Kids Company disqualification proceedings cost at least £8m in legal fees

The Official Receiver's case against the defunct charity Kids Company has resulted in a legal bill of at least £8m, The Guardian has reported.

Disqualification proceedings brought by the OR against the charity’s former chief executive, Camila Batmanghelidjh, and seven former trustees were dismissed by the High Court in February.

The conclusion of the 10-week High Court trial also found that the charity might have survived if what turned out to be unfounded claims of abuse involving service users had not been made.

In a statement made at the time of the verdict, the law firm Bates Wells, which advised five trustees involved in the trial, said the case had been brought on “flimsy grounds, wasting millions of pounds of taxpayers’ money”.

Legal costs for the trial were estimated to be around £400,000. 

Now The Guardian has said it has seen documents that revealed the interim legal costs awarded to the defendants by the judge amount to £6.4m, with the paper reporting that they could increase further.

A Freedom of Information request made by Third Sector in February previously revealed that the Insolvency Service spent £738,909 in external legal fees, including VAT, during the trial.

In April, the Insolvency Service turned down a second Third Sector FOI request into the total amount charged by Womble Bond Dickinson, Gareth Tilley and Lesley Anderson, who acted on behalf of the OR, for the full proceedings.

At the time, 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 IS also argued that the public interest consideration favoured withholding the information.

Rupert Butler, head of legal practice at law firm Leverets, who acted on behalf of Batmanghelidjh, has called for the National Audit Office to investigate the government’s handling of the case.

In March, the Official Receiver said it would not appeal the High Court’s decision to dismiss the disqualification proceedings brought against former senior leaders of Kids Company.

In a statement sent to Third Sector, an IS spokesperson said: “Whenever our evidential and public interest tests are met, we will always endeavour to bring disqualification matters before a court.”

“In this case, the court decided it would not make directors’ disqualification orders. We have considered the contents of the judgment and will not be seeking leave to appeal.”

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