The Office of the Scottish Charity Regulator ("OSCR") has announced their decision regarding the adoption policy of the Scottish registered charity St Margaret's Children and Family Care Society (the "Society"). The Society is based in Glasgow and provides voluntary adoption services. A complaint was made against the Society to OSCR by the National Secular Society regarding the Society's adoptive policy being potentially discriminatory. Following a period of investigation OSCR has ruled that the Society's practices are indeed discriminatory and are in breach of the Equality Act 2010.

The equality legislation is breached when an organisation, which provides services to the public, discriminates against a person because they have a "protected characteristic". Relevant to this investigation were the protected characteristics of sexual orientation and religion and belief.  Crucially one of the Society's assessment criteria for potential adoptive parents is that they have been married for at least two years. OSCR has ruled that this policy amounts to direct discrimination against same sex couples as marriage is currently available only to heterosexual couples and thus this practice is unlawful. The Society also appears to have a policy of treating couples less favourably if they are not wishing to adopt within the Roman Catholic faith. This also amounts to direct discrimination, this time against other religious faiths. However OSCR noted that it was not clear how strictly this latter policy was applied by the Society.

In coming to its conclusion OSCR took into account arguments put forward by the Society and considered whether any of the exceptions under the Equality Act 2010 for discrimination by charities or religious bodies were applicable. However OSCR came to the conclusion that they were not and that the Society was in breach of the charity test, as their unlawful practices mean that access to the benefit the Society provides is unduly restricted. Moreover OSCR decided that the Society's assessment criteria cause direct dis-benefit to same sex couples. Essentially this means that the Society does not provide a public benefit which is a requirement of the charity test.

There has been a lot of comment in the media regarding this decision with differing views from various bodies on the merits of the decision. The National Secular Society, who originally made the complaint, are unsurprisingly happy about the decision. However the SNP Education Minister has stated that he is disappointed by the decision and that he does not believe that it is in the best interests of the children which the Society helps. Moreover the Scottish Catholic Church's parliamentary officer has described the decision as symptomatic of the "equality extremism" in today's society.

OSCR did emphasise the fact that the Society does a lot of valuable work and that they hope a solution can be reached which allows the Society to remain on the Scottish register of charities, while ensuring they comply with the equality legislation. OSCR has issued a direction to the Society that they must amend their internal and external guidance and procedures so that unlawful discrimination in assessing potential adoptive parents no longer occurs. The Society has until 22 April 2013 to comply with this direction in order to maintain their charitable status and not be removed from the Scottish Charity Register.

Alternatively, the Society has 21 days (from the date it was informed of the decision) within which it may ask OSCR to review its decision. If, following such a review, OSCR confirms its decision, the Society has the opportunity to appeal to the Scottish Charity Appeals Panel and thereafter (if unsuccessful) to the Court of Session. It is worth noting that south of the border, an English adoption charity which found itself in broadly the same position with the Charity Commission has had both appeals rejected.

Alongside its report on St Margaret's, OSCR has also published some interim guidance for charities on the Equality Act 2010, which is also worth a read. It appears that OSCR is serious about ensuring that charities operate within the limits of the equality legislation and in some cases it may not be enough for charities to assume that the charity exception will apply to them.  Instead charities must ensure any discrimination is clearly intended to achieve a legitimate aim and that the means by which it is achieving this aim are proportionate.  The interim guidance can be read here.