Charities and Litigation

Charities, just like any other commercial organisation, may come across issues such as: breach of contract; employment issues, property disputes and many more. Legal action is often likely to be a significant risk to a charity, its reputation, and its trustees.

When faced with a potential claim, either in the making or defending of legal action, charity trustees must make every decision based on what would be in the best interest of the charity. This, along with all of the other legal obligations that trustees have, governs each decision that is made, or not made, by the trustees, at every point when dealing with the matter in dispute.

Trustees should ascertain whether other options such as negotiation and mediation, are feasible. In order to make informed decisions, trustees should consider legal advice even at early stages of a dispute, particularly if the trustees are not experts in the area of dispute. By not taking legal advice at an early stage trustees may risk jeopardising the best interest of the charity. In certain circumstances it may even be a legal requirement for the trustees to take appropriate advice.

Legal advisers can help trustees explore the options of resolving the dispute and provide tailored advice about the options available to the charity and our expert recommendation about the most appropriate route for the charity to take.. When there are tight time constraints, trustees should not delay seeking legal advice, if necessary.

Trustees need to have proper consideration and management of the potential costs involved. Trustees should ask their legal advisors for reasonable cost estimates and find out whether they have legal expenses cover under any insurance policy that the charity may have. It is important trustees understand that even if they successfully make or defend a claim, not all of the costs incurred will be recoverable, if any.

In certain circumstances, trustees should consider whether it is necessary to obtain consent or advice from the Charity Commission before deciding to litigate, such as for an order to authorise the use of charity funds for litigation.

Trustees should also be wary that they can be held personally liable for any consequences or losses that may result if the trustees breach their legal duties and make ill-founded decisions in relation to the dispute.

The Charity Commission have issued a checklist for trustees to help them with deciding whether or not to make or defend a claim.

The decision to litigate is not an easy decision for trustees to make and although it needs to be carefully balanced with all factors, it will not be, in most cases, in the best interest of the charity to delay or avoid dealing with the dispute or to delay the decision about whether it is in the charity’s best interest to engage in pre action correspondence or start legal proceedings.

Should you have a litigation matter involving matters of charity law please contact member of the team on 0207 467 5765

Share this article

Submit to FacebookSubmit to TwitterSubmit to LinkedIn

City office

Ronald Fletcher Baker LLP
326 Old Street
London EC1V 9DR

020 7613 1402

020 7613 2711  


West End office

Ronald Fletcher Baker LLP
77A Baker Street
London W1U 6RF
DX: 42722 Oxford Circus North

020 7467 5757

020 7467 5758

Manchester office

Ronald Fletcher Baker LLP
111 Piccadilly
Manchester M1 2HY

DX: 6967003 Manchester 94 M

0161 694 4404

0161 638 0930

Istanbul Office

Ronald Fletcher Baker Danismanlik Hizmetleri Avukatlik Ortakligi
Hakki Yeten Caddesii
Selenium Plaza, No:10 C
K:16, Fulya Sokak
Sisli, Istanbul.

07736 364222

Emergency number

07538 490647

Ronald Fletcher Baker LLP is authorised and regulated by the Solicitors Regulation Authority. Company number OC345891

City office ID 512598
West End office ID 523362.
Manchester office ID 630156

V.A.T. registration number: 2206798 63VAT

"Partner" denotes a senior member of the LLP or an employee with the equivalent standing.

PII cover - QBE Insurance (Europe) Limited and others. For further details please contact Rakeebah Rahim

Solicitors Regulation Authority Standards and Regulations

Website design by coolgrey

Photography: Camilla Greenwell


Get a free conveyancing quote


View our privacy policy

We encourage you to contact us in the first instance if you are unhappy with the service you receive from us. Contact John O’Callaghan, the complaints partner at; alternatively in some circumstances you may be able to make use of the ODR platform.