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Museums, restitution and the new Charities Act

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Institute of Art & Law 25 September 2022
By Alexander Herman

An important change to charity law that will affect the ability of museums in England and Wales to return collection items was passed by Parliament in February as part of the Charities Act 2022 and is due to come into force this autumn. Charity law is especially important in the cultural sector because most museums operate as charities. Charity law therefore affects the duties and powers of museum trustees who are the ultimate decision-makers within museums. This is true whether the museum is established as a charitable trust or, as in the case of nearly all national museums, is governed by statute. An example of the latter is the British Museum, governed by the British Museum Act 1963, which sets out a general prohibition on the disposal of collection objects (at section 3(4)), with only a narrow set of exceptions.

The principal legislation affecting charities in England and Wales is the Charities Act 2011.  Currently, under section 106, charity trustees have the ability to seek authorisation from the Charity Commission if they feel compelled by a moral obligation to make a transfer of charity property. Such transfers are known as ‘ex gratia payments’ (though note they relate to applications of charity property generally, so not just cash ‘payments’ in the strict sense). An example of an ex gratia transfer might involve museum trustees agreeing to return a collection item to its country of origin for moral reasons, despite such an act falling outside the charitable objects of the museum.

The new Charities Act 2022 will make changes to this regime. One change will be to allow trustees, of their own accord, to make ex gratia transfers of ‘low valued’ property, with the value threshold dependent upon the gross income of the charity (e.g. property worth up to £20,000 for museums with over £1 million in gross income), to be set out in the new section 331A. For higher valued property, the trustees will still need authorisation from the Charity Commission, Attorney General or Court.

Critically, the new Act will allow authorisation to be obtained by trustees of charities established by legislation that would otherwise prohibit the disposal of property – e.g. national institutions.

For those who know the longstanding debate around restitution in the UK, this may come as a surprise. It has long been said that most national institutions were unable to return collection objects due to restrictions imposed by statute. This has been raised for many years by the British Museum, for example, in response to Greece’s pleas for the return of the Parthenon Marbles. Objects cannot be removed from the collection, went the response, unless Parliament amends a prohibition found within the British Museum Act 1963 on disposing of objects ‘vested in the Trustees as part of the collections’ (the language of section 3(4)). The follow-up response from the UK Government has always been that it has no intention of introducing amending legislation. And so it has gone, for many years. Until now, it seems – or rather, soon (as implementation is expected for the autumn).

The change affecting trustees of national museums is remarkable. It will effectively override a 2005 decision from the High Court, Attorney General v. Trustees of the British Museum. In that case, the British Museum Trustees sought clarification from the Attorney General, who himself sought a decision from the Court, as to whether the Trustees could return property based on a moral obligation, viz. the ex gratia principle arising from charity law in the case of Re Snowden (precursor to section 106 of the Charities Act 2011). But the Court was categorical that the Trustees could not use the ex gratia principle to circumvent the restriction on disposals set out in the British Museum Act 1963.

The Charities Act 2022 came as the result of a consultation by the Law Commission that led to a 2017 report entitled Technical Issues in Charity Law. In the report, the Law Commission was critical of the 2005 High Court decision, and the Commission was supported by 27 of 28 consultees at the time. It was felt the decision had created a false distinction between statutory charities (like national museums) and all other charities when it came to making ex gratia payments. The Law Commission’s position has been vindicated by the new Act, which makes clear that authorisation for statutory charities can be sought via section 106. This is emphasised in the Explanatory Notes, which explain that the ‘stand-alone statutory power’ is exercisable in relation to ‘any charity’, including those with restrictions in their governing Act [see the Explanatory Notes at para 107].

This means that trustees of national museums will soon be able to seek authorisation through section 106 to return collection objects if they are motivated by a moral obligation to return – and for low-valued objects, under section 331A, they would be able to do so without authorisation. Either avenue might be useful, depending on the case, for instance in relation to objects looted or stolen many years earlier, where a legal claim has expired (e.g. through the operation of the limitation period), but the ‘moral claim’ remains strong.

A word of caution though. Ex gratia payments remain at the discretion of trustees and so cannot be forced by a third party, such as a claimant seeking restitution. And decisions to make ex gratia payments are, according to the Court in Re Snowden, ‘not to be exercised lightly or on slender grounds’, a phrase repeated in Charity Commission guidance. So, despite the new Act, returns of this nature will remain relatively exceptional. They will nevertheless be possible in a way not heretofore countenanced. Of special interest are the recent section 106 applications by Jesus College, Cambridge and the Horniman Museum, two charitable institutions that received Charity Commission approval to transfer Benin Bronzes back to Nigeria within the past year. Neither institution is restricted from disposing of objects by statute, but the results nevertheless indicate an openness by the Charity Commission to consider such applications in relation to restitution.

How will trustees demonstrate a ‘moral obligation’ going forward? Current guidance from the Charity Commission explains that they will need to establish this through ‘clear and impartial’ evidence, including a statement setting out the trustees’ belief in the existence of a moral obligation and a copy of the minutes of the meeting in which this was decided. That said, the test for determining moral obligation will soon change as well, thanks again to the 2022 Act, from a subjective one (based on the trustees’ own belief) to an objective one (based on a reasonably held belief), which will allow greater scope for trustees to delegate decision-making and for outside bodies like the Commission to review decisions. So this will need to be taken into consideration.

With that in mind, trustees making such decisions would be wise to consider sector guidance on the ethics of restitution and repatriation. This can be found, in a limited sense, in the Codes of Ethics of both the International Council of Museums and the UK’s Museums Association. Guidance on the ethical assessment of a claim is set out in more detail within the recent Arts Council England document, Restitution and Repatriation: A practical guide for museums in England at pp 14–17. An ‘ethical assessment’ should thus include consideration of four factors: (1) the significance of the object to the claimant, (2) how the object was removed from its place of origin or past owner, (3) how the museum has engaged with the object and (4) the position of the person raising the claim. After assessing these factors together, should trustees conclude that return is the morally just outcome, this would hopefully be considered objectively defensible under section 106, thus passing muster with the Charity Commission, or else providing trustees with sufficient comfort in making their own decision in relation to low-valued property under section 331A.

So change is definitely afoot. The 2022 Act will not lead to the restitution of vast amounts of museum material, since the ex gratia power can be used only in rare cases. But the additional tools will nevertheless prove useful to trustees who, until now, may have felt handcuffed by the legal restrictions of their governing statutes. And it should be remembered that other possibilities for returning collection objects remain: for instance the ‘unfit’ statutory exception and applications to the Charity Commission under section 105 of the Charities Act 2011.

It is often said that morality changes faster than the law. Here we have an example of the law playing catch-up: or at least, very shortly, allowing decision-makers of national institutions to be guided by their moral sense of right and wrong, rather than be faced with a strict legal impediment which banishes morality to the sidelines. Beginning shortly, trustees will be able to act confidently in these matters, with morality in the forefront of their considerations on restitution. Perhaps that is where it always belonged.

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The above is an abbreviated version of a much more detailed article of mine that will be published in the October 2022 issue of the law journal Art Antiquity and Law. The article provides more analysis on ex gratia payments, the other changes introduced by the Charities Act 2022, the specific applications made to the Charity Commission by Jesus College, Cambridge and the Horniman Museum, and the possibility of section 105 applications, with suggestions for museums and trustees going forward.


https://ial.uk.com/museums-restitution-and-the-new-charities-act/
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