Author Archives: johnpicton55

Charity Insolvency and the Community Good

John Picton

This is a ‘throwing it out there’ piece. Thoughts remain in need of refinement.

Charity insolvency has never been the focus of sustained policy attention. Governed alternatively by company and trusts law, no tailored regime exists. Although there has been a lack of interest in charity insolvency, the picture is brighter elsewhere. In the context of commercial insolvency, a considerable body of critical literature has developed, emphasising the public interests at stake in winding up, and the importance of corporate ‘rescue’ where it is possible. This approach is self-consciously communitarian: rather than looking at insolvency as a legal event upon which property is distributed to entitled creditor, it looks at the impact of closure on wider societal interests.

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Where There’s A Will…

John Picton: Liverpool University

It is relatively common for people to leave gifts to charity; 7% of wills contain such a legacy. Rarely the focus of policy discussion, testamentary donation is of considerable importance. The sums involved are large; gifts are often given as a percentage of the deceased’s estate. Normally things go smoothly, so that in the great majority of cases, the executor will distribute the gift without any hitch. Even so, where things go wrong, the law is surprisingly hostile to charity. It might allow gifts that have been expressly dedicated to charity to be passed into private hands.

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Cy-Pres and the Redistribution of Charitable Wealth

John Picton: Liverpool University

The charitable cy-pres doctrine permits the alteration of trust purposes. It is a complex and famously technical area of law. It was described as ‘arcane’ by Lord Diplock, and as ‘metaphysics’ by Lord Neuberger. But it is important. It permits trusts to be changed. It is also a powerful mechanism. Where once weak common law rules inhibited reform, under statute, it has real teeth. Since the enactment of pioneering legislation in the 1960s, it has been possible to reform trusts on the straightforward basis that they are unsuitable or ineffective. That broad and discretionary standard promotes active trust reform.

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