The Charities Act 1993 section 96(1) defines a “charity” as “any institution, corporate or not, which is established for charitable purposes and is subject to the control of the High Court in the exercise of the court’s jurisdiction with respect to charities”.

This definition is, with some changes, replicated in Clause 1.

It follows from this that an organisation does not need to be registered with the Charity Commission in order to have charitable status.

By contrast, Clause 103 of the Charities and Trustee Investment (Scotland) Bill (“the Scottish Bill”) defines a “charity” as “a body entered into the Register” – i.e. the Scottish Charity Register, to be administered by the Office of the Scottish Charity Regulator (OSCR). It follows from this that, even if an organisation is established for purposes that are charitable under Scottish law, it will only be a charity, for the purposes of Scottish law, if it is registered with OSCR.

It can be seen from this that the way in which charitable status is ‘obtained’ in the two jurisdictions is quite different.

Clause 2

The amendment does not refer to Clause 2 of the Bill, but it is worth pointing out that the definition of what is charitable in the Charities Bill differs from the equivalent definition in the Scottish Bill.

Some of the listed charitable purposes are different:

7.1 Where the Charities Bill (Clause 2(2)(d)) refers to “the advancement of health and the saving of lives”, the Scottish Bill (Clause 7(2)(d) refers simply to “the advancement of health”.

7.2 The Charities Bill (sub-Clause (2)(e)) has “advancement of citizenship or community development”; the Scottish Bill (sub-Clause (2)(e)) has “advancement of civic responsibility or community development”.

7.3 The Scottish Bill (sub-Clause (2)(h) does not contain the words “or the promotion of religious or racial harmony or equality or diversity”, present in the equivalent English head (sub-Clause (2)(h)).

7.4 In the Charities Bill, the head in sub-Clause (2)(j) is not restricted to the provision of accommodation (though sub-Clause (3)(d) states that the head includes this). Sub-Clause (2)(j) of the Scottish Bill restricts this head to the provision of accommodation and, unlike its English counterpart, does not allow provision to be made for those who need help by reason of “youth”.

7.5 Sub-Clause (k) of the Scottish Bill makes the “provision of care to the aged, people with a disability, young people or children” a charitable head. There is no equivalent in the English Bill.

7.6 In the 'sweep-up' category of the Scottish Bill (sub-Clause (2)(m)), there is no mention of the Recreational Charities Act 1958 and no provision that charitable purposes will include purposes that are (a) 'analogies of analogies' of (b) purposes “within the spirit of” the listed charitable heads. (Section 6(2) of the Recreational Charities Act 1958 extends sections 1 and 2 of that Act to Scotland, so far as taxation matters are concerned.)

9. It is difficult to say whether these differences will lead to significant divergence in the laws of Scotland and England/Wales, since this will depend on the way in which their respective regulators (and courts) interpret the provisions. However, the use of different wording paves the way for greater divergence. If there is any intention or desire to unify charity law throughout Great Britain, it is absurd to start off with anything other than identical statutory provisions in both jurisdictions.

There are also differences between the English and Scottish Bills in the way that public benefit is dealt with.

The English Bill makes no provision regarding the public benefit test, relying on established case law and, in Clause 4, giving the Charity Commission the task of producing guidance on public benefit.

Clause 8(2) of the Scottish Bill sets out broad guidance on matters to be taken into consideration when deciding whether or not an organisation provides public benefit.

Again, it is hard to say how the laws of the two countries may diverge. The provisions of the Scottish Bill are at a very high level and are not said to constitute exclusive criteria. Nevertheless, using different provisions means that the laws of Scotland and England/Wales are starting off on a different footing and will inevitably continue to diverge. It makes far more sense to have uniformity throughout Great Britain.

As was mentioned during second reading of the Charities Bill, a number of dangers arise from putting written guidance on public benefit into primary legislation. Firstly, through centuries of judicial decisions, the law on public benefit has evolved as a subtle creature. The nuances present in current case law will be overridden by any definition contained in primary legislation, creating uncertainty in the law. Even if what is included in the legislation purports to do no more than reiterate the current law, the conventions of statutory interpretation are that, by including something in the legislation, Parliament intended to alter the law. The nature and extent of that alteration would be unclear, leaving the law in confusion.

Secondly, any statutory definition will almost certainly become obsolete, as ideas on what is good for society change.

The best way to preserve the subtleties of the public benefit test, and ensure that the concept does not ossify, is to remove the public benefit test provisions from the Scottish Bill.