Judicial review decision on Kids Company inquiry report
Earlier in the Summer, the High Court partially upheld a judicial review challenge of a Charity Commission statutory inquiry report into Kids Company (finding two passages to be irrational), whilst dismissing the remainder of the challenge.
The high-profile charity Keeping Kids Company (generally known as "Kids Company") went into liquidation in 2015, following which the Charity Commission initiated a statutory inquiry into the charity. The inquiry was paused while disqualification proceedings were brought against the trustees and CEO; in 2021 the High Court dismissed those proceedings, finding that the trustees were not unfit. Nevertheless, the Charity Commission published an inquiry report in 2022 that criticised decision-making at the charity and found that it operated a high-risk business model.
Representatives of Kids Company brought a judicial review challenge to the Charity Commission's inquiry report, and in May 2025 the High Court gave its judgment.
The Court found that two passages (plus a concluding passage) of the Charity Commission's inquiry report were irrational, and a fourth contained an error. In particular, the Court found "irrational" and "extremely unfair" the Commission's portrayal of the charity's expenditure on its "top 25 clients" and its policy on its level of reserves, and especially so given that the report contradicted or failed to mention findings of the earlier High Court judgment in the trustee disqualification proceedings.
The Court rejected the challenge to other aspects of the report.
Since the judgment, the Charity Commission has published an amended version of the inquiry report.
The following points are likely to be relevant or of interest to charity trustees and senior leaders alike:
- The case explores the Charity Commission's regulatory power to make findings of mismanagement on the part of charity trustees. The judgment suggests that any action or inaction by charity trustees where the charity has not arranged its affairs to ensure important debts are paid on time may amount to mismanagement. The fact that HMRC was understanding did not prevent the Charity Commission from finding repeated late payment was mismanagement.
- It remains the case that the content of a Charity Commission inquiry report is difficult to challenge:
- Judicial review proceedings are complex and can also be costly.
- Although in this very particular case there was no costs order since neither side could be said to have won or lost, generally such proceedings involve the risk of paying other parties' costs (including, potentially, the costs of any successful interested party).
- The bar for a successful judicial review application is high. For the court to intervene, it is not enough simply for a report to contain errors (although the Commission voluntarily corrected an error found by the court), but rather those errors must cross a legal threshold for intervention, in this case, whether or not they were irrational (which in a judicial review sense requires establishing that a decision is so unreasonable that no reasonable person acting in the capacity of the decision maker could have made it).
- In a challenge to the whole of a very substantial report only two narrow aspects were found to be irrational resulting in the Commission changing just three paragraphs and deleting a fourth.
- A claim that the outcome was predetermined would have to be substantiated to a high threshold (and that threshold was not met here by a wide margin).
Follow the links below to see the full judgment and the Charity Commission inquiry report:
For more information or advice, please contact Gabriel Cohen in our Charities team.