Charity Commission's 2022 inquiry into Kids Company criticised but ultimately upheld by the High Court

Kids Company was a high-profile charity which provided support to disadvantaged inner city children and young people. It became insolvent in 2015 amid intense media coverage. This followed a police investigation into safeguarding allegations that was subsequently closed with police finding no evidence of criminality nor any failings of safeguarding dropped due to lack of evidence. 

In August 2015, the Charity Commission launched a statutory inquiry. There were also disqualification proceedings brought against the charity's former trustees in their capacity as company directors. These proceedings were ultimately unsuccessful, as discussed in our previous article here. The Commission released the results of its inquiry in February 2022 and we reported on the inquiry's findings in this article.

Camilla Batmangelidgh, the charity's former CEO, sought to challenge the Commission's findings by judicial review. With permission from the court, these proceedings were continued by Mr Michael-Karim Kerman (the charity's former Clinical Director) after Ms Batmangelidgh's death in 2024.  The consequences for trustees of such critical reports were given added emphasis with the death of Kids Company chair of trustees Alan Yentob just a few days after this most recent court judgment.  Few of his obituaries omitted reference to the personal consequences for Mr Yentob of the media storm surrounding the charity.

Decision

The High Court delivered its judgment on the judicial review claim on 20 May 2025. The challenge was dismissed on all but two grounds. The Court upheld the Charity Commission's finding of mismanagement of the charity's finances (which it states was based on 'ample evidence') but criticised several elements of the inquiry report.

In summary, Mr Justice Sheldon:

• rejected allegations that the Commission had predetermined the outcome of the inquiry. It had kept 'an open mind' and was not finding 'ways of doing down the charity and its trustees just for the sake of it';
• acknowledged that the report did highlight areas in which the trustees were acting within their duties and responsibilities, and that external criticism of the charity was unjustified;
• upheld conclusions regarding elements of management of the charity, including handling client records, claims about the number of beneficiaries supported and dealing with a particular payroll issue (there was "plainly evidence available" to justify criticisms); and
• identified significant errors in two paragraphs:

1.    Failure to acknowledge the High Court’s 2021 finding that the trustees adequately investigated expenditure in relation to the 25 beneficiaries who had received the greatest financial assistance; and

2.    An implication that if the trustees had decided to have higher reserves, they could have saved Kids Company from insolvency. This was also contrary to the High Court's 2021 finding.

These errors were deemed 'irrational', 'unbalanced and one-sided' and 'extremely unfair'. The Commission has agreed to amend these paragraphs accordingly.

Mr Justice Sheldon concluded that 'there was no overall winner or loser in this case'. Nevertheless, lead counsel on the Kids Company side, Alex Goodman KC, stated:

'We are hugely relieved and pleased with this judgment, which provides long-overdue vindication for Kids Company. This robust decision addresses fundamental wrongs and restores fairness and accuracy to the narrative.'

Whilst the Commission has broad discretion as to whether to publish any inquiry report at all and, if it does decide to publish a report, what that should include, the Commission is governed in exercising that discretion by public law principles. There must be a sufficient factual basis to justify the making of any statement and the process to arrive at the making of the statement should not be irrational.  As in this case, the Commission will usually follow a process of Maxwellisation (permitting those criticised in a report to give comments in advance of publication).  This is a vital process to test – sometimes robustly – the basis for statements and findings and a charity and its trustees should always participate if facing criticism.  The Commission is obliged to take into account information made known to them in that process, including where wording may convey unintended meanings when judged by how a reasonable reader would understand it.  The Commission's report was substantially upheld but the forensic examination of its decision-making by the court shows that it bears responsibility to take great care when publishing potentially damaging material and can be held to account in doing so.