Insolvency Services refuses to disclose full cost of failed Kids Company proceedings

The Insolvency Service has refused to reveal the full costs of legal proceedings and other additional fees associated with the Kids Company trial.

The Official Receiver, acting on behalf of the Insolvency Service, announced at the end of last month that it would not appeal the High Court’s decision to dismiss the disqualification proceedings it brought against former senior leaders of the collapsed charity Kids Company.

A request made by Third Sector under freedom of information legislation asked the IS to provide the total amount charged by Womble Bond Dickinson, Gareth Tilley and Lesley Anderson, who acted on behalf of the OR, for the whole proceedings.

But the IS turned down the request.

In its response, the information rights team at the IS said: “In this case disclosure is likely to prejudice the commercial interests of Womble Bond Dickinson, the barristers you have referred to and the Insolvency Service.

“This is because the information is both commercially sensitive and/or likely to have an effect on any tendering or procurement process involving the Insolvency Service.”

The response contends that the public interest consideration favours withholding the information.

The charges brought against Kids Company’s founder and former chief executive, Camila Batmanghelidjh, and a group of former trustees of the defunct charity were rejected at the High Court in early February.

An earlier Freedom of Information request made by Third Sector showed that the Insolvency Service spent £738,909 in external legal fees, including VAT.

But lawyers involved in the case said the true cost to the taxpayer for the entirety of the case would be far higher because that figure did not include the earlier proceedings, including investigative work undertaken pretrial and the technology used during the trial.

Barrister Rupert Butler, head of legal practice at law firm Leverets, who acted on behalf of Batmanghelidjh, said there was no rule to say that the IS never published its legal costs.

He said: “It is disappointing if the Insolvency Service will not publish its costs because it erodes public confidence in the way that it spends taxpayers’ money.

“If the Insolvency Service wins directors’ disqualification proceedings it is entitled for its costs to be paid by the ‘losing’ director, at which point those costs are published in court and an assessment is made as to their reasonableness.

“Consequently, there is no hard and fast rule of principle that the Insolvency Service never publishes what it spends in legal costs.”

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