The Law Commission recently consulted on proposed changes to the Co-operative and Community Benefit Societies Act 2014. Capsticks held a roundtable event with some of its key clients to discuss the proposals and submitted a response to that consultation, representing our clients’ and the wider RP sector’s views. 

The Law Commission has considered our response and invited Capsticks to participate in a select committee to further discuss the proposals ahead of final recommendations being made.  

This select committee has had an early sight of the Law Commission’s revised proposals. It is clear that our representations have been heard and we are pleased to see positive developments to the initial proposals for our clients. 

The key revisions to the initial proposals are as follows:  

• Open to all membership 

The original consultation paper proposed that the definition of a community benefit society should be amended to include a requirement that membership should be voluntary and open to all. We put forward a view against this proposal, which was in line with the majority of responses to the consultation. Within its revised proposals, the Law Commission gives specific acknowledgement to housing associations and the reasons put forward as to why an open membership might not be appropriate for them. The Law Commission has described housing associations’ reasoning as “persuasive” and concludes that it is not appropriate to implement this change into the new definition of community benefit society. In other words, the Law Commission intends to drop the proposed requirement for community benefit societies to have an open membership which should be received as good news by our RP clients. 

• Exempt charity status 

The original consultation paper suggested that exempt charity status should be removed for all community benefit societies and that they should instead register with the Charity Commission.  

Again, our response argued the inappropriateness of this proposal, which reflected our clients’ general view. In its revised proposals, the Law Commission has specifically acknowledged some of the unique challenges that housing associations would face from registered charity status. Within the revised proposals, the Law Commission has concluded that community benefit societies should generally be registered charities regulated by the Charity Commission. However, it is proposing to specifically exclude housing associations from this so that they should continue to exist as exempt charities. The Law Commission has noted that registered housing associations are already well regulated and have specific processes suited to the unique structure of housing associations. Again, this should be seen as good news for our RP clients. 

We are delighted that the Law Commission has listened to the response we made on behalf of our RP clients and that our recommendations have been reflected in the revised proposals. We are also delighted to be invited to participate in the select committee with the Law Commission to further refine the proposals. In that role, we will continue to represent the views of our clients and of the sector to ensure that the final proposals are appropriate. We will provide further updates on the proposals as they evolve. 

Our full response to the Law Commission on the initial proposals can be viewed here.  

How Capsticks can help 

Capsticks aims to be the firm of choice for our housing clients and continues to deliver results that matter.Our expert lawyers will continue to represent the views of our clients to the Law Commission and keep you updated.

If you have any queries around Law Commission, and the impact on your RP organisation, please speak to Darren Hooker and Georgia Moon to find out more about how Capsticks can help.For further information on how we might assist your organisation, please get in touch with Darren Hooker and Georgia Moon.