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Philanthropist couple’s charity battle resolved in landmark case

30 July 2020
Categories: Legal News , Charities
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The Supreme Court has clarified the duties of charity members, in a landmark case concerning a wealthy philanthropic couple whose marriage breakdown caused management difficulties for their charity

The Children’s Investment Fund Foundation (UK), which has more than $4bn assets, helps children in developing countries. It was set up by Sir Christopher Hohn and Jamie Cooper. When the couple broke up, they agreed Cooper would resign as a member and trustee in return for a $360m grant from the charity to a charity founded by Cooper, Big Win Philanthropy. However, the plan was scuppered when one of the three members, Dr Marko Lehtimäki, refused to vote in favour of it. The other two members, Hohn and Cooper, had to recuse themselves from the vote.

The dispute went to trial―the central issue being whether the court could direct members of a charity on how to exercise their powers absent a breach of fiduciary duty. Ruling in Lehtimäki & Ors v Cooper [2020] UKSC 33, the Supreme Court held that it could.

Bates Wells partner Leticia Jennings, who acted for Cooper, said: ‘This is the most important charity law case in many years.

‘It has clarified many issues relating to members of charitable companies and their duties, as well as resolving frictions found in company law when it comes to charitable companies. This was the right decision in law and the right decision for charity.

‘The conclusion of this case results in a total of $440m available for Big Win Philanthropy’s important work.’

Bates Wells’ Head of Charity and Social Enterprise, Philip Kirkpatrick said: ‘The issue here is actually surprisingly simple.

‘The Supreme Court has confirmed that the courts can control the members of charitable companies just as it can control their trustees. Charitable companies are different from other companies and their members do not have a special status standing outside the charity but are part of its administrative machinery.’

Categories: Legal News , Charities
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