UK: Court of Appeal Dismisses Judicial Review Challenge To Grant Of Royal Charter

In R (Project Management Institute) v Minister for the Cabinet Office and others [2016] EWCA Civ 21, the Court of Appeal upheld a decision of the Privy Council to recommend the grant of a Royal Charter to a charitable professional association. This was the first time that a decision to grant a Royal Charter had been challenged in the court.

The Privy Council had recommended the grant of a Royal Charter to the Association for Project Management ('APM'), a professional association structured as a charitable company. This decision was later challenged by way of judicial review by a competing professional association, the Project Management Institute ('PMI').

Background

At present, Royal Charters are granted rarely and are reserved for bodies that work in the public interest (such as charities or professional institutions) which demonstrate their pre-eminence, stability and permanence in their particular field. Privy Council guidance in relation to professional bodies sets out certain criteria the Privy Council will consider, including that the body represents a field of activity which is unique and not covered by other professional bodies.

APM, a registered charity with over 16,000 members in the UK, had applied for a Royal Charter to further its work of advancing project management. The claimant, PMI, a not-for-profit company incorporated in Pennsylvania with 800,000 members worldwide, objected to the application on various grounds, including that the grant would put PMI at a competitive disadvantage to the detriment of the profession of project management and the public interest generally. PMI also argued that the decision was irrational and contrary to published policy (as APM did not satisfy all of the Privy Council's criteria) and that the Privy Council was biased towards APM because of the government's history of dealings with APM.

An appeal against the High Court's decision dismissing PMI's claim was allowed as this was the first time that the grant or refusal of a Royal Charter had been challenged in the courts.

Judgment

The Court of Appeal held that PMI was entitled to seek judicial review of the decision because, as a competitor claiming that it would be adversely affected by the decision, it had a sufficient interest within section 31(3) of the Senior Courts Act 1981 to challenge the lawfulness of the decision to grant a Royal Charter.

However, the Court of Appeal dismissed the appeal and upheld the decision of the Privy Council to recommend the grant of a Royal Charter to APM. Although the Privy Council's website set out the five main criteria which a body applying for a Charter would normally be expected to meet, the Privy Council was permitted to take the public interest into account as outweighing any failure to meet the main criteria in full.

The Court of Appeal also held that in making its decision, a fair minded and informed observer would not conclude that there was a real possibility that the Privy Council was biased, having considered all the relevant facts, nor was there a basis for any suggestion of predetermination.

What does this mean for charities established by Royal Charter?

It is rare that we have any case law relating to the grant or amendment of a Royal Charter. This case gives a clear indication that the public interest will override any criteria set out in Privy Council policy in relation to the grant or amendment of a Royal Charter.

The Privy Council's guidance on Royal Charters is available here.
The full decision is publicly available here.

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