The former clinical director of Kids Company seeks to inappropriately “immunise” the defunct charity and its trustees against scrutiny by the Charity Commission, the High Court has heard. 

The regulator was today defending itself against a judicial review claim brought by Michael-Karim Kerman, who argues that the commission’s 2022 inquiry report into the collapsed charity should be amended. 

Alex Goodman KC, representing Kerman, previously told the court the regulator’s report was irrational in its findings and contained “critical evidential gaps and imbalance evaluation of the evidence that rob the conclusions of logic”.

The claimant’s representatives also told the court the inquiry was unlawful because it was made without engaging with material evidence or issues, including the Official Receiver’s failed attempt to bring disqualification proceedings against Camila Batmanghelidjh, the charity’s founder and former chief executive, and seven of its trustees in 2021.

But representing the commission, Jamas Hodivala KC of Matrix Chambers told the court today: “The claimant tendentiously elevates the report to wrongly ‘inferring’ misconduct and/or mismanagement, ‘castigating’ the charity and creating ‘various impressions’, comparing it to the disqualification proceedings brought by the Official Receiver, when it does no such thing.

“The report clearly set out that there was no dishonesty, bad faith or inappropriate personal gain in the operation of the charity.

“Where there was insufficient evidence to support observations, none was made.

“By this claim, Michael-Karim Kerman seeks to inappropriately immunise the collapsed charity and its trustees against publication by the Charity Commission of any observations and wider lessons following its demise.”

Hodivala also rejected the claim that the Charity Commission took an irrational approach to the evidence in preparing the report.

“We submit that it is rather blunt for the claimant to say there has been a failure to conduct a rational process by not examining thousands of pages of evidence in the Official Receiver proceedings when in fact there is a judgment assessing that evidence by Justice Falk,” he told the court.

“The intensity of the inquiry was a matter for the Charity Commission, its approach to the intensity of the inquiry was not irrational or unreasonable.

“The court should conclude that the fact the second [inquiry] team confirmed that it would not take any regulatory action following Justice Falk’s judgment reduced, rather than heightened, the required intensity of its review.”

In written submissions, Goodman said the report could have a “chilling impact” on the charity sector if left unchallenged, deterring volunteers and donors, and leaving people like Kerman stigmatised.

“The Charity Commission was entitled to report on whether there were lessons learned for the charitable sector more broadly from the charity’s collapse and the circumstances that led to it,” Hodivala told the court.

“The scope of the report was far wider than whether the directors, who were also the trustees, were fit to be concerned in the management of a company.”

The two-day judicial review concluded today and Justice Sheldon is expected to hand down his judgment at a later date.