UK Lawyers for Israel (UKLFI) has commended the London School of Economics (LSE) for taking legal action against students unlawfully occupying a university building, but also warned that taking their demands seriously is liable to result in breaching various legal requirements and exposing LSE to significant liabilities.
Students violently forced their way into LSE’s Marshall Building on 14 May 2024 and have camped in the building since then. On 8 June 2024 LSE circulated an update on the situation, informing staff and students that LSE was about to commence civil court proceedings to recover possession of the Marshall Building “as a last resort”. However, the circular also states that LSE “remain committed to engaging with the students, and we are taking their demands seriously”. These demands include, in particular, divestment targeting Israel.
UKLFI has now written to Professor Larry Kramer, President and Vice-Chancellor of LSE. UKLFI first commends the legal action which is belatedly being taken to end the unlawful occupation of its premises. However, UKLFI’s letter also warns that the divestment targeting Israel demanded by the students is liable to breach fiduciary duties, the Equality Act and charity law.
UKLFI adds that if such divestment adversely affects pension funds, there may be claims, or even a class action, for breaches of fiduciary and other duties against the University and staff who have participated in these breaches. These claims could include any financial loss suffered as a result of the divestment.
It is generally accepted that trustees and fund managers may only take into account non-financial factors if two tests are both met:
(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.
UKLFI notes that while students occupying the Marshall Building may support the divestment demands, there are likely to be many other beneficiaries, such as pensioners and widows/widowers of pensioners who do not.
The application of the second condition would depend on the investment decision in question. UKLFI observes that Israel’s economy has been very successful and resilient in recent years, and that a number of major, global companies have substantial operations there.
Those occupying the Marshall Building also demand that LSE grant “no admission to the University for any active or reserve IDF members who have participated in genocidal acts or war crimes.”
Subject to some exceptions, Israeli Jews and Druze are required to serve in the Israel Defence Forces (IDF) and to remain reservists thereafter. A large majority of them do so. UKLFI argue that a ban on students who serve in or are reservists for the IDF would constitute unlawful discrimination in breach of the section 91 of the Equality Act 2010.
Furthermore, under section 149 of this Act, the University must have due regard to the need to eliminate discrimination, harassment and victimisation, to advance equality of opportunity, and to foster good relations between persons of different ethnicity, nationality, religion and philosophical belief.
UKLFI’s letter draws attention to extensive research at US universities that has shown a strong association between BDS activity and antisemitic hostility. Notably, it has been found that “[t]he best statistical predictor of anti-Jewish hostility, as measured by actions that directly target Jewish students for harm, is the amount of BDS activity.”
UKLFI points out that the inflammatory allegations by the encampment, including that of “genocide”, promote vicious hatred against Israelis, Jews and Zionists. UKLFI warns that the University’s engagement with its organisers is liable to be seen as an endorsement of their demands, thereby enhancing this hatred and increasing antisemitic hostility at LSE.
UKLFI’s letter adds that LSE is also in danger of breaching charity law if it endorses the political campaign of the organisers of the encampment. As an educational charity, LSE must not participate in political campaigns outside its charitable purpose.
Jonathan Turner, chief executive of UKLFI commented: “We consider that concessions to the demands of racist students is imprudent and will serve to encourage further unwarranted demands and more serious disruption. Indeed, we are receiving reports that this is happening. Appeasement will not work.”