The University of Edinburgh has been accused of acting unlawfully and warned that it could be exposed to substantial liabilities as a result of its response to demands made by the organisers of an anti-Israel “encampment”.

UK Lawyers for Israel (UKLFI) have written to Professor Peter Mathieson, Principal and Vice-Chancellor of the University of Edinburgh, pointing out that part of the University’s response to the encampment’s demands is unlawful. It also gives rise to governance and regulatory concerns that should be reported to the Scottish Charity Regulator and the Financial Conduct Authority.

The encampment organisers have demanded  that the University “divest entirely from companies tied to Israel”.  In response the University has set up a “Working Group” to “work in parallel to the Responsible Investment Policy Consultation”.

Significantly, the University has instructed its fund manager to make no new purchase of shares in Amazon or Alphabet (Google’s parent company) for at least three months, while the Responsible Investment Policy Consultation is running.

This decision evidently follows demands by the organisers of the encampment and does not appear to have been taken in accordance with investment advice. It improperly fetters the University’s discretion by binding it in advance to exercise a fiduciary power in a particular way. It also fails to satisfy the conditions for taking non-financial factors into account, namely:

(1) there is good reason to think that beneficiaries and stakeholders would share the concern; and

(2) the decision does not involve a risk of significant financial detriment to the fund.

Both Amazon and Alphabet shares have risen substantially in the year to date and have even risen since the University’s response to the encampment demands. There is plainly a risk of significant financial detriment going forward.

UKLFI’s letter points out that if the exclusion instruction affects pension funds, there could be claims, or even a class action, for compensation for losses resulting from the breaches of fiduciary and other duties against the University and staff who have participated in them. He observes that insurers (including D&O insurers) and auditors ought to be notified of the possibility of claims.

The encampment organisers also demand that the University “sever all research collaborations affiliated with Israel’s genocidal project” and “take measures to ensure that no person who participated in genocide are permitted to join the university”..

UKLFI warns that boycotts targeting Israeli research or academic institutions and banning students who have served in the Israel Defence Forces would discriminate against Israeli, Jewish and/or Zionist staff and students contrary to sections 39 and 91 of the Equality Act 2010.

Academic Friends of Israel have also written to Professor Mathieson regarding this matter.

Jonathan Turner, UKLFI Chief Executive, commented: “University authorities are making a grave mistake if they meet the demands of the organisers of these encampments. It simply encourages them to demand more and to cause more disruption until they get it. If the campers disrupt lawful activities, the University should ask the Police to arrest and charge them for aggravated trespass. If they are not disrupting lawful activities, the University can either bring civil proceedings to evict them or ignore them.”