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1/10. For 5 years I've had lots of questions about the personal liability of college governors in case of financial failure. Government's college insolvency legislation heightened concerns. So I read the recent High Court #Kidscompany judgement with interest. Here's a note
2/10. The 221 page court judgement is an good read both in documenting the oversight of an atypical charity and also in explaining the legal reasoning behind the judge's decision to reject the Official Receiver's petition to disqualify trustees and CEO
https://www.judiciary.uk/wp-content/uploads/2021/02/Official-Receiver-v-Batmanghelidjh-judgment-120221.pdf
https://www.judiciary.uk/wp-content/uploads/2021/02/Official-Receiver-v-Batmanghelidjh-judgment-120221.pdf
3/10. In some ways, the #Kidscompany board meetings are a very different world to that of colleges. Letters to/from the PM, meetings across Whitehall with ministers, calls with senior HMRC staff and million-pound donations from celebrities used to settle monthly payrolls
4/10. But the points of law and the judge's verdict are striking. @Andrewpurkis summarises the main points really well. I think it's important to understand that judges can come to a different verdict on the facts presented to them to what people assume https://andrewpurkis.wordpress.com/
5/10. In this case the Official Receiver presented a 600 page case arguing for disqualification (for a single reason relating to the charity's unsustainable model). Thousands of pages of evidence. The judge, in her conclusions, criticises a lack of balance in the case
6/10. We only know this because the trustees were able and prepared to fight a long - and probably expensive - court case. There have been no court cases in the college world but there may sometimes be a lack of balance in how events and actions are characterised.
7/10. On the central issue of the case, the judge ruled that the #Kidscompany trustees should not be disqualified. The conclusion (right at the end, paras 911-915) is worth a look... (follows)
8/10 "It is vital that the actions of public bodies do not have the effect of dissuading able and experienced individuals from becoming or remaining charity trustees".
The judge ruled that the disqualification bar should be high for trustees who performing their role
The judge ruled that the disqualification bar should be high for trustees who performing their role
9/10. Every charity, college, company and court has its difference and the facts of the case matter but there's been a lot of worry in recent years about the disqualification risk and, just possibly, this is misplaced. That isn't to say that governing bodies shouldn't take care
10/10. Colleges are far too important for governors to serve time and not contribute because there are always other people who might do the job just as well. Boards sometimes need a refresh to meet high standards but this should be something driven internally not by legal advice
