Voluntary Trustees And Litigation Costs

If charity trustees are volunteers it may be inappropriate to award costs against them in litigation, however it would not be inappropriate merely because their opponent can afford his own costs.

A former charity director brought proceedings against the charity's trustees in the employment tribunal. He had been dismissed when the charity ran out of money and he was owed unpaid salary. The trustees defended the action on the basis that they were not personally liable; they had formed a company limited by guarantee to administer the charity and therefore that company was the liable party. The judge held that this defence could not be maintained on the facts. It was therefore misconceived and it was unreasonable to have maintained it for so long. The judge therefore awarded compensation to the former director, to be paid by the trustees personally.