Independent Schools Council v Charity Commission [2021] Ch 214

Facts

  • The case involved the Independent Schools Council (ISC) challenging the Charity Commission’s guidance regarding public benefit under Section 4 of the Charities Act 2011.
  • The central dispute was whether independent schools that charge high fees can meet the public benefit requirement needed for charitable status.
  • The ISC argued that the Charity Commission’s guidance imposed obligations on fee-charging schools that exceeded statutory requirements.
  • The Court of Appeal was tasked with interpreting Section 4 and assessing the lawfulness of the Charity Commission’s guidance.

Issues

  1. Whether independent schools that charge high fees can satisfy the public benefit requirement while retaining charitable status.
  2. Whether the Charity Commission’s guidance imposed legal requirements on charities beyond those set by the Charities Act 2011.
  3. To what extent the Charity Commission may issue binding requirements through guidance.
  4. Whether judicial review is an appropriate mechanism to challenge such guidance.

Decision

  • The court held that the public benefit requirement must be assessed contextually, considering the specific charitable purpose and circumstances.
  • It found that the Charity Commission’s guidance unlawfully imposed additional obligations on fee-charging charities beyond the statutory framework.
  • The court confirmed that the Commission's role is advisory regarding public benefit, but its guidance cannot create new legal requirements.
  • The judgment emphasized judicial review as the mechanism to challenge guidance inconsistent with the statutory framework.

Legal Principles

  • Public benefit under the Charities Act 2011 is not precisely defined by statute and is shaped by common law principles, notably from Re Resch’s Will Trusts [1969] 1 AC 514.
  • Charitable status requires that any private benefit be incidental to the public benefit.
  • The Charity Commission is authorized to provide guidance but cannot impose requirements not grounded in law.
  • Fee-charging charities may retain charitable status if their overall activities provide a sufficient benefit to the public; mandatory free or universally accessible services are not required.

Conclusion

The judgment in Independent Schools Council v Charity Commission [2021] Ch 214 clarified that the assessment of public benefit under the Charities Act 2011 depends on context and purpose, not rigid statutory interpretation or unlawful guidance. Charities must ensure public benefit in their operations, but requirements cannot be imposed by the Commission beyond those set by legislation. This affords fee-charging charities, including independent schools, clarity and flexibility in maintaining charitable status.

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