Charities Bill [HL]

My Lords, I shall address both amendments. Amendment No. 87 seeks to add to the general law as regards liability for the liabilities of a charity, in the circumstances where the property of that charity is being transferred to another charity in the context of a registered merger. The noble Lord has explained his amendment clearly. As we see it, it would make the charity trustees of the transferor charity jointly and severally liable for its liabilities, in addition to whoever else (if anyone) would be so liable under the general law, in any case where those trustees had failed, as part of the merger process, to make ““appropriate arrangements”” for the discharge of those liabilities. I assume that the trustees would have the usual right to an indemnity out of the charity property, but they would still have the primary liability to settle the debts, and would have a personal liability in the event that they were unable to enforce their indemnity. We cannot see the justification for giving creditors a potentially additional selection of people to sue, simply because the option to register the merger is exercised, and the ““appropriate arrangements”” have not been made. Charities can go out of existence for reasons other than merger, and the general law would then simply take its course as regards the enforcement of any liabilities of the charity which are left outstanding. If creditors are given rights which they would not otherwise have had to sue trustees simply because the option to register the merger is exercised, and the ““appropriate arrangements”” have not been made, registration of charity mergers will be discouraged, and the beneficial purpose of these provisions will be undermined. For those reasons, I would invite the noble Lord to withdraw his Amendment No. 87. I shall now deal with Amendment No. 88 in the group. Charities—