The Charity Commission’s critical report about dissolved children’s charity Kids Company could “continue to have a chilling impact” on the sector if it remains unchallenged, the High Court was told this week.
Michael-Karim Kerman, Kids Company’s former clinical director, made the comments via his legal team in a written submission to the court this week as a judicial review hearing took place.
The hearing came after several celebrities signed a letter calling for the commission’s 2022 report to be amended.
Kerman had won the right to challenge the regulator’s report following Kids Company founder Camila Batmanghelidjh’s death on 1 January last year.
‘Deterring volunteers and donors’
After the charity’s closure in 2015, the High Court cleared Batmanghelidjh and Kids Company’s trustees of being unfit to run the charity in 2021.
However, the commission’s inquiry report, published a year later, said that the charity should have built up reserves, ensured its board had the right skills, and maintained better records.
The report also said that the charity’s repeated failure to pay HMRC or its own staff on time amounted to formal “mismanagement in the administration of the charity”.
Kerman argued that the report is “legally flawed” in its criticisms of Kids Company, contains several errors and imbalanced evidence, is insufficiently reasoned, and is “outside the range of conclusions reasonably open to the regulator”.
In its written submission to the court, Kerman’s legal team additionally warned that “if left unchallenged, this will continue to have a chilling impact on the charity sector, deterring volunteers and donors and people like Mr. Kerman shall remain stigmatised”.
Kerman’s legal team added that the commission’s statutory inquiry replaced its initial allegations against Kids Company with “a series of criticisms of a significantly lesser order, but sufficient to maintain the stigmatisation of the charity”.
Commission: Kerman seeks to ‘inappropriately immunise’ collapsed charity
In its written submission to the court, the commission criticised Kerman as seeking to “inappropriately immunise the collapsed charity and its trustees against the publication by the [commission] of any observations and wider lessons following its demise”.
It further argued that Kerman was wrongly inferring claims of misconduct or mismanagement and criticism of the charity in the 2022 report, “when it does no such thing”.
“The report clearly set out that there was no dishonestly, bad faith or inappropriate personal gain in the operation of the charity,” it said.
“It made clear in the report no disqualification proceedings would be brought against any of the trustees.”
Rather, the report set out “observations on the operation of the charity and lessons learned for the wider charitable sector”, the commission argued.
The judicial review continues with a decision expected in writing at a later date.
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