Founder of collapsed charity can mount court challenge over regulator’s report

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The founder of collapsed charity Keeping Kids Company has been given the go-ahead to mount a High Court challenge to criticisms in a regulator’s report.

A judge has given Camila Batmanghelidjh “permission” to pursue a judicial review of a Charity Commission report after concluding that she had an “arguable” case.

Mr Justice Bourne had considered Ms Batmanghelidjh’s complaints about findings made by the Charity Commission at a recent High Court hearing in London.

The judge said in a ruling published on Monday that his permission decision did not mean that Ms Batmanghelidjh would not face “high hurdles” before succeeding at a trial.

He has not fixed a date for a trial but indicated that it would be staged in 2023.

Keeping Kids Company, which was also known as Kids Company or Kids Co, was wound up in 2015, the judge heard.

It supported vulnerable children and young people in London and Bristol, and attracted celebrity backers including former prime minister David Cameron, Coldplay, artist Damien Hirst and comedian Michael McIntyre.

The commission had in February published the results of a statutory inquiry into the collapse and made a finding of “mismanagement in the administration of the charity” over the failure to pay creditors, including its own workers, on time.

Keeping Kids Company had operated a “high-risk business model”, the commission said.

Trustees allowed spending to increase without a secure stream of income to cover increased costs or mitigate an unexpected fall in fundraising, the report said.

A barrister representing Ms Batmanghelidjh had argued that the report made “unwarranted, irrational and unreasonable” criticisms of Keeping Kids Company and, by implication, Ms Batmanghelidjh – the charity’s “public face”.

Ian Wise KC also argued the report was “tainted by predetermination” and was “accordingly unlawful”.

He told the judge that Ms Batmanghelidjh was “tainted” by the report.

Mr Wise said she was “unable to work at the moment” and felt that was “in part due to the report”.

Faisel Sadiq, who represented the commission, disputed claims made by Ms Batmanghelidjh and argued she should not be given the go-ahead to mount a challenge.

He said the commission had considered it “necessary and proportionate” to investigate the “public collapse” of Keeping Kids Company and argued that conclusions reached were “fair” and supported by evidence.

Mr Sadiq said there was “no proper basis” for concluding that the findings were “tainted by irrationality”.

Mr Justice Bourne said he had concluded that Ms Batmanghelidjh had an arguable case.

“That does not mean that the claimant will not face high hurdles,” he said.

“Some findings in the report are statements of uncontroversial fact, many of the comments at least could be interpreted as anodyne and the court will not readily interfere with a decision by an expert regulator.

“It is nevertheless arguable that the report, read as a whole, makes or implies (or can be read as making or implying) several adverse findings about the charity’s governance, especially in respect of decisions about the allocation of benefits to clients.

“If the report is so interpreted, the grounds of challenge to it are arguable.”

The charity’s closure came shortly after police launched an investigation, which was later dropped, into unfounded allegations of abuse and exploitation at the charity following the broadcast of a BBC Newsnight report.

Last year, a bid to ban Ms Batmanghelidjh and seven ex-trustees from being company directors was rejected by a High Court judge.

Mrs Justice Falk said the public “need no protection from these trustees”, calling them “highly impressive and dedicated individuals”.

The commission had said it agreed with Mrs Justice Falk that there was no dishonesty, bad faith, or inappropriate personal gain in the charity’s operations.

In a joint statement, former trustees – including the BBC’s ex-creative director Alan Yentob – had said Mrs Justice Falk’s finding “made clear that there was no basis for concluding that there was mismanagement in the conduct of the charity’s affairs”.