. If, in a particular case, the charity trustees had a legitimate interest in pursuing an appeal, they would in any event be able to do so as they would fall within paragraph (b), which refers to,
Having explained that, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Phillips of Sudbury: I am grateful to the noble Lord. As he said, the trustee whose remuneration is being interfered with has a specific right under the table to make an appeal. But I put this to the Minister. He said that the trustees of a charity in any particular circumstances may be any other person who is affected. However, with great respect, I do not think that that is consistent with the way in which the table is scheduled because many parts of the schedule have three categories of person. For example, the middle of page 85, just under the place where the amendment would be inserted, states that the persons who may bring the appeal are,
That is repeated all the way through, so there is a distinction in the Bill between a person affected and the charity trustees. With respect again, a great deal of
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importance would surely be attached to an order made by the Charity Commission for a trustee to repay, for example, a substantial amount of remuneration because the complicated provisions inserted by the Bill into the Charities Act had not been pursued.
The charity trustees may have a very particular point of view, in terms of the whole morale and functioning of their charity. I can imagine circumstances in which a trustee who was in the eye of that storm might well step back and say, "I absolutely refuse to take any steps to protect myself. That is not what I want to do or should do. It is inimical to my view of trusteeship". The trustees of the charity might be strongly of the view that the best interests of the charity have not been served by the order made by the Charity Commission, and thus might want to bring an appeal, largely because of the view taken by the individual trustee affected.
I would be grateful if the Government would review the matter. I see no reason at all why they should not add "the charity trustees", as they have done in so many of the other appeal rights. That would overcome the circumstances about which I am speculating.
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