Trustee liability

Civilian Committee
1

Just wondering what the general consensus might be on this one.

According to Charity Commission guidance, (which reflects the requirements of charity law) Charity Trustees are personally liable and are authorised in Law, to take action to recover any lost funds or assets. Trustees may pursue legal action where necessary, to protect their own interests and that of their beneficiaries.

It seems that the Civcoms manage individual independent charities and are then the Trustees of that Charity, which means that as Trustees, they assume all the legal responsibilities and are accountable to the Charity Commission.

Some confusion arises, in that latterly as Trustees, Civcoms have been projected as having certain accountabilities within the ACO, although these are not defined. Being Independent but having accountability to an organisation (other than the Charity Regulator ) are actually not quite what the Law is about.

Under ACP10 it appears that a Cash Handling Certificate can be issued (usually to the Sqn OC) and the impression is given is that this is a rule of the ACO. However under Charity Law, Trustees can agree a delegated authority, which means that whoever receives this authority, is then actually accountable to the Trustees under Charity Law. A Cash Handling Certificate is then a delegated authority under Charity Law, and cannot be an authority given by the ACO, because the ACO is not the Charity, and the ACO should have no involvement in the running of individual charities.

So the question is that by giving a delegated responsibility to the a member of the RAFAC, does this immediately place the MOD in a position of liability and should it then be in a position to replace any lost property or assets covered by a delegated authority, and thereby absolve Trustees from that liability.

Would it also suggest that Trustee Indemnity Insurance is a slightly pointless personal expense.

ACP10/11 are not at all clear on many aspects to the casual reader, but there are issues which appear to suggest that the supporting Charities are not fully independent of control by the ACO.

2

My opinion… I couldn’t care less aslong as it made delivering the cadet experience easier… I trust the legal bods in the ivory towers to advise us as they see fit.

4 Likes
3

This sounds like something that would only really matter if money was going missing or something was going very terribly wrong…

In most cases if it got to arguing about this level of detail, after something going wrong, either the staff or civ com involved would most likely just resign, and that would likely be the end of it.

I have enough policy to worry about just delivering the cadet experience… I trust my chair, treasurer and secretary to support me doing that… not distracting the squadron by arguing detail like this with the chain of command.

Although I do appreciate it is important that the legal items are ticked off - given how big the organisation is, and how long we’ve been running for, one would assume if there were any gaping legal loop holes they would have been found by now and addressed by either the charity commission or the organisation.

4

I concur.

I would say it doesn’t matter what impression is given by ACP10. Which ever way one looks at it the outcome is the same - that a cash handling certificate is perfectly permissible.

Probably not. The trustees are choosing to delegate authority to OC 123 Sqn, who cannot accept liability on behalf of the MOD. They can only accept their own personal liability.

I very much doubt it. Where the trustees are responsible, part of the responsibility would be to ensure that delegated authorities are properly considered. I doubt that the argument “Not my fault guv… How did I know that the guy I authorised to access the petty cash was a crook?” would hold up anywhere.
Even less so if it were followed by “…Well…yes… I did give authority for him to hold £2000 cash on the Squadron.”

Further, I would suggest that - because the charity exists only to manage the funds which have one sole beneficiary - the squadron - then giving access to petty cash is akin to saying “Here you go; this is Sqn money, for the Sqn’s benefit… Have £20 [or whatever] of it in cash and when you get an excess just deposit that excess back with us”.
Does the squadron take on a liability when accepting benefit from the charity? Liability for what? Spending it’s own money?

Really though, for Sqn cash handling we’re talking about relatively small amounts, so it’s a bit academic.

That is a judgement for the individual trustee, surely…
But my thought would be: What happens when the treasurer of 123 Sqn does a runner with £10,000; or, I don’t know, gives it to a Rugby Club, or something?
When 123 Sqn, or an agent acting on their behalf such as HQ Somewhere Wing ATC takes the CivCom to task saying “One of your number has stolen funds which are legally and solely for the benefit of 123 Sqn…” would you, as a trustee, want to be personally liable? Or would you rather have insurance?

One might even ask whether OC 123 should consider taking insurance, in case the petty cash is lost whilst in their control. Though, for ÂŁ20 petty cash, few, if any, would consider it a worthwhile expense.

6 Likes
5

As a prospective treasurer for CivCom, I quote from ACP 11, section 24.c (2)

[
(2) The purchase of indemnity insurance for the Committee members against any liability, by virtue of any rule of law, would otherwise attach to a Committee member or other officer in respect of any negligence, default, breach of duty or breach of trust of which he or she may be guilty in relation to the Charity but excluding:

(a) Fines.

(b) Costs of unsuccessfully defending criminal prosecutions for offences arising out of fraud, dishonesty or wilful or reckless misconduct of the Committee members or other officer.

(c) Liabilities to the non-public fund that result from conduct that the Committee member or other officer knew, or ought to have known, was not in the best interests of the Charity, or in respect of which the person concerned did not care whether that conduct was in the best interests of the Charity or not.
]

This suggests the CivCom will pay for indemnity insurance; does this protect my personal assets from negligence of others wrong-doing?

But I would ask that someone translates (c) for me?

6

Never known a civ com take out this insurance.

Simples.

Dont defraud or steal the money.
That’s it.

7

I would read c as saying that: insurance would not cover a committee member if they knowingly wasted / misused /&c charity funds; or that they unknowingly spent funds on something which they really should have known was a waste.

For example… If someone took charity money, and ‘invested’ it on “Darling Pretty”, running in the 12:30 at Epsom and then lost that money; indemnity insurance wouldn’t cover their loss; Whether they genuinely thought it was a good idea or not.

1 Like
8

I’d never take on a trustee role that didn’t offer it.

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9

Its offered.

Just never seen it taken up.

Would love to know if any Sqn Cdrs on here know for sure if their civ coms have taken this out.

And why.

10

Mine has.

I saw a comment ref to it being paid.

I t was already in place when I took over to no idea as to the why they chose to.

11

… check the books…

:rofl::joy::rofl::joy::rofl::joy:

12

The thing is, it’s very difficult getting trusts law right. And you may do X thinking it was legit, only to find the high court voiding your actions, and then you’d be stuffed.

The insurance is key.

2 Likes
13

Hmm.

Might have to take another look at this then.

2 Likes
14

Many people will in their professional capacity hold indemnity insurance either personally or via their employer. Should something they advise or a product they sell cause losses, regardless of if it “should have been right” they are generally covered against any claims.

Much the same here - any trustee regardless of their innocence or intent regarding any loss would be protected.

“I didn’t run off with the money”
“…but you appointed the treasurer who did and made them a signatory”
“we thought we were protected as we have two signatories”
“did you not realise they were cousins?”

Or

Sqn OC requested funds for a vehicle for transporting cadets and staff to and from events… Didn’t sufficiently check what he was getting and now has a Focus RS parked at the unit for weekends.

Stuff like that I guess?

1 Like
15

Woahhhhh

I thought I was annon…

:stuck_out_tongue_winking_eye:

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16

Question.

Why doesn’t HQAC, automatically indemnify all civ com trustees?

A bulk insurance deal would be far cheaper.
Just add 2p per month to each cadets subs to Wing!

17

Because they are Trustees of the individual Sqn Charity, and nothing to do with HQAC, it would be seen as “meddling”

18

A cover up

19

Haha
Suppose

20

I thought most of what we did was self indemnified anyway?