Independent Schools Council v Charity Commission for England and Wales [2011] UKUT 421 (TCC)
| Date | 01 July 2012 |
| Author | Mary Synge |
| Published date | 01 July 2012 |
| DOI | http://doi.org/10.1111/j.1468-2230.2012.00917.x |
Independent Schools Council vCharity Commission for England
andWales [2011] UKUT 421 (TCC)
Mary Synge*
This note provides a critical analysis of the Upper Tribunal’s decision and questions its proposed
application and legal justification.The author suggests that the Upper Tribunal has introduced a
third sense of public benefit and that this relies upon a circular rationale which is informed by
policy rather than law.
INTRODUCTION
On 14 October 2011, the Upper Tribunal (Tax and Chancery) (the Tribunal)
published its decision in judicial review proceedings brought by the Inde-
pendent Schools Council (ISC).1These proceedings challenged guidance,
published by the Charity Commission (the Commission), concerning the
public benefit requirement under the Charities Act 2006 (the Act2).The parties
had not agreed upon whether, and if so to what extent, fee-charging schools
were legally required to extend opportunities to people unable to afford their
fees.
The ISC claimed victory and was assured of some relief, but the Commission
also celebrated the Tribunal’s confirmation of its inter pretation of the law on the
‘key issues’.3Did the decision really achieve a win-win result and was this its
purpose?
The public benefit requirement
In order to be a charity,an institution must be established exclusively for certain
purposes which are ‘for the public benefit’.4‘Public benefit’ has the meaning
attributed to it in case law5and is not to be presumed.6In published guidance for
charity trustees, in which it sought to explain the public benefit requirement,the
Commission included two principles which the ISC claimed were erroneous in
*LLB, Solicitor,Associate Teacher and PhD student, University of Bristol.
1Independent Schools Council vCharity Commission for England and Wales [2011] UKUT 421 (TCC);
the decision is dated 13 October 2011. References to paragraphs are to this decision, unless
otherwise stated.
2 References to section numbers are to sections of the Act,unless otherwise stated.
3 http://www.charitycommission.gov.uk/RSS/News/pr_upper_tribunal.aspx (last visited 21
December 2011).
4 section 2(1); the purposes must be within the list of charitable purposes in section 2(2) which, as
the Tribunal notes, reflects the accepted heads of charity prior to the Act.
5 section 3(3).
6 section 3(2).
bs_bs_banner
Public Benefit in Charity
© 2012 TheAuthors. The Modern Law Review © 2012The Modern Law Review Limited.
624 (2012) 75(4) MLR 606–654
law.7Principle 2b stated that ‘where benefit is to a section of the public, the
opportunity to benefit must not be unreasonably restricted . . .by ability to pay
any fees charged’.8Principle 2c added that ‘people in poverty must not be
excluded from the opportunity to benefit’.
The proceedings
The ISC sought judicial review and an order to quash parts of the guidance.The
Attorney-General also submitted a Reference,seeking clar ification as to whether
the public benefit requirement was met in a series of hypothetical scenarios.9
Both applications were heard by theTribunal in May 2011.Mr Justice Warren sat
with Judge Alison McKenna, originally President of the Charity Tribunal,10 and
Judge Elizabeth Ovey.
TheTribunal ruled that a duty to extend benefits to those unable to afford fees
did exist, but that the nature and extent of those benefits was a matter for the
trustees’ discretion, and not for the Commission. Consequently, it declared
principles 2b11 and,‘at least as explained in the Guidance’, 2c to be ‘wrong’12 and
ordered the parties to agree what relief should be afforded to the ISC.13 No
agreement having been reached, the Tribunal released a further decision, on 2
December 2011, in which it identified those parts of the guidance which should
be quashed, unless withdrawn by the Commission.These were all references to
principle 2b14 and those parts which sought to explain principle 2c (but not the
principle itself).15
7 The guidance considered in these proceedings is found in three publications:Char ities and Public
Benefit – the Charity Commission’s General Guidance on Public Benefit (January 2008); Public Benefit
and Fee-Charging (December 2008) and The Advancement of Education for the Public Benefit (Decem-
ber 2008).The Emerging Findings report, following the Commission’s public benefit assessments of
existing charities, including five independent schools, appears to lie outside the scope of the
proceedings at [27].
8 Principle 2b also disallows unreasonable restrictions based on geographical and other criteria, but
the decision is limited to that part of principle 2b regarding fees.
9 In a reference submitted pursuant to the Charities Act 1993, section 2A(4)(b) as amended.
10 The Charity Tribunal was abolished and its functions transferred to the First-tier and Upper
Tribunals pursuant to SI 2009/1834;Judge McKenna was previously employed as an in-house legal
adviser to the Commission (1997–2002), although, as a partner at Wilsons (solicitors), she also
represented Salisbury NHS FoundationTrust in a case against the Commission’s interpretation of
the public benefit requirement (on an application for registration by Odstock Private Care Ltd,
September 2007).
11 In relation to fees only.
12 at [235].
13 at [236].
14 In relation to fees only.
15 The decision of 2 December 2011 is available at http://www.judiciary.gov.uk/Resources/JCO/
Documents/Judgments/independent-schools-charity-commission-02122011.pdf (last visited 25
April 2012).The Commission subsequently withdrew the relevant guidance (including the whole
of the specific guidance, Public Benefit and Fee-charging), on 21 December 2011.The impact on the
general guidance presumably means that the first decision can no longer be limited solely to
educational charities, as was intended (at [15]).
Mary Synge
© 2012 TheAuthors. The Modern Law Review © 2012The Modern Law Review Limited. 625
(2012) 75(4) MLR 606–654
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