Charity Commission publishes new guidance for charities involved in litigation

25 August 2016

The Charity Commission has recently published new guidance, under the title, "Charities and Litigation: A Guide for Trustees". The guidance is Charity Commission publication CC38 (click here to view).

Legacy officers may find that the guidance is more general than they might have hoped. This is because it is intended to assist charities and charity trustees who are involved in any kind of litigation, not just legacy cases.

The guidance highlights that trustees have a general duty to act in the best interests of their charity, and this includes protecting and recovering assets belonging to the charity. A decision to begin or defend legal proceedings must be made in the best interests of the charity, and the charity must weigh up the risks and consequences.

The guidance confirms that all charities have the power to take or defend legal action, although charity trustees must act in the best interests of the charity when doing so. Trustees are strongly recommended to take and consider legal advice.

The guidance also encourages charities to resolve disputes by negotiation or mediation whenever possible, although charities need to remember that entering into a compromise is still subject to the duty of care which applies to all charity trustees.

Links are provided, within the guidance, to other relevant publications by the Charity Commission.

For the most part, the guidance refers to charity trustees making the decisions – and we would encourage charities who do not already have proper delegation arrangements in place to review the internal arrangements by which legacy officers are authorised to act on behalf of the charity.

For further information please contact any of the team at Wilsons.

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