The Act Commentary on Sections Section 38: Power of Commission to relieve trustees, auditors etc. from liability for breach of trust or duty
160.Currently a charity trustee seeking relief from personal liability for a breach of trust must apply to the court. The court can grant relief, where it believes that the trustee has acted honestly and reasonably and ought fairly to be excused, under section 61 of the Trustee Act 1925 or, for directors of charitable companies, section 727 of the Companies Act 1985. The Charity Commission does not currently have the power to grant relief in that way.
161.This section provides the Commission with such a power. It inserts a new section, 73D, into the 1993 Act. Section 73D confers power on the Charity Commission to provide relief from liability (in whole or in part) to a trustee for breach of trust or duty, where the trustee has acted honestly and reasonably, and where the trustee ought fairly to be excused for the breach. It also extends that power to apply to persons appointed by a charity (under section 43 of the Charities Act 1993) as auditor or independent examiner and to persons appointed by a charitable company (under Chapter 5 of Part 11 of the Companies Act 1985) as auditor or reporting accountant.
162.This section also inserts into the 1993 Act new section 73E, which extends the court’s existing power to grant relief to an auditor or independent examiner of an unincorporated charity appointed under the current section 43 of the Charities Act 1993. New section 73E gives the court power to relieve from liability all those who report on the accounts (including group accounts) where the court does not already have this power under section 727 of the Companies Act 1985. It also gives the court power to relieve from liability the charity trustees of a CIO.