Captain Tom Foundation: trustee disqualification

On 3 July 2024, following a flurry of news outlets reporting on a press release from the Ingram-Moore family, the Charity Commission confirmed that both Hannah and Colin Ingram-Moore have been disqualified as charity trustees for 10 and 8 years respectively.

The following morning, for both BBC Three Counties Radio (at the breakfast show with Andy Collins) and LBC (at the breakfast show with Nick Ferrari), I was invited to provide answers to questions about what the disqualification means, how the Commission reached the decision, and implications for the couple.

In this article, I provide more detail about what has happened in this case and how the Charity Commission takes decisions about disqualification of charity trustees.

Disqualification of Hannah and Colin Ingram-Moore

The Captain Tom Foundation has been the subject of a Charity Commission statutory inquiry since 16 June 2022. To read more about what went wrong and why the Commission is investigating the charity, see our article, Captain Tom: where did the money go?

The statutory inquiry is ongoing, but the Commission has already disqualified both Hannah and Colin Ingram-Moore. This is relatively unusual, so in announcing its decision the Commission explained why regulatory action has been taken during the inquiry rather than waiting until its conclusion: “This is good practice as it ensures that any representations made can be factored into the overall findings of the inquiry before, for example, an inquiry report is placed into the public domain”.

The family has said that they “fundamentally disagree” with the decision made by the Charity Commission but has taken the “extremely difficult” decision not to appeal because the “profound emotional upheaval and financial burden make such a course of action untenable”.

Why were the Ingram-Moores disqualified?

The Commission confirmed that “the legal test for disqualification was met because there has been misconduct and/or mismanagement, the individuals are not fit to be a trustee or hold senior management functions, and disqualification is in the public interest.”

This statement covers the three limbs of the statutory test for discretionary disqualification. However, specific details regarding how and why the Commission decided that the test was satisfied are not currently available because the Commission “cannot disclose further information about the findings of the inquiry while it is ongoing.”

At this stage, any commentary about why the couple have been disqualified would, therefore, be mere speculation. We need to await the publication of the Commission’s statutory inquiry report before we will know for certain what went wrong and why the Commission considered it to be serious enough that disqualification orders were considered necessary, proportionate and appropriate. However, we can infer from the length of the disqualifications how serious the Commission considered the misconduct and/or mismanagement to be in this case.

In the remainder of this article, I will explain how the Commission takes discretionary disqualification decisions and what that tells us about the disqualification of Hannah and Colin Ingram-Moore at this stage.

What is the discretionary disqualification power?

The power for the Charity Commission to disqualify charity trustees was introduced by section 10 of the Charities (Protection and Social Investment) Act 2016, which amended the Charities Act 2011 by inserting a new section 181A that came into effect on 1 October 2016. The Commission may use its statutory discretionary disqualification power independently of its other statutory powers. As such, it is not necessary for a statutory inquiry to be launched first. However, in practice, the power is usually used within the context of an inquiry into serious legal and regulatory failures within a charity.

What is the impact of a disqualification order for the individual?

The power may be used by the Commission to disqualify an individual from acting as a charity trustee for a period of up to 15 years. An order can be made either in respect of all charities or only in relation to specific charities (i.e. disqualifying an individual from acting as a trustee of a particular charity or charities). However, in practice, the Commission usually makes general disqualification orders.

The default position is that a disqualification order will also prohibit the disqualified individual from “holding an office or employment in the charity with senior management functions”. The Commission can expressly waive this prohibition, but rarely does so in practice.

The Charities Act 2011 defines “senior management functions” by reference to either the seniority of the role or control over charity money. In relation to seniority, a role is a senior management function if the individual is not responsible to another officer or employee (below trustee level) for the particular function they perform. In relation to control over charity money, if the individual is responsible to someone more senior but their role involves control over charity money then it will also be caught by the disqualification order.

How does the Commission decide to disqualify someone as a charity trustee?

Three statutory criteria must be met for the Commission to use its discretionary disqualification power. The Commission’s policy is to “be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed” and “considers that this power is aimed at disqualification of persons from being a trustee when their conduct, whether in relation to a charity or more generally, is such that there is a public interest in making a disqualification order so as to protect public trust and confidence in charity”.

The disqualification of an individual is a very serious sanction and, before making a disqualification order, the Commission must have sufficient evidence to demonstrate that all three limbs of the statutory test have been met and “needs to be satisfied on the facts that there are sufficiently serious and substantial grounds that make it necessary or desirable to act”.

The three criteria are as follows:

1. One or more of six conditions must apply.
2. The individual must be deemed “unfit” to be a charity trustee.
3. Making the order must be “desirable in the public interest in order to protect public trust and confidence”.

Statutory criterion 1: the six conditions

The six conditions are set out in full below. In relation to Hannah and Colin Ingram-Moore, the Commission has indicated that the relevant condition in connection with their involvement with the Captain Tom Foundation was condition D, which is the most common ground on which disqualification orders are made.

Condition D requires the Commission to have sufficient evidence of misconduct or mismanagement in the administration of the charity. In most disqualification cases, the Commission finds the person being disqualified guilty of misconduct or mismanagement, but it is possible for this condition to be met where an individual knew about someone else’s misconduct and/or mismanagement and failed to take appropriate action.

The term “misconduct” includes any act (or failure to act) where the individual knew (or should have known) that the conduct in question was “criminal, unlawful or improper”. The term “mismanagement” is broader in scope and applies to any act (or failure to act) that may result in the charity’s assets and resources being misused (including damage to a charity’s reputation) or the charity’s beneficiaries being put at risk.

It is necessary for the misconduct and/or mismanagement to be sufficiently linked to the individual being disqualified. The Commission must be clear about the acts it considers constitute misconduct and/or mismanagement and how the individual in question was “(i) responsible for it; (ii) knew about it and failed to take any reasonable steps to oppose it or (iii) contributed to or facilitated it”. We should therefore expect the Commission to provide more detail as to the reasons for the disqualifications when it eventually publishes its final report following the conclusion of its statutory inquiry into the Captain Tom Foundation.

Statutory criterion 2: fitness to act as a charity trustee

It is very common for the Commission to make findings of misconduct and/or mismanagement in the administration of a charity in statutory inquiries. However, this does not necessarily mean that trustee disqualification will be appropriate and proportionate. It is relatively rare for findings of misconduct and/or mismanagement to result in trustee disqualifications. This is because, in addition to concluding that there is evidence of conduct that meets the first limb of the test, the Commission must also be satisfied that the individual is unfit to be a trustee.

The term “unfit” is not defined in the legislation but the Commission provides guidance on how it assesses a person’s fitness. It is possible to be found “unfit” even where the misconduct and/or mismanagement in question was not deliberate. If the Commission considers that an individual has acted recklessly, negligently or with wilful disregard to the legal and regulatory requirements, it may make a finding of unfitness. However, the Commission makes it clear that honest mistakes will not lead to such a finding:

“It is not the commission’s intention to make a finding of unfitness in relation to well-meaning persons who have made an honest mistake in good faith or who were well-meaning in what they did but made an error in judgment, whether whilst administering a charity or charitable funds or in the context of their work or personal life.”

The Commission also expressly acknowledges that charity trustees are volunteers and recognises the importance of not penalising honest mistakes and misjudgements, particularly where there has not been a significant detrimental impact or consequence for the charity as a result.

In considering a person’s fitness to act as a charity trustee, the Commission “will pay particular regard to evidence concerning the person’s honesty, integrity, competence to discharge their duties as a charity trustee or other conduct that affects their suitability, such as credibility to command as a trustee public trust and confidence in a charity or charities”.

In practice, when looking at competence, the Commission will consider how well a person has complied with the six key duties of charity trustees. The Commission will also consider whether there is any evidence that their honesty or integrity has been materially undermined as a result of their conduct. This includes, for example, “evidence that the person has abused a position, acted improperly or unlawfully, acted in breach of trust or misapplied charity or public funds or funds belonging to others”. The Commission will also consider the impact of the person’s conduct in relation to public trust and confidence in charity, and whether the conduct has damaged their personal credibility and reputation in a way that may create risk for the charity.

Statutory criterion 3: desirable in the public interest

The final limb of the statutory test is likely to be satisfied where the other two criteria are met. However, this criterion aims to ensure that the Commission appropriately considers and satisfies itself that making the disqualification order is necessary to address a genuine risk or concern in the interests of the public.

The Commission’s guidance explains that this final limb of the statutory test “provides a filter for circumstances in which the disqualification would serve no useful purpose or is otherwise not justified on public interest grounds”.

Examples of circumstances that might result in the Commission concluding that it is not in the public interest to make a disqualification order include:

• The person has never had and is not likely to have a relevant relationship with charity.
• The conduct and its impact was exacerbated by circumstances outside the direct control of the person.
• Infirmity due to age or terminal illness.

How does the Commission decide on the period of disqualification?

As noted above, a disqualification order may be made for any period up to 15 years. The Commission’s decision-making in this regard must be proportionate to the seriousness of the misconduct and/or mismanagement identified.

There are three ‘bands’ for disqualification:

1. Upper: over 10 years and up to 15 years
2. Middle: 5-10 years
3. Lower: less than 5 years

The Commission explains that the upper band is “reserved for particularly serious cases”, the middle band “will apply to serious cases which do not merit consideration in the upper band” and the lower band will apply where “a relatively short period of disqualification is proportionate”. A summary of how the Commission considers the relevant factors is set out in the table below.

In addition, there are several “aggravating factors” and “mitigating factors” that will be taken into account. For example, if the person received (or intended to receive) significant personal benefit or if they attempt to mislead or hide relevant information from the Commission, these would be aggravating factors and tend to indicate a higher level of culpability. On the other hand, where a person can demonstrate that they acted in good faith and made genuine and unprompted attempts to remedy the breach, these would be mitigating factors indicating a lower level of culpability. There are various other factors set out in the Commission’s guidance, although the list is not exhaustive.

The Birketts view

It is important to remember that one of the key statutory duties of the Charity Commission is to promote and increase public trust and confidence in charities generally. This is always a key factor in the exercise of its regulatory and enforcement powers and, in our view, will have been a significant factor in relation to the Captain Tom Foundation statutory inquiry. The level of public interest in this case is high and the story has received considerable press attention (and continues to do so).

The Commission rarely exercises its power to disqualify charity trustees and in this case will have done so only on the basis of sufficient evidence of misconduct and/or mismanagement involving Hannah and Colin Ingram-Moore. We can infer from the length of their disqualifications (10 years and 8 years respectively) that the Commission deemed the circumstances to be very serious.

It is likely that the level of public interest in this case, the catastrophic impact on the Captain Tom Foundation (income dropped significantly as the story unfolded in the press and the charity stopped accepting donations once the statutory inquiry was opened), and the resulting threat to public trust and confidence in charities generally were all factors that increased the seriousness of the circumstances. In our view, these factors are also likely to have been relevant when considering their fitness to act as charity trustees. In particular, we would suggest that their credibility as charity trustees has been significantly damaged by the press coverage of the saga as it has unfolded.

It is possible to speculate further as to what might have led to their disqualifications. For example, it is possible that the Commission might have found evidence of private benefit and/or failures in governance during its statutory inquiry. Both factors would tend to increase the seriousness of the case. However, the full details will not be publicly available until the statutory inquiry concludes. We will continue to closely follow the story. So, watch this space for further updates.

The Commission usually includes lessons for the wider sector when it publishes its statutory inquiry reports. In the meantime, we would strongly recommend that charity trustees take time to understand their duties, particularly in relation to the management of conflicts of interests, and seek professional advice where required for transactions and arrangements involving any connected parties. You can access the free Birketts Charity Trustee Induction and Refresher training on our website and get in touch with Liz Brownsell or any member of the Birketts Charities Team for advice.