Independent Complaints Reviewer to the Charity Commission - Report November 2001 - Casework

A digest of casework

"The methodical way the case is set out in the report gives real satisfaction and... it is also rigorously accurate..." Complainant

Not interested

Mr A complained that the Commission was disinterested in the serious concerns that he had raised about two housing charities. This contrasted with the helpful response he said had been given on a previous occasion.

In fact, Mr A had raised a series of complaints with the charities themselves. He had not been satisfied with the response of the charities and felt that the Commission should intervene to ensure that they responded appropriately to his correspondence. The Commission did contact the charities after hearing from Mr A but was satisfied with their response and explained that it could not compel charities to reply to all the correspondence that they receive.

Mr A believed that the Commission had been wrong to accept the charities' version of events at face value and maintained that it was the Commission's responsibility to 'do something'.

The ICR did not uphold this complaint. She found that the Commission had dealt with matters properly and had responded to Mr A in as helpful a way as it could, in the circumstances. She explained that it is beyond the Commission's remit to act as a complaints service for individuals dissatisfied with the way that a specific charity has dealt with them.

Community in crisis

Following an internal dispute within a religious charity, the Commission became involved after concerns were raised about its administration. Over a period of years, it sought to resolve ensuing problems and invoked a number of regulatory measures to seek to achieve this goal.

Though small, the charity was well known as a place of religious pilgrimage and historical interest and it received a steady flow of visitors throughout the year.

Over time, a community of like-minded people formed around the charity, living in and around the charity's premises. In due course, the maintenance and enhancement of community life became an important focus of the charity's work.

Mr B, at various times, held different offices within the charity and put both time and money into the charity and the community. Wishing to place the community's affairs on to a more businesslike footing, Mr B asked a newcomer to the community, who had extensive managerial experience, to take over the administration of the charity. In due course, this new trustee took over as both treasurer and chairman and set about sorting out the charity's accounts and other affairs.

The new chairman had concerns about the previous stewardship of the charity and, in due course, the members of the charity became polarised between the supporters of the previous and the new chairman. Eventually, the chairman turned to the Commission for help. The Commission initially tried to resolve matters informally, but was not successful. In the end, it invoked various regulatory steps, including formal inquiry, appointment of a receiver and manager and suspension and removal of trustees. During this time, an already complicated and intractable situation became more difficult to resolve following the commencement of court proceedings.

After several years, a new trustee body was appointed which did not include either Mr B or his successor. Over time, the community dispersed.

Mr B had numerous serious complaints about the Commission's handling of this case. He complained that the Commission had made decisions relating to and about him without seeking his views. Amongst other matters, he also complained that the Commission had reneged on various undertakings that it had given; that inappropriate and defamatory remarks had been made about him; that it had improperly ruled out the possibility of mediation and that it had acted improperly in advising the new trustees about his involvement with the charity.

The ICR upheld a number of the complaints that Mr B made. She found that it was unreasonable not to have sought the complainant's views on issues that it was considering and his response to allegations that had been made about him. Further, the Commission had not followed through on all its undertakings, however, she acknowledged that this had been an extremely difficult matter for the Commission to handle and that it had in the main tried to deal with this matter fairly and equitably.

The ICR also found that inappropriate remarks had been made about Mr B. She acknowledged that, during the internal complaint review, the Commission had apologised for this. However, the ICR criticised the Commission for not apologising earlier when this matter had been brought to its attention.

The ICR did not uphold the complaint that the Commission had ruled out mediation. In her opinion, it had been for the parties to the dispute to agree to mediation and, when this did not happen, mediation could not take place.

The ICR found that the Commission had changed tack on a number of occasions. Of particular concern was a decision taken 'behind closed doors' without reasons being given. This did not accord with the Commission's duty to make decisions in a transparent manner.

The ICR did not uphold the complaint that the Commission had offered inappropriate advice to the new trustees as the Commission was entitled to offer advice as part of its statutory responsibility. In any event, it was for the trustees to decide upon what action to take.

In conclusion, the ICR considered that overall this case was poorly handled by the Commission. The ICR recommended that the Commission offer further apologies to Mr B and a consolatory payment. She made a number of systemic recommendations aimed at resolving the shortcomings in the Commission's practice and procedure that the complaint had highlighted.

Failure to take account of the facts

Mr C complained about the Commission's approval of a donation made by a charity towards improvements to a property owned by the local parish council. According to Mr C, the parish council and its councillors were inappropriately associated with the charity as, for example, a number of councillors served as trustees. He was of the view that this close relationship between the charity and the council gave rise to conflicts of interest between meeting the charity's objects and the council's role.

The Commission looked into the matter but was broadly satisfied with the way in which the charity was set up and it confirmed that it had given some advice on the question of the donation. It had decided that it was inappropriate to take any further action in respect of the issues that Mr C had raised.

The ICR did not uphold Mr C's complaints. The ICR explained that the Commission is unable to interfere in the internal administration of a charity, other than in an advisory capacity, unless and until it decides that serious problems exist which require regulatory intervention. She found that the Commission had reached its decision in this case after taking full account of everything that Mr C had said. She also found that the Commission had responded in considerable detail to each and every point that he had made, explaining its reasoning in clear and unequivocal terms.

Going off at a tangent

Following an incident in a supermarket, Mr D contacted a charity, which provided a counselling and support service for individuals accused of shoplifting. Mr D strenuously denied the allegations made against him and he hoped that the charity would be able to help him obtain redress from the supermarket. However, when it became apparent to him that the charity was not offering him assistance, he complained to the Commission. He asked whether it could help him obtain copies of the charity's correspondence with the supermarket and report on its actions, so that he could decide what to do next.

The Commission sought the charity's comments. The charity responded by telephone and the Commission then put the matter aside. Several weeks later, Mr D made contact again to find out what was going on. In its response, the Commission told him the charity had done more than it was required to do in trying to broker an agreement between him and the supermarket. The Commission recommended that Mr D seek legal advice.

In response, Mr D pointed out that this had not been the purpose of his contact with the charity. He was angered that it had sought to broker any agreement, as he had no wish for this to happen. He also complained that the Commission had failed to deal with his requests.

In due course, this matter was referred to the Customer Service Manager, who wrote to Mr D to explain the Commission's role in providing guidance and support to charity trustees and in investigating possible abuses of charity law or breaches of trust. He concluded that there was very little that the Commission could do to intervene in the issue between Mr D and the charity. He also apologised that the Commission had not explained this earlier. Since the Commission was unable to become involved in the situation between Mr D and the supermarket, he suggested that Mr D consider reverting to the charity to ask for information or to seek alternative help that it might be able to offer.

Mr D was extremely dissatisfied with this response and he complained to the ICR. He complained that the Commission had misunderstood and mishandled his request for its assistance and that delays on the Commission's part had weakened his case against the supermarket and reduced his chances of obtaining redress.

The ICR upheld the complaint that the Commission had failed to respond to the specific issues raised by Mr D. In fact, there was little that the Commission could have done to assist but it had given Mr D the erroneous impression that it had been 'following through' on matters. This was misleading and he should have been told at an early stage about the limitations of the Commission's role.

The ICR also upheld Mr D's complaint about delay. She found that, after the Commission's contact with the charity, the file was ignored for some months until Mr D contacted the Commission. However, the ICR accepted that the Commission had already acknowledged that this was unacceptable and it had apologised to Mr D. This constituted a reasonable response to this complaint.

The ICR recognised that, Mr D's was now no further forward than he had been before. However, she did not find that it could be criticised for weakening Mr D's case against the supermarket. The question of whether Mr D was entitled to redress from the supermarket was a matter between them.

The ICR recommended that the Commission apologise to Mr D for the shortcomings identified and further recommended a consolatory payment in recognition of the stress and anxiety that he suffered as a result of the Commission's maladministration. She also recommended that the Commission review its information leaflets and internal guidance to ensure that individuals who want the Commission to champion their complaints against individual charities are made aware of the Commission's role at an early stage.

Ignoring the whistleblower

Mrs E was elected as Chair of Trustees for a charity that runs a pre-school service. Shortly after her election, she found what she believed were irregularities in its financial administration.

She sought advice on these matters from the Commission. In due course, she was removed as Chair following a 'no confidence' vote. She contacted the Commission again to ask that it investigate her allegations but, in due course, complained that its investigation was ineffective. She further complained that the Commission's response to her had not been consistent with that given to the charity. In particular, she had been told the Commission would 'keep an eye' on matters, whilst the charity was informed that the Commission would take no further action. She also refused to accept that financial and administrative considerations were acceptable reasons for not taking matters further.

The ICR found that the Commission had explained the limits of its role to Mrs E. It had been sufficiently concerned by the issues raised by her to write to the trustees to seek their comments. The Commission wrote to the charity, identifying and asking for a response to each of the points raised by Mrs E. After considering the charity's response, the Commission had written back to say that no further action would be taken.

The ICR concluded that Mrs E's concerns had been handled in accordance with standard practice and procedure and that the Commission had explained its role in such matters early on. She also found that the Commission had given appropriate advice to the charity on its administration and on good practice, in relation to issues that Mrs E had raised and had suggested improvements in practice.

The ICR found that the Commission had intended to visit the charity after a suitable period, to see whether it had implemented the recommended changes. It had not explained this either to the charity or to Mrs E clearly. Had it done so, this complaint might not have arisen.

The ICR did not uphold Mrs E's complaint about the Commission's reasons for not taking further action and accepted that the Commission has a responsibility to use public money carefully and proportionately to the circumstances of a case.

Out of the club

Mr F was a member of the local branch and club of a national charity. After raising numerous concerns about the running of the branch and club both internally and publicly, he was suspended from membership of the club. Mr F complained to the Commission about his suspension, which he considered unfair and also raised his concerns about the branch and club. He asked the Commission to uphold and enforce his right to attend branch meetings.

Mr F was dissatisfied with the Commission's response to his complaints. He complained to the ICR about excessive delay and about the Commission's alleged failure to take any effective action. He also complained that the Commission had acted inappropriately in accepting the charity's view of matters too readily and in failing to take proper account of what he had to say. Finally, Mr F refused to accept the Commission's assertion that it could not consider doing anything about the running of the club, which was not a registered charity.

The ICR did not uphold Mr F's complaint about the Commission's actions. The ICR found that the Commission had taken full and proper account of everything that Mr F had said and had explained clearly why it considered it was not able to take his complaints about the club further. The Commission had also sought to facilitate a compromise between Mr F and the branch, but this proved not to be possible. The ICR found that the Commission had tried to be helpful by seeking a compromise but was not able to compel the branch or the charity to change their views or decisions.

The ICR partially upheld Mr F's complaint about delay. She found that there had been a number of occasions when there had been excessive and unreasonable delays in the Commission's handling of matters and she criticised the Commission for this and for not keeping Mr F properly informed as this matter progressed. However, she acknowledged that Mr F had written a considerable number of letters to the Commission, many of which were very lengthy and raised issues to which it was not possible to respond immediately.

The ICR criticised the Commission for the very long period of time it took to progress matters overall. In part, she considered that this delay was due to the Commission's failure to be clear with Mr F about what it could and could not do and to a general lack of focus in its overall handling of the matter. In the ICR's view, this raised the unrealistic expectation that continued correspondence might achieve Mr F's objective, whereas this had never been likely.

Divided loyalties

Mr G was a past member of the management committee of a charity that was responsible for running a religious institution. He had a number of concerns about the charity's administration, which he brought to the Commission's attention. He found the Commission's response ineffective and he feared for the charity's future. He complained that the Commission failed to take appropriate action to address his complaints that the charity was guilty of racial harassment towards him and of breaches of human rights. Finally, he complained that the Commission had failed to disclose its correspondence with the charity, thereby preventing its members from being able to scrutinise what had happened.

The ICR found that, in order to investigate Mr G's concerns, there had been considerable correspondence and a meeting between the Commission and the charity. The Commission had eventually concluded that the best way forward was for it to offer advice to the charity on certain changes to its constitution. The ICR was satisfied that this decision had been reached after long and careful consideration of the issues and that the Commission had taken full and proper account of Mr G's concerns.

With regard to his complaints about the way in which he had been treated personally by the charity, the ICR accepted that it had not been appropriate for the Commission to intervene directly in the dispute. Mr G's allegations of racial harassment and human rights breaches were more properly matters for the police and the courts.

Not dealing with the complaint properly

Mr H was involved with a charity providing help and support to sufferers of specific learning difficulties. Mr H suffered from this condition himself.

He raised a large number of detailed concerns about the administration and management of the charity. When he failed to get these addressed to his satisfaction within the charity, he complained to the Commission. However, when he did so, he found his complaint was not acknowledged and that the response he received failed to address many of the issues he had raised. He also complained that the Commission failed to follow its own complaints procedure and that its response to his complaints mocked his disability.

The ICR upheld the complaint that the Commission failed to explain its role properly. She found that the Commission had become entangled in the ongoing debate between Mr H and the charity. It had not explained that, in practical terms, it could not enforce a settlement. However, ultimately, the Regional Operations Manager had apologised for these failings. The ICR found that this had constituted a reasonable response to the complaints.

With regard to Mr H's complaints about the Commission's internal complaints procedure, the ICR found that there had been some confusion on the Commission's part. Although, Mr H did eventually receive a response from the Regional Operations Manager, as required by the procedure, much of the correspondence relating to their complaints was handled as general casework, rather than as a complaint. This confusion was mainly due a proliferation of correspondence and contacts with several Commission officers.

In due course, the complaints were referred to the Regional Operations Manager for review. Mr H criticised this because the procedure outlines an earlier stage of review by the Customer Service Manager. The ICR found that the Commission's action was appropriate, given that he had complained about his contact with the Customer Service Manager. This approach was reasonable, demonstrated flexibility and, in the event, shortcut the process.

The ICR did not uphold Mr H's complaint that he had been mocked for his disability. After thorough review, she could not find any objective evidence to support this allegation. Finally, the ICR found that the Commission had taken all of Mr H's concerns fully into account and had considered them all properly and seriously.

Referred back

Mr I had a number of serious concerns about a charity, which he had sporadically raised with the Commission over several years. He felt that the Commission could and should have done more to look into these matters. He contacted the ICR to complain about what he saw as the Commission's intransigence.

On contacting the Commission, initially, the Commission said it appeared that Mr I had not been in touch with the Commission before. However, it transpired that the files containing the original correspondence had been destroyed some time before in accordance with the Commission's policy. Mr I was able to produce copies of all of the relevant correspondence.

Whilst the ICR's procedures provide that complaints must be considered internally prior to independent review, Mr I was unhappy with this as he was sceptical that the Commission would look into the matter properly. After considerable discussion, he agreed that his complaint should be reviewed internally before independent review.

Already considered by the Ombudsman

Mr J was a minister of religion and was involved in a local institution with charitable status. A dispute had arisen within the charity in which the Commission had become involved; it had ended up instituting a new scheme to resolve some of the problems. It had also sought to resolve the remaining difficulties.

Mr J complained about a number of matters, including that the Commission had, at times, adopted an unacceptable attitude and, without cause, had threatened to have him declared unfit to be a trustee, taking no account of the detrimental effect that this would have upon him.

By the time that he complained to the ICR, a number of Mr J's complaints had already been investigated and responded to by the Parliamentary Ombudsman. His review had concluded that these complaints were unjustified in some respects, misconceived in others and the remainder were outside of his jurisdiction. In view of the Ombudsman's prior review, the ICR was not able to review these particular complaints, as the Ombudsman represents the final stage of the complaints procedure.

However, the ICR decided that she was able to review Mr J's complaints about the way that it had dealt with him in relation to its alleged threatening behaviour. It was clear that Mr J had been greatly upset by what he saw as the Commission's attitude towards him. It was also clear that the issues the Commission was asked to consider were highly emotive and contentious. In the ICR's view, this placed a particular responsibility on all concerned to act in a professional and courteous manner.

The ICR considered that the Commission had been both clear and unequivocal in explaining its views and proposals to Mr J (views with which he did not agree). However, the ICR could not find any objective evidence that the Commission's intention was to 'bully' him. The Commission denied that it had threatened to have him declared unfit to be a trustee. However, it accepted that there had been a frank and somewhat heated telephone conversation, during which the impression might have mistakenly been given that this was the Commission's intention.

The ICR found that the Commission had written to Mr J to set the record straight on this point. In view of this, the ICR did not uphold this complaint. Nevertheless, she recommended that the Commission apologise to Mr J for the misunderstanding that arose and for not recognising the genuine nature of the distress and anxiety that Mr J expressed.

Putting the charity back on the right track

Mr K was a past trustee of a religious charity. He became concerned about a number of aspects of the charity's activities and organisation, which he raised with the Commission in an effort to secure its intervention to help get the charity back on the right track. However, Mr K considered that the Commission had failed to take the appropriate action to address these issues and had also failed to understand the personal problems that he had faced as a result of his dealings with the charity. He further complained that the Commission had taken too long to deal with this matter and had not told him of his right to refer his complaint to the ICR.

The ICR's investigation revealed that this matter had generated a huge amount of correspondence, which spanned several years. The files demonstrated that there had been a bitter and protracted dispute within the charity, during which strong accusations had been made on all sides. The tone of some of the correspondence had been both insulting and provocative and, whether or not this was justified, it certainly made matters much harder to resolve.

The ICR concluded that the Commission had taken full account of everything that Mr K had said and had acted upon it when it considered that appropriate. However, the ICR found that the extraordinary time and resource that the Commission had devoted to this matter was inappropriate. The Commission had told Mr K repeatedly that it could not interfere in the internal affairs of the charity but, in effect, that was exactly what the Commission had been doing over several years.

However, the ICR found that in dealing with his complaint, the Commission had taken all necessary steps to understand Mr K' concerns. There had been numerous lengthy discussions with Mr K, during which he had been given ample opportunity to put his point of view. The ICR found that there had been some instances of delay in the Commission's handling of this matter. However, the frequency with which Mr K contacted the Commission and the effect of his corresponding with different officers at more or less the same time, made it very hard for the Commission to respond in a timely and helpful fashion. Furthermore, officers had shown considerable forbearance in dealing with him, despite instances of unacceptable discourtesy on his part.

The ICR upheld Mr K' complaint that he was not informed about the independent complaints review process. The ICR recommended that the Commission ensure that all future final correspondence contains the appropriate 'signposts'.

Bequest and beneficiaries not safeguarded

A bequest of land was made to the residents of a town for the provision and maintenance of a recreation ground. The task of administering the bequest was allotted to the local council but, according to Mr L, it failed to maintain the land properly and had proposed a development on the site despite considerable 'local' opposition.

The Commission was asked to consider the status of the trusts under which the land was held. It decided that the land was held on a charitable trust and, shortly after, a charitable scheme was drawn up and the council was confirmed as the sole trustee.

Mr L complained that the Commission failed to take proper account of the importance of the benefactor's family or the beneficiaries having some say in the running of the charity. Given his view of the history of the council's stewardship of the land, he was worried that there were insufficient safeguards in the new scheme.

The ICR concluded that it was outside of her remit to look into the decisions that the Commission had made in this matter, which had been reached under its statutory powers. However, she did look into the way in which the Commission had proceeded, and concluded that the Commission had acted reasonably and in accordance with its usual practice and procedure. She also commented that the Commission had taken care to ensure that the Council fully understood its responsibilities regarding the land and had taken all necessary steps to inform and consult with the local community.

Doctrine and dispute

Mr M was dissatisfied with the Commission's handling of matters regarding two associated religious charities that had been riven by long-running internal disputes.

Although the case touched upon matters that the Commission is often required to consider (such as financial management and trustee disputes), it was further complicated by a doctrinal issue. This related to the question of the purpose for which the charities were established. In essence, the charities had been formed to oppose steps towards union of the charities' parent church with another church. Although this union did not in the end go ahead, the issue remained 'live' and, some years later, discussions were resumed between the respective churches.

In Mr M' view, the charities were the only true voice of the faith. He felt that some aspects of the Commission's actions had the effect of pushing the charities in the direction of the parent church. The charities' governing documents required its members to be adherents of the parent church. Mr M argued that, in effect, this now went against the true intention of the founders of the charity and that the Commission should take their wishes into account.

The Commission argued that it was not competent to pronounce on doctrinal issues and had to deal with the situation and the charities' governing documents as they were. Its duty was to give effect to the governing documents and to do what it could to establish a secure future for them. The ICR found that it had sought to do this in the appropriate manner.

Mr M had a number of other complaints about the Commission. These included unreasonable delay, failure to take proper account of the points that he had made and that the impartiality of the receiver and manager who had been appointed was open to question.

The ICR partially upheld his complaint about delay and found several instances of unacceptable delay in dealing with matters. However, the Commission had been faced with a complex and vexatious dispute in which the parties held firm and irreconcilable views. This, in itself, had the effect of slowing progress considerably and it was often beyond the Commission's ability to move things along.

The ICR found that the Commission had taken full account of everything that Mr M had said. It had not responded to each and every point that had been made (which would not have been possible or reasonable given the huge number of submissions from him and others), but it had taken them all into account.

In relation to the appointment of the receiver and manager, Mr M complained that there was a conflict of interest, since the same firm acted for the parent church. The ICR did not comment upon this specific case but recommended that the Commission review its tendering procedures to assure public confidence.

Bias and bullying

Mrs N was the Chairman of a small charity founded for the purposes of relieving human suffering and distress through natural or alternative therapies. In an attempt to bring in some 'new blood' to the trustee body, a new trustee, Mr A was appointed. The intention was that he would advise on administration. He formed the view that the charity was not being run properly in certain respects and raised his concerns with the Commission. The Commission wrote to him seeking further information and he copied this letter to his colleagues, who were upset by this turn of events.

Over time, the dispute between Mr A and his colleagues intensified to the point where he was no longer invited to committee meetings. However, he remained a trustee because the charity's governing instrument did not contain any provision for trustees to be removed.

Ultimately, an impasse was reached. The original trustees were adamant about the need to sever their links with him but they could not do this without a change in the governing document. On the other hand, Mr A continued to insist that he remain a trustee and wanted to participate.

The Commission's visited the charity. After this, it was concluded that there not been any serious breaches of trust and that the charity was operating well and doing good work. Some suggestions were made as to how administration might be improved which the trustees accepted.

The trustees took this to be a 'clean bill of health' for the charity and they immediately demanded that Mr A resign. He refused and appealed to the Commission that he was still being denied the opportunity to act as a trustee. However, he gave the Commission the impression that, if he were invited to a meeting, he would resign. Matters continued without resolution and the Commission pointed out that whilst he remained a validly appointed trustee, he had a legal right to attend trustee meetings. It suggested to the trustees that by denying him this right they could be in breach of trust. Later, the Commission went further by suggesting that refusal to invite him to meetings might result in consideration of a formal inquiry.

It was suggested that the trustees seek mediation. The mediation service suggested that what was needed was a new scheme that would allow the situation to be resolved. A draft scheme was drawn up but the Commission would not approve it, because it saw it as a device for ousting Mr A. In the event, the Commission suggested inserting a clause that would require the trustees to seek its consent to any changes to the trustee body.

By the time the trustees complained to the ICR, the situation remained unresolved. They complained that the Commission should have done something more practical to help sort matters out and that it had displayed bias in favour of Mr A. They also complained that some of the Commission's correspondence with them had been inappropriately aggressive and threatening in its tone.

The ICR partially upheld the complaint. She found that the Commission had initially taken appropriate action to deal with concerns raised and had acted within normal practice and procedure. However, as time had gone on, it had adopted a more intransigent view of the matter. The trustees felt that the Commission 'took up the cudgels' on behalf of the new trustee by its apparent endorsement of his view that they needed to be monitored, despite the mainly positive assessment made of the charity. The ICR accepted that the Commission was not biased but found that this impression had been given.

The ICR upheld the complaint about the inappropriate tone of certain correspondence, which, in the circumstances, had the effect of exacerbating the dispute. The ICR recommended that the Commission offer an apology and a consolatory payment to the trustees.