8th Apr 2021 | Articles

Natasha Jackson & Katharine Bailey explore the implications of the Kids Company litigation for charities & their directors in this article titled Third Sector Protector for the New Law Journal.

Kids Company was founded in 1996 by Camila Batmanghelidjh to support the most vulnerable children who fell through the cracks in mainstream services. Despite securing hundreds of millions of pounds in donations from celebrity donors and winning more than £42m in government grants, the ever-increasing demand for Kids Company’s services led to financial difficulties for the charity. It collapsed in 2015 in the wake of unfounded allegations of sexual abuse.

As a charitable company, Kids Company was registered under the Companies Act 2006 (CA 2006) and the trustees of the charity were company directors. After a lengthy investigation, the Official Receiver commenced disqualification proceedings under s 6 of the Company Directors Disqualification Act 1986 (CDDA 1986) against Camila, alleging that she was a de facto director of the charity, and the trustees. A ten-week ‘hybrid’ trial took place before Mrs Justice Falk during the COVID-19 pandemic.

In a decision that has a significant impact for the charitable sector, Falk J roundly dismissed the case, finding that Camila was not a director and that none of the defendants were unfit
to be directors (Re Keeping Kids Co, Official Receiver v Batmanghelidjh and others [2021] EWHC 175 (Ch)). This case is particularly notable for the strongly-worded judicial observations on the requirement for fairness and balance towards defendants, and the stark recommendations issued to the Official Receiver on case presentation…..

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Natasha Jackson

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Katharine Bailey

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Please contact us either by telephone: +44 (0)20 7415 7800 or email: clerks@3harecourt.com




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