Presbyterian Church seeks legal ruling on PMS bail-out

Image caption, Thousands of PMS members have been unable to retrieve their savings

The Presbyterian Church is seeking a High Court ruling to allow it to donate to the Presbyterian Mutual Society (PMS) bail-out.

The church has agreed to contribute at least 拢1m to a fund established by the Government to rescue PMS savers.

Nearly 10,000 Presbyterians lost access to their savings when the PMS was forced into administration in 2008.

To protect against a legal challenge, the church needs the court to state the donation is a lawful use of its funds.

As the church is a charity, its funds can only be used for charitable purposes.

There is potential doubt about whether the bail-out donation meets that legal definition.

However, there is a provision of the Charities Act which allows a court to make an order in connection with the administration of any charity.

The Presbyterian moderator alluded to the legal complication last year saying: "There is a technical and a legal question that a church can only raise money for charitable purposes and then we have to understand is this legally a charitable purpose?

The case is listed for hearing at the High Court in Belfast on Wednesday.

The PMS was forced into administration after a run on withdrawals when members realised it was not covered by a new government deposit guarantee.

Since then, larger savers have received 12% of their money back. But those with less than 拢20,000 saved got nothing.