Charities Bill [HL]

moved Amendment No. 25:"After Clause 8, insert the following new clause—" ““CHAPTER 2A THE CHARITY INDEPENDENT COMPLAINTS REVIEWER    THE CHARITY INDEPENDENT COMPLAINTS REVIEWER    After section 2 of the 1993 Act insert— ““THE CHARITY INDEPENDENT COMPLAINTS REVIEWER 2A   THE CHARITY INDEPENDENT COMPLAINTS REVIEWER (1)   There shall be a complaints reviewer to be known as the Charity Independent Complaints Reviewer (in this Act referred to as ““the Reviewer””). (2)   The function of the Reviewer will be to investigate— (a)   complaints of maladministration and of failure in quality of service by the Charity Commission, and (b)   complaints of unfair, unreasonable or disproportionate conduct by the Charity Commission. (3)   The Reviewer shall be appointed by the Secretary of State. (4)   A complaint may be made to the Reviewer by or on behalf of any charity, charity trustee or other person or body who is or may be affected by the actions or decisions of the Charity Commission and there shall be no requirement that a complainant must use the Charity Commission’s own complaints procedures first. (5)   The Reviewer will not have authority to investigate and adjudicate— (a)   complaints about the substance of legal decisions made by the Commission, although complaints about the way in which those decisions were made will be within the Reviewer’s remit, (b)   complaints by Commission employees concerning their employment or by applicants for employment about recruitment procedures, (c)   complaints where legal proceedings before the Charities Appeal Tribunal or the court directly relating to the substance of the complaint have been initiated, (d)   complaints relating to matters which are under current investigation by the police or taxation authorities, and (e)   complaints under current investigation or which have earlier been the subject of a report by the Ombudsman but complaints which the Ombudsman has refused to consider may be reviewed. (6)   The Commission shall co-operate with the Reviewer by permitting the Reviewer— (a)   to inspect and take copies of all documents (including documents in electronic form) held by the Commission which the Reviewer considers relevant to the complaint, and (b)   to interview employees or agents of the Commission. (7)   The charity, the charity trustees and any receiver and manager appointed for the Charity shall also co-operate with the Reviewer by permitting the Reviewer— (a)   to inspect and take copies of all documents (including documents in electronic form) held by it, him or them which the Reviewer considers relevant to the complaint, (b)   to interview the charity trustees, the receiver and manager, their employees and agents and the employees and agents of the charity. (8)   The Reviewer may send or not send any draft report to the Commission and the complainant but shall not send it to only one of them, and may— (a)   dismiss a complaint, (b)   make a finding that the complainant has acted frivolously, vexatiously or unreasonably, (c)   require a complainant against whom such a finding has been made to pay the whole or part of the costs of the investigation, (d)   make recommendations to the Commission regarding the manner in which it discharges its functions, or (e)   make a finding of maladministration against the Commission. (9)   In cases where the Reviewer has made a finding of maladministration against the Commission he may— (a)   require the Commission to apologise to the complainant, (b)   make an award of compensation against the Commission, or (c)   make no award. (10)   The Reviewer shall report annually in writing to the Secretary of State and may publish reports on individual cases unless he considers that there are good reasons not to do so. (11)   The expenses of the Reviewer will be paid from money provided by Parliament.”””” The noble Lord said: The purpose of the amendment is to set on a statutory footing the position of the existing independent complaints reviewer who, at present, is appointed by the Charity Commission and to allow the reviewer to award compensation to a complainant for   financial loss arising from any maladministration on the party of the Charity Commission. Together those changes will bring about a genuinely independent statutory alternative dispute resolution procedure which   will provide, in addition to the tribunal and the High Court, a complementary route to access justice by charities trustees and others. The reason for the amendment is to create a truly independent mechanism for charities, trustees and others to be able to challenge the Charity Commission when it is apparently guilty of maladministration or is acting unfairly, unreasonably or disproportionately and to obtain financial compensation for maladministration and for financial loss. The Government have shown themselves unwilling to allow that role for the new tribunal. They have turned their back on arbitration. The Independent Complaints Reviewer is appointed by the Charity Commission on terms agreed with the commission. He can be removed by the commission and his recommendations set aside by the commission. It is important to public confidence that that alternative dispute resolution procedure is seen to be truly independent. At present, the Independent Complaints Reviewer may recommend awards for consolatory payments only. He may not recommend or award payment for financial or other substantive loss as a result of unfair, unreasonable or disproportionate behaviour by the Charity Commission. There seems to have been some misunderstanding of that point by the Minister, so I will quote from the terms of the independent charity complaints reviewer compensation policy document. In the introduction at paragraph 1.4 it states:"““The ICR will treat all recommendations of compensation as being of a consolatory nature””." At paragraph 1.5, it states:"““The ICR can recommend maximum compensation of £5,000 in any individual case””." In paragraph 2 under ““Principles””, it states:"““The ICR is committed to the following principles with regard to payments of compensation””." In sub-paragraph (ii), it states:"““The ICR will not recommend compensation to recompense complainants for financial or any other form of substantive loss””." In sub-paragraph (v) it states that,"““compensation will be in the nature of a consolatory payment””." That compensation policy makes it completely plain that the Independent Complaints Reviewer is prohibited from even recommending compensation for financial or other substantive loss. The Minister has previously stated in Grand Committee, that,"““in appropriate circumstances, she could recommend that the commission consider this””.—[Official Report, 23/2/05; col. GC 317.]" The ICR’s documentation from which I have just   quoted makes it clear that the Minister’s belief was   misfounded. She cannot at present recommend compensation for financial loss. The sums of money that can be lost to charities, trustees and their beneficiaries by unfair, unreasonable or disproportionate behaviour by the Charity Commission can be substantial. One might argue that the courts are the proper place to seek award for financial loss for unreasonable, unfair or disproportionate behaviour by the commission, but such behaviour is usually challenged in the context of appealing against the commission’s orders or schemes. In many of those cases the commission’s or the court’s permission is needed to bring such proceedings. That is grossly unfair when the heart of the issue is the commission’s behaviour. When the case reaches the court the complainant will be faced with the Treasury Solicitor and the Attorney-General, acting not as defenders of charity but as defenders of the Charity Commission. Their presence ensures that the complainant, who is not eligible for legal aid, faces considerable costs if he loses, even if he represents himself. Furthermore, as illustrated in the Little Gidding case, the High Court identified the behaviour of the commission as a central issue at one hearing, but in later proceedings ruled that account need not be taken of whether the commission had acted fairly or reasonably in the making of its orders. The only redress in such a case is to go to the Parliamentary Ombudsman, but he has repeatedly refused to take up cases where there is still a legal scope for challenging the commission in the courts. Very few cases have reached the High Court since the 1992 Act, and in not a single case has the commission lost the substantive issue. When justice takes a long time to access, it is potentially bankrupting to the complainant and may be delivered with weighted scales; it is not justice. It is a denial of justice. It is that failure that creates the need for an effective alternative dispute resolution procedure to be in this Bill. In Grand Committee, the noble Lord, Lord Phillips of Sudbury, described the problem as,"““an evil that needs redressing””." He went on to say that the Charity Commission holds the view that,"““the role of the Independent Complaints Reviewer should be amended””," to give it,"““more teeth and more powers to avoid compensation””.—[Official Report, 14/3/05; cols. 449–50.]" I do not consider it likely that the commission will be allowed by the Treasury to give the Independent Complaints Reviewer power to award substantial compensation for financial loss caused by the commission’s occasional misbehaviour. It therefore follows that there must be a mechanism in the Bill if it is to deal with this evil. The Government may well oppose this clause because it has cost implications for the public purse. If any private citizen improperly harms another financially he can expect to pay. There is no reason why the Government’s regulator should be in practice above the law. In practice, this clause would assist the new management of the commission to change the culture there, and we would see very few claims as a result. As the House knows, it is in the business of developing law which conforms to commonly held concepts of justice, knowing that otherwise it will rightly be despised by those whose actions the law is intended to confine. The courts and the Government support alternative dispute resolution procedures as a means of levelling the playing field between citizen and state. Without such a mechanism in this Bill, we may deliver law but we may not deliver justice. I beg to move.