As in other organisations, charities and charity trustees can both end up in court.

You may find yourself on the receiving end of someone else’s claim.  But what if you are considering taking your case to court?

Disputes with third parties

Your charity’s disputes may be:

• contractual issues with suppliers
• employment issues
• boundary disputes
• regaining legal possession of a property
• contesting a charity’s right to property under a will
• actions for personal injury
• a multitude of other possible issues

The charity commission has guidance for charity trustees who are contemplating third-party litigation.

Internal disputes

But, unfortunately, disputes and differences can also arise within charities. For example:

• the removal of one of your trustees from office
• an action for breach of trustee duty
• challenging a trustees’ decision about how to run your charity
• whether your charity’s AGM has been properly conducted
• whether your charity’s trustees have been properly appointed
• internal disputes about the control or misuse of your charity’s property or resources

And in these situations, your options may be more limited…

Special rules for charities

In commercial organisations, shareholders and commercial partners are free to fight out their internal disputes in court and to spend their own money on lawyers if that is their choice.

But not so for charities.

Charities are subject to special rules. In some cases these effectively deprive you of judicial remedies others take for granted, such as the right to apply for an injunction. Or, at least make those remedies much less accessible to your charity.

Charity Commission’s consent

If your charity’s dispute is internal it is classed as “Charity Proceedings”and special rules apply. You are not allowed to bring Charity Proceedings to court unless you have the prior permission of the Charity Commission.

This follows the principle that charity resources should not be frittered away on proceedings about the internal administration of your charity.

Your responsibilities as a trustee

This rule also reflects two of your six main responsibilities as a charity trustee, to ensure you are acting in your charity’s best interests and that you manage your charity’s resources responsibly.

Get some help

Resolving charity disputes is one of the most difficult of all trustee responsibilities.

It is familiar territory for me so why not contact me for an initial free consultation?

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Geoffrey Hand

Geoffrey Hand is a charity governance consultant, offering governance consultancy and training. He also provides legal services management, helping charities get better value for money from their lawyers. Geoffrey has extensive experience in the charity and legal worlds, and his mission is to help charities deliver good governance.

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