Policy paper

Charity disputes

Published 23 May 2013

Applies to England and Wales

This page is currently under review (this version published June 2008)

When different groups within a charity disagree they often ask us to take one side or the other and impose a solution. However, a charity’s trustees have the responsibility for running their charity and we will only intervene in these types of internal disputes in exceptional circumstances. Find out where we can and cannot intervene.

Dispute: A dispute is a serious disagreement within a charity, which left unresolved, can lead to a breakdown in the effective governance and day to day management of a charity. Disputes most often occur in membership charities, but can also arise within the trustee body and between trustees of different charities.

Trustees: Charity trustees are the people who serve on the governing body of a charity. They may be known as trustees, directors, board members, governors or committee members. Charity trustees are responsible for the general control and management of the administration of a charity.

Governing Document: A governing document is a legal document setting out the charity’s purposes and usually how it is to be administered. It may be a trust deed, constitution, memorandum and articles of association, will, conveyance, Royal Charter, Scheme of the Commission or other formal document.

Mediation: Mediation is a private and confidential process by which the parties in a dispute agree to appoint an independent person who meets them and their advisers with a view to helping the parties reach a solution. As the solution is agreed to by those directly affected, rather than imposed externally, it is more likely to provide a long-term resolution.

1. What should a charity do if it gets into a dispute?

1.1 The short answer

Those involved in a dispute should try and use all available methods to resolve the dispute themselves.

1.2 In more detail

We expect charity trustees to work in the best interests of their charity and to apply funds and administer property in accordance with its charitable purposes. Trustees are ultimately responsible for the governance of their charity, providing overall direction and supervision and are held accountable for the charity’s assets.

At times, trustees may disagree or there might be disagreement between or within the membership and the trustees. While it may be positive to have a wide range of opinions to inform decisions, where this leads to a dispute which has a negative effect on the functioning of a charity then it is a problem. We expect the trustees and the members of a charity, where these exist, to work in the best interests of the charity and to seek to resolve issues where they have the potential to damage the charity.

The fact that a dispute exists does not necessarily mean that the Charity Commission will become involved. We expect those involved to have exhausted all other means of resolving the dispute before approaching the Commission.

1.3 Dispute resolution

Some charities have procedures for resolving disagreements. These procedures may be stated in the charity’s governing document, for example in a disputes clause. If these mechanisms break down, or there is disagreement about the interpretation of any written procedures, one or more of the parties involved should look externally for support. An external person or organisation may help to provide a fresh perspective and facilitate resolving the dispute. Who a charity approaches will depend on the nature of the dispute. If the dispute concerns the internal governance of the charity then the charity could:

• approach its national body, or a regional or national umbrella body, if they exist
• approach its local Council for Voluntary Service or national bodies such as the National Council for Voluntary Organisations for support
• for doctrinal disputes you could approach a neutral respected person from within your community, for instance the trustees might like to ask a clerk from a local church or a community elder

1.4 Mediation

Alternatively, a charity might consider a more formal approach to resolving a dispute by employing the services of a professional mediator. Mediation can be a quick and cost effective way to resolve disputes.

If the parties involved in the dispute decide to take their disagreement to the charity tribunal or the court, the tribunal or the court will expect them to have tried mediation before hearing their case. Often the parties need our permission to take court action in relation to a dispute within the charity (Section 115 Charities Act 2011). In these cases, we will usually expect them to have tried mediation before we provide our consent to allow the matter to go to court. Even if the Commission agrees that the matter is best resolved by the court, it will not follow that the charity must in all cases meet the costs of the application. This may have to be paid by those bringing the case.

2. When do we get involved?

2.1 The short answer

We will only get involved when we have evidence that all other available methods of resolving the dispute have been attempted and have failed.

2.2 In more detail

If there are properly appointed trustees in place we will not get involved. It is the responsibility of the trustees to ensure any complaints are addressed.

We will become involved if the following two points are satisfied:

• there are no validly appointed trustees
• all other methods of resolving the dispute have failed

Complainants should show good reason, backed with evidence, for concerns that they raise with the Commission. We will expect complainants to raise all of their concerns in writing at the outset and not submit piecemeal complaints.

3. What can we do to help you towards a solution?

3.1 The short answer

If all parties are willing to cooperate, we may be able to provide a solution or mechanism for getting the charity back to a position of having properly appointed trustees.

3.2 In more detail

If we are presented with substantiated concerns about the validity of trustee appointments, we will deal with these first and only if all other methods of resolving the dispute have failed. Secondary complaints will generally not be dealt with until a valid trustee body is in place to take the charity forward. At that point, issues relating to the management and administration within the charity are matters for the charity trustees to address and not the Commission.

If we decide that the concerns presented to us justify our involvement, our aim is to secure a positive outcome for the charity. Our focus will be to find a workable solution to the problem and we expect all parties to commit to a way forward once agreed. We also expect all those involved to act in accordance with our decision once made.

The means by which we provide a solution depends on the level of risk involved and the likelihood of a successful outcome.

Ways of putting the charity back on track include:

• signposting to mediation services
• making arrangements for the determination of who are the members of a charity
• making arrangements for the valid appointment of trustees
• making arrangements for fair and independently observed elections, including encouraging the parties to form an electoral commission and authorising that body to supervise the next elections
• providing advice and guidance to trustees regarding their duties and responsibilities
• providing advice and guidance to trustees about improvements to their governing document so that any future disputes can be resolved more easily

Case Study

Complaints were received about a charity’s elections and there was some doubt over the appointment of the trustees. Both sides of the dispute were willing to co-operate and we sanctioned the calling of an election which was supervised by an independent observer. The charity now has a properly appointed group of trustees who can take any further issues forward.

3.3 When will we take regulatory action in a dispute case?

3.4 The short answer

When there is evidence of misconduct or mismanagement which puts the charity’s assets, beneficiaries, integrity and reputation at risk; when the charities is being run by individuals who are not entitled to run it and are unwilling to put the situation right; or when the charity can no longer operate.

3.5 In more detail

We determine the most appropriate and proportionate course of regulatory action to take based on an assessment of the:

• particular circumstances
• seriousness and scale of the problem
• level of risk to the charity (activities, beneficiaries, property or reputation)
• available evidence
• likelihood of a successful outcome

In cases of serious regulatory concern, our assessment may lead to us opening a formal inquiry under the Charities Act 2011.

Deliberate wrongdoing, criminality and serious abuse will be dealt with rigorously and decisively. Where necessary, we will intervene to protect the charity by using the Commission’s legal powers.

When charities, or those connected with them, have committed a criminal offence this is a matter for law enforcement agencies and we will refer suspicions of criminal activities to them as appropriate.

We still expect to be notified if the charity is subject to investigation by another regulator or a criminal investigation as a matter of course. Read about reporting serious incidents to the Commission.

3.6 When are we not the right organisation to come to?

3.7 The short answer

We will not become involved where a concern is about policies pursued or actions taken by the trustees within the law and the provisions of the charity’s governing document or when another organisation is best placed to deal with the concern (see end of guidance for list of useful contacts).

3.8 In more detail

Decisions about policies pursued or actions taken by the trustees within the law and the provisions of the charity’s governing document are for trustees to take (and justify), and they have very wide freedom to do so. The Commission does not have discretion to overrule a charity’s decision, validly taken within its powers, on the grounds that others take a different view, however strongly held. Deciding policy is a key part of trustees’ freedoms and responsibilities, and may include:

• seeking resolution to the dispute including differences of opinion over spiritual or doctrinal matters within religious or other belief-based charities
• deciding how community facilities (such as a school, community centre or playing field) are used
• deciding how to consult users, user groups or supporter groups about decisions and policies of the charity they use or support
• the terms and conditions of occupancy or use of charity land, and (provided that legal and constitutional requirements are met) its disposal

We cannot become involved where the complaint concerns contractual or other property rights which are matters between the charity and a third party, for example:

• employment issues or claims of unfair dismissal
• disputes between charities and people or organisations which have entered into contracts with the charity, including landlord-and-tenant disputes

In addition, we cannot become involved where the issue is connected with a planning application or development control.

At the end of this document we have listed useful organisations that you might want to contact for further help or guidance.

3.9 Focus on positive outcomes

If we facilitate a solution which is then disrupted by continued dispute and lack of cooperation, we may have to bring an end to our involvement, even in some cases where we continue to have regulatory concerns. For example when we have authorised an election committee to call an election, but there is ongoing disagreement about who should be represented on this committee, we may decide to end our involvement.

We have a duty to ensure that our regulatory action is appropriate, proportionate and targeted where it is needed. Our continued involvement in a dispute can only be considered where a clear risk to the charity exists and where there is a good probability of a successful outcome. If our experience tells us that this probability is low, we may disengage. This could mean that the charity ceases to operate and winds-up or that the charity splits. As regulator, we cannot eliminate all failure and in some cases will have to tolerate this as the outcome.

We would of course support the charity in facilitating the transfer or split of its assets if needed.

3.10 Useful contacts

Civil Mediation Council - provides a pilot scheme for accredited mediators

National Council for Voluntary Organisations (NCVO) - has specialist teams that are able to provide information, advice and support to voluntary and community organisations: 0800 2798 798 or email

National Association for Voluntary and Community Action - provides a directory of local Council for Voluntary Services - who act as local umbrella organisations for local charities and voluntary groups and provide training and support to trustees

ACAS - for information on employment issues and disputes: 08457 47 47 47