In a decision which will have implications for local authorities throughout the country, Yipp J has quashed the decision of Liverpool City Council not to indemnify its former mayor, Joe Anderson, for his legal costs incurred in connection with a police corruption investigation.
Mr Anderson strongly denies all the allegations and sought an indemnity for his legal costs in responding to the allegations. He made the claim under a Council policy which committed Liverpool City Council to providing such an indemnity in defined circumstances. That policy mirrored the Local Authorities (Indemnities for Members and Officers) Order 2004, which applied to the Council prior to the Council acquiring a general power of competence under the 2004 Order. Many other local authorities have a similar policy.
In December 2020, the Council refused to grant the indemnity to Mr Anderson, saying that it had no power to do so because none of the acts alleged to have been committed were committed with the authority of the Council or with its approval. The Council’s case was that if Mr Anderson had acted as alleged by the police, he could not reasonably have believed that he was acting within the scope of his powers/ duties or within the powers of the Council. Further, the Council said it had no powers because it said the matters alleged would, if proven, constitute criminal acts and/or intentional wrongdoing.
Yipp J accepted arguments advanced by David Lock QC and Galina Ward for Mr Anderson that the Council had misunderstood its own policy and failed to address the right questions when concluding that it had no power to grant an indemnity. She thus quashed the decision and required the Council to reconsider Mr Anderson’s request for an indemnity.
The judgment contains salutary lessons for all local authorities having to make decisions in this difficult area. The key lesson is that a local authority needs to read and understand its own policy, and that it cannot refuse a legal costs indemnity to a member or officer because of the seriousness of the allegations. In order to act lawfully, local authorities need to follow a decision-making process which addresses the relevant facts and precisely follows the terms of the policy.
Mr Anderson’s application for a legal costs indemnity will now have to be reconsidered by the Council.
The judgment can be accessed here.