MPs say Charity Commission board must own "staggering" decision to sue the Ombudsman

The Charity Commission’s board must take responsibility for its “staggering” decision to take legal action against the Ombudsman, rather than “blame it on advice from the organisation’s lawyers”, a committee of MPs has concluded.

In a report published on Tuesday (HC 111), the Public Administration and Constitutional Affairs Committee (PACAC) said the regulator’s decision to challenge the Parliamentary and Health Service Ombudsman (PHSO) in court “was wrong and must be learned from”.

What happened

The dispute concerned two Ombudsman investigations into how the Commission handled safeguarding complaints at two different charities. The complainants, Lara Hall and Damian Murray, have waived their right to anonymity, the report says. The Ombudsman found maladministration in 2024.

When the Ombudsman said in March 2025 that it intended to lay special reports before Parliament, the Commission responded with a pre-action letter and then judicial review proceedings. The Ombudsman agreed to wait until the case was over. The reports were laid on 9 September 2025, after what the committee calls a five-month delay, following an order of the House of Commons.

In March this year the High Court refused the Commission permission for judicial review. In July the Commons Committee of Privileges concluded that the Commission had “clearly committed a contempt of Parliament”. The Commission accepts the court’s decision.

What the committee found

“We find it staggering that the Charity Commission ever believed its best course of action was to pursue legal action against another publicly funded organisation,” the report says. It lists the consequences as significant cost to the taxpayer and “further distress and inconvenience” to the two complainants.

The committee said the board “was overly reliant on the legal advice it received and did not give sufficient weight to other considerations”. It added: “The decision to seek permission for judicial review was a Board decision, not a decision taken by the Charity Commission’s lawyers, and the Board must, ultimately, take responsibility.”

The report records that the Commission’s chief executive, David Holdsworth, told MPs the Commission had spent £70,000 in total on the legal action.

MPs also rejected the Commission’s suggestion that the Ombudsman had been asking it to carry out a criminal investigation, calling it “astonishing that the Commission thought it was”. The committee said it was “concerned by what we have seen of the culture within the Charity Commission” and called for “a significant cultural shift”.

It described a government consultation on the Commission’s powers as “a positive first step” but said a wider review of the Commission’s powers, and how it uses them, was “long overdue”.

The committee’s chair, Simon Hoare, said: “The handling of these two highly sensitive cases by the Charity Commission Board should be exhibited as a shining example of how a public body should not conduct itself. A litany of poor decision-making has backfired horribly, leading to bad outcomes for everyone.”

The Commission’s response

Dame Julia Unwin, who became chair of the Commission in January, said: “The board fully accepts the committee’s recommendations. We have long accepted errors in how we approached the two cases investigated by the Public Service Ombudsman and have apologised to both complainants.”

She added: “We have also apologised unreservedly to parliament for persisting with legal action in relation to the ombudsman’s reports.” Her comments were reported by Third Sector.

An independent review of the two cases, led by the former Court of Appeal judge Sir Gary Hickinbottom, is under way.

The Ombudsman changed its name to the Public Service Ombudsman on 1 October.