UK legal update

Philip Norton Eversheds Solicitors, Paston House, Princes Street, Norwich NR3 1 BD, U K Tel: +44 1603 272727; Fax: +44 1603 630588; E-mail PhilipNorton@eversheds.com

Philip Norton is the head of Eversheds Solicitors Charities Business Development Unit and the UK Legal Editor of the Journal of Nonprofit and Voluntary Sector Marketing.

OVERVIEW Once again, Government led initiatives are still being delayed and one might be for- given for thinking that they are very much on the backburner! Current Government working parties are looking at both direct and indirect taxes. Formal results of these reviews are still awaited, as is the Charity Commissioners review of the Chanties S O T .

Now, there remains a deep concern amongst charity lawyers about the regula- tion of charities and their affairs, the awareness some charity trustees have about their responsibilities and the Charity Com- missions’ Review of the Register of Charities.

These ‘local’ issues may be completely overshadowed by the prospect ofEuropean Monetary Union. Simple issues such as coin/note shape and size, currency conver- sion rates, the currency in which bills are rendered or grants made, currency issues when contracting, accounting and IT sys- tems, are all likely to cause concern.

FUNDRAISING The Charity Commission is warning trustees about the sale of magazines which purport to benefit charitable causes. A similar warning is being made about collection boxes. Both can prey on the public’s attention without there being any clear statement about how much and where funds will ultimately end up.

INVESTMENTS The turmoil in the stock market is having an effect on everyone, including charities. Problems in Japan and the Far East, sectors in which collective funds are bound to have invested, will have been hit. Investment income will also be affected by tax changes. Financial performance will therefore need to be monitored closely and very great care taken in selecting investment managers.

At a time when income is under pressure, close inspection of costs and expenditure ought to be undertaken, while still keeping an eye on alternative means of raising funds.

CHARITY COMMISSION INVESTIGATIONS Two current cases of interest are the removal of Arthur Scargill and Frank Cave as trustees of two miners’ welfare chanties, and the suspension of trustees of The Little Gidding Trust after an internal dispute over a L250,OOO ‘loan’. Both matters were referred from the Charity Commission to the High Court and in the miners case, the judge had no hesitation in finding Arthur Scargd and Frank Cave ‘guilty of miscon- duct and mis-management’. In the other case a full hearing is due to take place in February, 1999 where one of the former trustees will be putting the Charity Commission to a defence of its actions in the case.

Perhaps the interesting point to note in respect of both cases is the willingness of the Charity Commission to use its powers of inquiry in circumstances where there may be a breach of trust for mis- management.