Sentebale has reportedly paused its legal action against Prince Harry over fears that rising legal costs could force the charity to close.
The charity, which supports people in Africa living with HIV and Aids, launched defamation proceedings against the Duke of Sussex, who co-founded the organisation, and his fellow former trustee Mark Dyer earlier this year.
At the time, Sentebale’s trustees and executive director said the High Court proceedings related to an alleged “coordinated adverse media campaign” conducted since 25 March last year.
The statement claimed that false narratives had been circulated to media about the charity and its leadership, attempts were made to undermine its relationships with staff and partners, and that there was a forced diversion of leadership’s time and resources into managing a reputational crisis.
A spokesperson for the Duke of Sussex and Dyer categorically denied the allegations at the time, which they said were offensive and damaging.
“It is extraordinary that charitable funds are now being used to pursue legal action against the very people who built and supported the organisation for nearly two decades, rather than being directed to the communities the charity was created to serve,” the spokesperson said.
But The Telegraph newspaper today reported that Sentebale had “put on hold” its defamation claim amid “fears in some quarters that a loss could see the charity forced to fold to cover legal bills”.
The court case followed a high-profile row between Prince Harry and the charity’s chair, Sophie Chandauka, which entered the public eye when the Duke of Sussex stepped down as Sentebale’s patron in March last year.
In a statement at the time, Prince Harry and his fellow co-founder, Prince Seeiso of Lesotho, said they and several trustees had left Sentebale after the relationship between Chandauka and the board had “broken down beyond repair”.
Chandauka responded at the time that a “victim narrative” had been spread to the press after she had “dared to blow the whistle about issues of poor governance, weak executive management, abuse of power, bullying, harassment, misogyny, misogynoir”.
The rift led to a compliance case by the Charity Commission, which concluded the dispute was fuelled by a lack of policies to investigate internal complaints and resolve disagreements.
The commission issued a regulatory action plan to the charity, which Sentebale said in May it had complied with; although the commission said its assessment of the trustees’ compliance was ongoing.
Sentebale and the Duke of Sussex’s representatives have not responded to Third Sector’s requests for comment.