Disputes concerning charities

Charity disputes can be complex and highly disruptive and it is crucial for disputes to be resolved quickly and in compliance with trustees’ legal duties and responsibilities. Our solicitors work closely with charities, trustees, beneficiaries, and regulators to resolve conflicts efficiently, minimising disruption while safeguarding long-term objectives.

What disputes do charities face?

Charities may be involved in claims with various parties including trustees, beneficiaries and the Charity Commission. The interplay between charity law, trust law and regulatory requirements adds complexity which requires an expert approach.

Whether the issue concerns trustee duties, regulatory investigations or contested legacies, our specialist solicitors provide strategic advice tailored to protect your interests.

Charitable gift disputes

Charitable gifts or legacies provide a valuable source of funding and can also generate significant inheritance tax savings for the donor and reflect their lifetime charitable giving and longstanding intentions. Therefore, if leaving a gift or legacy to charity in your will, it is crucial that the full benefit of such gifts are realised.

There are a range of disputes that could threaten a gift or legacy left to a charity, these include:

Claims under the Inheritance (Provision for Family and Dependants) Act 1975
Challenges to the validity of a will
Challenges to the interpretation or construction of a will
Claims relating to co-owned property
Trust disputes
Proprietary estoppel claims
Statutory wills claims in the Court of Protection

Where a dispute arises in relation to a charitable legacy, our specialist solicitors can help to ensure that the gift and its resulting benefits are protected. We recognise how vital legacy income is and provide cost-effective advice focused on resolving the dispute to your advantage, whilst protecting your reputation.

We work with our specialist charities and social enterprise lawyers to provide comprehensive advice to meet your goals.

Charity trustee and regulatory disputes

The role of a charity trustee is fundamental to the management and performance of a charity. Where disputes in relation to the trustees arise, this can cause significant disruption to the charity and affect its reputation.

There are various reasons why such disputes may arise, these include:

Breach of regulatory policies
Disagreements between trustees
Mismanagement of the trust
Allegations of misconduct against the trustees
Conflicts of interest

Our solicitors have a wealth of experience in representing in charity trustees and can help ensure a timely resolution of disputes, protecting the interests of the charity. If you are facing a dispute regarding charitable trustees or regulation, contact our team to find out how we can help.

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Our clients

We act for a wide range of charities including education & research organisations; health, medical research charities and hospices; philanthropy, legacies and charitable foundations; museums, heritage and art organisations, as well as local regional and community not-for-profit charities and social enterprises.

Some of our clients include:

Institution of Engineering and Technology
Wellcome Trust
British Council
Institute of Mechanical Engineers
Children’s Investment Fund Foundation

Did you know?

Record-breaking

Nearly all of our work is confidential but last year we helped a record number of clients resolve their disputes.

Nationwide

We have specialist solicitors across multiple offices, from London to Norwich to Manchester.

Legal directories

The team is proud to be top rated in the legal directories across large parts of the country.

Our expertise

Agricultural inheritance disputes

Contesting the validity of a will

Contentious landed estates

Contentious probate

Defending an estate

Estate, trust and will disputes

Gifts and financial abuse

Proprietary estoppel

Trust disputes

What our clients say about us

Dealing with complex matters but simplifying them so the client can understand is a key strength of Mills & Reeve.
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Excellent quality across the board and across offices nationwide.
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Meet our estate, trust and will disputes team

Lucinda Brown
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David Catchpole
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Lucy Howard (Partner)
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Simon Pedley
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Claims under the Inheritance Act 1975

Understand your rights under the Inheritance Act. Explore our guide for key steps and considerations.

Read the article

Disputes in the Court of Protection

Protect your loved one’s rights with expert guidance on capacity, deputyship, statutory wills and more.

Read the article

Frequently asked questions

Who pays the costs of litigation?

Charity disputes can be lengthy, acrimonious and expensive. The starting position in relation to costs is that the loser pays. This means that the successful party should usually receive some or all of their costs as part of the settlement or court order. These costs can come from the losing party depending on the circumstances of the case.

However, the court has a wide discretion on what costs order to make, and this can depend on the reasonableness of the costs and the conduct of the parties. If you lose a claim, there's a risk you would be ordered to pay the other side’s costs as well having to pay your own. It's worth exploring all available options to assist with the payment of your legal costs, such as funding arrangements (no win, no fee or deferred fee arrangements), legal expenses insurance or after the event insurance.

What is mediation?

Mediation is a confidential process where parties engaged in a dispute opt, usually voluntarily, to attempt to resolve the dispute outside of the court. During the mediation, a neutral third party (known as a mediator) will attempt to facilitate a settlement by talking to each party separately and encouraging negotiation between them.

It provides a much cheaper, more friendly and less time-consuming alternative to litigation and the outcome is confidential.

How much will a charity dispute cost?

We understand the importance of knowing what you're getting for your money when it comes to your legal budget. We aim to maximise value for you regardless of the help you need, which is why we offer bespoke services that we charge for on a case-by-case basis.

We'll always be transparent with you on what lies ahead, including the financial side.

If you'd like to get an idea of how much things could cost, make an enquiry with our team.

What is a charity trustee?

A charity trustee is a volunteer who makes decisions on behalf of a charity. They are responsible for overseeing the management of the charity and its operations. As part of this, they must ensure that the charity acts in accordance with its objectives, the best interests of the beneficiaries and in accordance with the relevant laws and regulations.

What are the duties of a charity trustee?

Charity trustees have several duties that they must fulfil, including:

Ensuring that the charity is carrying out its purposes for public benefit
Complying with the charity’s governing document and the law
Acting in the best interests of the charity
Managing the resources of the charity responsibly
Acting with reasonable care and skill
Ensuring that the charity is accountable

If these duties are breached, it may result in either civil and/or criminal claims.

Are charity trustees legally protected from claims?

There are several legal safeguards available to charity trustees to protect them against claims. Where the charity is a company or an incorporated organisation, the trustees will have limited liability, meaning that they will not be personally liable for any claims and their liability will be restricted to the trust assets.

However, if the charity is unincorporated, the trustees will potentially have unlimited personal liability for any breaches. In such circumstances, the trustees may be covered by an insurance policy or indemnity in place to cover personal liability.

What is the role of the Charity Commission?

The Charity Commission oversees charities and ensures that they are acting in accordance with their legal obligations. If a charity is performing poorly or beaching its obligations, the Commission may launch an inquiry and potentially take legal action.

The Charity Commission can also assist in resolving disputes by providing advice and guidance where there are no trustees in place and all attempts to resolve the dispute have failed.

However, if a dispute relates to trustees’ decisions or policies, the Charity Commission will not assist in resolving the dispute.

Why might the Charity Commission investigate a charity?

There are several reasons why the Charity Commission may launch an investigation, including:

Failure to file annual reports and accounts or issues relating to them
The charity filed a serious incident report
A complaint has been filed
Negative media coverage
The charity operates in a high-risk area (ie conflict zones)
Another regulator has filed a report

What is a charitable gift?

A charitable gift is a gift left to charity by an individual in their will. These gifts can either be left to a specific charity, or it can be left for the trustees to select an appropriate charity.

Such gifts could include:

Money
Assets or property
A share of the residuary estate

It is important to note that any funds or assets gifted to charity will not be chargeable to inheritance tax (IHT).

How do gifts to charity reduce inheritance tax (IHT)?

Where a charitable gift is 10% or more of the donor’s net estate, the rate of IHT that applies to the entire estate will be reduced from 40% to 36%. This can result in a substantially lower IHT charge and so protecting such gifts can be in the interest of the donor’s estate and its beneficiaries.

Note that even if the will does not leave 10% to charity, it is possible for the will to be varied within two years after death to increase the amount given to charity to 10% to secure the reduced rate of IHT where this will benefit the estate.

What risks arise when defending a charitable gift?

Where a challenge has arisen, it will first be necessary to identify the charity’s prospect of successfully defending the claim by assessing the nature of the challenge and the evidence available to support this claim.

It is important to establish the value of the gift left to a charity before deciding whether or not to dispute them. Where the gift is relatively small, there is a risk that the costs of litigation and/or damage to the charity’s reputation could outweigh the benefit of the gift.