Trustee liability

It is very rare for a charity trustee who acts reasonably and in good faith to be held personally financially liable for their actions.
Trustees who act prudently, lawfully and in accordance with the charity’s governing document can generally seek reimbursement of any personal liabilities out of the charity’s resources. 

However, liability is a concern and it is important for all trustees to be aware of the situation.

Trustees can potentially be held liable for breaches of their duties – for example, if they act outside the governing document or fail to follow a statutory or legal requirement.

Trustees can also potentially be liable to third parties and, in some cases, for the debts of the charity. A trustee’s liability for the charity’s debts depends mainly on the legal structure of the charity – whether it is incorporated or unincorporated.

There are a range of methods available to minimise personal liability. The most effective way of minimising liability is to use an incorporated structure and to insure and follow good governance practice and ensure trustees are following their duties and responsibilities.