L6/7 Charitable Trusts (5)
Q 2024 Paper: ‘Charitable trusts for political purposes are rightly prohibited under the law of
England & Wales. The law should never recognise their validity. Discuss.
INTRO:
Anti-Vivisection Society: political purpose masked as educating isn’t legally valid as
charitable
Main argument: while recognise courts prohibit political purpose as legally charitable rooted
in fiscal policy and avoiding discussing policy. This essay will argue this is outdated and
incoherent. Courts avoid this to not endorse certain views but have no qualms with
approving different religions. This essay will highlight the distinction between legal validity
and endorsing a political purpose. This essay will suggest such changes are possible as seen
in NZ and AUS and desirable in promoting public debate.
P1 - ANTI-VIVISECTION SOCIETY + WHY POLITICAL PURPOSE IS RIGHTLY PROHIBITED:
legally charitable purpose must be under Pesnel heads of charity/CA 2011 s.3 - advancement
of education is one of them
and must also be in the public benefit -s.4 CA 2011
Anti-Vivisection Society: group trying to change the law + abolish vivisection in the UK ≠
charitable education but political purpose
o education => assumed to be in the public benefit
o unless can prove education is for something bad e.g. antisocial education
o purpose cant be for public benefit if do more harm than good e.g. damage from
their pursuit > benefit they bring
o court ≠ qualified to decide if political purpose is in the public benefit + would stultify
the law if decided it was
o stultifies the law just declare the law without criticising it, enforces laws and can’t
accept the law needs changing => can’t embarrass the AG to enforce a change in law
they are meant to uphold
o court assumes we have the law perfectly figured out + court already review
legislation albeit constrained (s.4 HRA 1998)
o parliament’s job to change law
o fiscal advantages cost £bns shouldn’t benefit from this
P2: CRITICSIMS + WHY POLITICAL PURPOSE IS WRONGLY PROHIBITED FROM CHARITABLE STATUS:
Charity Comm: diff between educating and propaganda
Garton: criticises ^ bc doesn’t promote democracy
o diff between deciding if legal change itself is a good thing and promoting public
debate on it => charitable/enhance democracy
1- court cant judge public benefit of change in law => courts have shown capability
e.g. disagree w/ precedent + more stultifying not to do so
2- inappropriate for court to usurp parliament => granting charitable status unlikely
to determine whether the org actually pursue the goal
just bc campaign legal change ≠ parliament will change it
granting status ≠ court advocating for change (e.g. grant status 2 opposing
groups not advocating for both/approving or disapproving of religions)
why not for politics
3- conflict of interest for AG enforcing charitable political trust. AG may hesitate
taking defaulting Ts to court if political purpose against gov policy => weak:
, charities already independent of govt approval and pursue goals conflicting w/
gov goal => face same conflict of interest w/ non-political purpose currently
o so prohibiting political purpose isn’t rightly prohibited bc inhibits public debate +
democracy
o COUNTER: can still debate w/out needing charitable status and its fiscal advantages
which cost taxpayers £bns, could managed by capping relief for political purpose
instead of complete relief => COUNTER: public debate = public good, socially
valuable exactly what taxpayers £ go to? better for court to transparently address
policy
P3 REFORM - RECOGNISE POLITICAL PURPOSE:
McGovern v AG: permitted political purpose as charitable despite requiring changes in the
law/gov policy in jurisdictions where abuses occurred
o e.g. release of prisoners, oppose detention w/out trial, death penalty, torture +
inhumane treatment
different jurisdictions have recognised it
o Aid/Watch: AUS encourage public debate on matters falling within an existing head
of charitable purpose = charitable purpose
contribute to culture of free political expression => what democratic
systems depend on
o Re Green Peace of NZ: don’t fully agree w/ Aid/Watch that promoting political
purpose is a charitable purpose on its own but nonetheless permitted political
purpose as charitable
Mitchell: argues Aid/Watch was right -> prohibition is incorrect in the UK
o purpose of political debate as social good in itself
o courts avoid contentious debate abt legal change for/against public benefit
o England should follow => aligns w/ comm guidance on benefits of campaigning
(homeless charity legitimately pressed govt housing policy change)
o campaign for change likely to succeed bc advance human rights is in CA 2011 s.3
o The Human Dignity trust ≠ political bc purpose embodied treaty/constitutional
guarantees, enforced rather than changed law
o harder to deny charitable status to bodies using same means to achieve similar ends
ep if Aid/Watch accepted
o I agree hypocritical for jurisdiction to have HRA/ECHR and then deny charitable
status especially when organisations are enforcing those pre-existing constitutional
values/national laws exist.
o beneficial to promote culture of public debate and raise awareness of current
matters => organisations invaluable in changing laws/awareness even beyond
human rights e.g. homeless charity push for change in gov housing policy.
o strike balance between debate and not propaganda => law comm/AG regulation to
keep boundaries in place.
CONC:
Blanket prohibition of political purpose as charitable while understandable to tame fiscal
concerns, is not entirely convincing if grounded on stultification and judiciary’s lack of
mandate to discuss politics bc they have shown capability in doing so. Additional recognising
political purpose as charitable would promote public debate which is socially valuable so
long as doesn’t veer into propaganda as law comm stress.
, FRs/FDs; Remedies for Breach of FD 9 (Formative II) (5)
Q 2018: ‘It may be appropriate for a higher court one day to revisit the rule on secret profits And to
make it less inflexible in appropriate circumstances, where the unqualified operation of the rule
operates particularly harshly and where the result is not compatible with the desire of modern
courts to ensure that remedies are proportionate to the justice of the case and where this does not
conflict with some other overriding policy objective of the rule in question.’ (Arden LJ in Murad v Al-
Saraj (2005).) What remedies should be available to a principal against a fiduciary who has made
secret profits? Is the law satisfactory?
INTRO:
LJ Arden Murad v Al-Saraj; strict no profit rule governing F excessively harsh
current law: stringent obligations: F must disgorge all unauthorised profits to P regardless of
intent or incidental benefit to P
o inflexibility => important deterrent + protective function reflects vulnerability of P in
FR
o BUT: prophylactic nature of no-profit rule remains essential to preserve trust and
deter conflict of interest
o mitigate strictness w/out undermining core principles e.g. defences like informed
consent/equitable allowance
Main argument: the law though broadly satisfactory could better balance fairness and
deterrence by limiting liability where F’s gain is too remote, aligning outcomes more closely
w/ proportional justice
WHY THE NO PROFIT RULE IS NEEDED:
unauthorised profits made by F due to their role must return to P - Keech v Sandford (F
disgorge all profits made from sublease) => stringency of rule
o F attempted to obtain sublease for the P but request refused by sublessor
o recognised unfairness of case but reiterated need for absolute rule to pre-remove
motivation for other F to profit from their position
reasoning behind no profit rule justifies initial stringency
o policy + advantageous remedies focus on prophylactic nature of FDs
o courts aim to deter F from breaching position + ensure Ps protected
o strictness of rule/remedies should be retained to ensure Fs don’t allow their
interests to conflict w/ duty
o important bc F holds power over P’s affairs + shouldn’t abuse their power to profit
from it
o nature of FDs act w/ loyalty cant be done if F tempted to self-serve => strict
remedies upheld to preserve purpose of F rules
o Smith: law forbids person who controls another person’s life to use P as if they were
‘pecuniary assets’ => reflects compelling policy reason underlying harsh F rules and
advantageous remedies -> F need limits to their vast power over another’s financial
autonomy
WHICH REMEDIES SHOULD BE AVAILABLE AND WHY THE LAW IS SATISFACTORY IN AWARDING THEM:
remedies: no-profit rule, accounts of profits, constructive trusts, recission + equitable
compensation
extremely advantageous to P and viewed as harsh to F
o each remedy necessary: protects P in many situations, to get remedy F must have
specifically breach FD not general duty => somewhat limits scope avoids excessively
wide usage of remedies
Accounts of profits
Q 2024 Paper: ‘Charitable trusts for political purposes are rightly prohibited under the law of
England & Wales. The law should never recognise their validity. Discuss.
INTRO:
Anti-Vivisection Society: political purpose masked as educating isn’t legally valid as
charitable
Main argument: while recognise courts prohibit political purpose as legally charitable rooted
in fiscal policy and avoiding discussing policy. This essay will argue this is outdated and
incoherent. Courts avoid this to not endorse certain views but have no qualms with
approving different religions. This essay will highlight the distinction between legal validity
and endorsing a political purpose. This essay will suggest such changes are possible as seen
in NZ and AUS and desirable in promoting public debate.
P1 - ANTI-VIVISECTION SOCIETY + WHY POLITICAL PURPOSE IS RIGHTLY PROHIBITED:
legally charitable purpose must be under Pesnel heads of charity/CA 2011 s.3 - advancement
of education is one of them
and must also be in the public benefit -s.4 CA 2011
Anti-Vivisection Society: group trying to change the law + abolish vivisection in the UK ≠
charitable education but political purpose
o education => assumed to be in the public benefit
o unless can prove education is for something bad e.g. antisocial education
o purpose cant be for public benefit if do more harm than good e.g. damage from
their pursuit > benefit they bring
o court ≠ qualified to decide if political purpose is in the public benefit + would stultify
the law if decided it was
o stultifies the law just declare the law without criticising it, enforces laws and can’t
accept the law needs changing => can’t embarrass the AG to enforce a change in law
they are meant to uphold
o court assumes we have the law perfectly figured out + court already review
legislation albeit constrained (s.4 HRA 1998)
o parliament’s job to change law
o fiscal advantages cost £bns shouldn’t benefit from this
P2: CRITICSIMS + WHY POLITICAL PURPOSE IS WRONGLY PROHIBITED FROM CHARITABLE STATUS:
Charity Comm: diff between educating and propaganda
Garton: criticises ^ bc doesn’t promote democracy
o diff between deciding if legal change itself is a good thing and promoting public
debate on it => charitable/enhance democracy
1- court cant judge public benefit of change in law => courts have shown capability
e.g. disagree w/ precedent + more stultifying not to do so
2- inappropriate for court to usurp parliament => granting charitable status unlikely
to determine whether the org actually pursue the goal
just bc campaign legal change ≠ parliament will change it
granting status ≠ court advocating for change (e.g. grant status 2 opposing
groups not advocating for both/approving or disapproving of religions)
why not for politics
3- conflict of interest for AG enforcing charitable political trust. AG may hesitate
taking defaulting Ts to court if political purpose against gov policy => weak:
, charities already independent of govt approval and pursue goals conflicting w/
gov goal => face same conflict of interest w/ non-political purpose currently
o so prohibiting political purpose isn’t rightly prohibited bc inhibits public debate +
democracy
o COUNTER: can still debate w/out needing charitable status and its fiscal advantages
which cost taxpayers £bns, could managed by capping relief for political purpose
instead of complete relief => COUNTER: public debate = public good, socially
valuable exactly what taxpayers £ go to? better for court to transparently address
policy
P3 REFORM - RECOGNISE POLITICAL PURPOSE:
McGovern v AG: permitted political purpose as charitable despite requiring changes in the
law/gov policy in jurisdictions where abuses occurred
o e.g. release of prisoners, oppose detention w/out trial, death penalty, torture +
inhumane treatment
different jurisdictions have recognised it
o Aid/Watch: AUS encourage public debate on matters falling within an existing head
of charitable purpose = charitable purpose
contribute to culture of free political expression => what democratic
systems depend on
o Re Green Peace of NZ: don’t fully agree w/ Aid/Watch that promoting political
purpose is a charitable purpose on its own but nonetheless permitted political
purpose as charitable
Mitchell: argues Aid/Watch was right -> prohibition is incorrect in the UK
o purpose of political debate as social good in itself
o courts avoid contentious debate abt legal change for/against public benefit
o England should follow => aligns w/ comm guidance on benefits of campaigning
(homeless charity legitimately pressed govt housing policy change)
o campaign for change likely to succeed bc advance human rights is in CA 2011 s.3
o The Human Dignity trust ≠ political bc purpose embodied treaty/constitutional
guarantees, enforced rather than changed law
o harder to deny charitable status to bodies using same means to achieve similar ends
ep if Aid/Watch accepted
o I agree hypocritical for jurisdiction to have HRA/ECHR and then deny charitable
status especially when organisations are enforcing those pre-existing constitutional
values/national laws exist.
o beneficial to promote culture of public debate and raise awareness of current
matters => organisations invaluable in changing laws/awareness even beyond
human rights e.g. homeless charity push for change in gov housing policy.
o strike balance between debate and not propaganda => law comm/AG regulation to
keep boundaries in place.
CONC:
Blanket prohibition of political purpose as charitable while understandable to tame fiscal
concerns, is not entirely convincing if grounded on stultification and judiciary’s lack of
mandate to discuss politics bc they have shown capability in doing so. Additional recognising
political purpose as charitable would promote public debate which is socially valuable so
long as doesn’t veer into propaganda as law comm stress.
, FRs/FDs; Remedies for Breach of FD 9 (Formative II) (5)
Q 2018: ‘It may be appropriate for a higher court one day to revisit the rule on secret profits And to
make it less inflexible in appropriate circumstances, where the unqualified operation of the rule
operates particularly harshly and where the result is not compatible with the desire of modern
courts to ensure that remedies are proportionate to the justice of the case and where this does not
conflict with some other overriding policy objective of the rule in question.’ (Arden LJ in Murad v Al-
Saraj (2005).) What remedies should be available to a principal against a fiduciary who has made
secret profits? Is the law satisfactory?
INTRO:
LJ Arden Murad v Al-Saraj; strict no profit rule governing F excessively harsh
current law: stringent obligations: F must disgorge all unauthorised profits to P regardless of
intent or incidental benefit to P
o inflexibility => important deterrent + protective function reflects vulnerability of P in
FR
o BUT: prophylactic nature of no-profit rule remains essential to preserve trust and
deter conflict of interest
o mitigate strictness w/out undermining core principles e.g. defences like informed
consent/equitable allowance
Main argument: the law though broadly satisfactory could better balance fairness and
deterrence by limiting liability where F’s gain is too remote, aligning outcomes more closely
w/ proportional justice
WHY THE NO PROFIT RULE IS NEEDED:
unauthorised profits made by F due to their role must return to P - Keech v Sandford (F
disgorge all profits made from sublease) => stringency of rule
o F attempted to obtain sublease for the P but request refused by sublessor
o recognised unfairness of case but reiterated need for absolute rule to pre-remove
motivation for other F to profit from their position
reasoning behind no profit rule justifies initial stringency
o policy + advantageous remedies focus on prophylactic nature of FDs
o courts aim to deter F from breaching position + ensure Ps protected
o strictness of rule/remedies should be retained to ensure Fs don’t allow their
interests to conflict w/ duty
o important bc F holds power over P’s affairs + shouldn’t abuse their power to profit
from it
o nature of FDs act w/ loyalty cant be done if F tempted to self-serve => strict
remedies upheld to preserve purpose of F rules
o Smith: law forbids person who controls another person’s life to use P as if they were
‘pecuniary assets’ => reflects compelling policy reason underlying harsh F rules and
advantageous remedies -> F need limits to their vast power over another’s financial
autonomy
WHICH REMEDIES SHOULD BE AVAILABLE AND WHY THE LAW IS SATISFACTORY IN AWARDING THEM:
remedies: no-profit rule, accounts of profits, constructive trusts, recission + equitable
compensation
extremely advantageous to P and viewed as harsh to F
o each remedy necessary: protects P in many situations, to get remedy F must have
specifically breach FD not general duty => somewhat limits scope avoids excessively
wide usage of remedies
Accounts of profits
