Corporate Governance - EM LawShare · 2019-04-23 · Localism Act section 25 A decision-maker is...

www.emlawshare.co.uk

Corporate Governance

John Sharland- Sharpe PritchardOlwen Dutton- Bevan Brittan


Agenda this morning• Complaints procedures• Political process• Local government ombudsman• Defence to claims• Access to Information• Indemnities and Insurance• Holding the Ring between Executive/Council• MO v Head of Legal Services


Challenges to local authoritydecisions

• Complaints procedures• Political process• Local government ombudsman• Defence to claims


Grounds for judicial review

These are categorised under the following headings:• Illegality• Irrationality/proportionality• Procedural impropriety


Grounds for judicial reviewFor the purposes of challenges to local authorities,these can be classified as follows:• Absence of power• Exercising powers for an improper purpose• Wednesbury unreasonableness• Bias, predetermination• Failure to consult or meet legitimate expectation• Failure to comply with duties such as PSED


The leading cases• Roberts v Hopwood [1925] AC 578• Associated Provincial Picture Houses v

Wednesbury Corporation [1948] 1 KB 223• Pickwell v Camden London Borough Council

[1983] 2 WLR 583• Bromley London Borough Council v Greater

London Council [1983] AC 768


Standing for judicial reviewClaimant must be able to show sufficient standing.Court will consider:• Merits of claim• Effect on claimant• Evidence of alternative remedyProposed test under Criminal Courts and JusticeBill: relief to be refused if highly likely that outcomewould not have been substantially different


Time limits• Proceedings to be commenced promptly and in

any event within three months: Civil ProcedureRules Part 54 Rule 54.5

• Planning cases: six weeks• Procurement cases: 30 days


Pre-action protocol

• Letter before action setting out details of decisionbeing challenged and basis of claim

• Letter of response in 14 days setting out whetherclaim is conceded and if not the basis on which itis resisted


Requirement for permission

• Permission considered on paper• If refused or granted subject to conditions, right to

renew at oral hearing• No right to oral hearing if claim is considered to

be “totally without merit”


Absence of power/irrationality• Hazell v Hammersmith and Fulham London

Borough Council [1992] AC 1• Crédit Suisse v Allerdale Borough Council [1994]

4 All ER 129• Charles Terence Estates v Cornwall Council

[2012] EWCA Civ 1439


Bias and predeterminationThe test for bias is:“whether the fair minded and informed observer,having considered the facts, would conclude thatthere was a real possibility that the tribunal wasbiased”Porter v Magill [2002] 2 AC 357


Process for determining biasThis is a two stage process, requiring the court toascertain all the circumstances and then apply the“fair minded observer” test.Flaherty v National Greyhound Racing Club [2005]EWCA Civ 1117


PredeterminationIf a decision-maker approaches the decision-makingprocess with a closed mind then the decision will bequashed. However, there is a distinction betweenpredetermination and predisposition.R v Teesside Development Corporation ex parteWilliam Morrison Supermarket plc (1988) JPL 23


Cases where decisions havebeen quashed

• Bovis Homes Ltd v New Forest District Council[2002] EWHC 483

• Georgiou v Enfield London Borough Council[2004] LGR 497

• R v Harlow Borough Council ex parte Ghadami[2004] EWHC 1883


Cases where decisions havebeen allowed to stand• R (Island Farm Development) v Bridgend Borough

Council [2007] LGR 60• Condron v National Assembly for Wales [2007]

LGR 87• Persimmon Homes (Teesside) Ltd v Lewis [2008]

EWCA Civ 746• R (Ware) v Neath Port Talbot County Borough

Council [2007] EWCA Civ 1359


Localism Act section 25A decision-maker is not to be taken to have had, orto have appeared to have had, a closed mind whenmaking the decision just because-(a) the decision-maker had previously done

anything that directly or indirectly indicated whatview the decision-maker took, or would or mighttake, in relation to a matter, and

(b) the matter was relevant to the decision


Effect of section 25

It is questionable whether section 25 has made asubstantive change to the law on bias andpredetermination.R (TW Logistics Ltd) v Tendring District Council[2012] EWHC 1209 (Admin)


Decisions may requireconsultation• Consultation must take place when proposals are

at a formative stage• Sufficient reasons must be given to allow for

intelligent consideration and response• Sufficient time must be given for the response• The outcome of the consultation must be

conscientiously taken into accountR v Brent London Borough Council ex parteGunning (1985) 84 LGR 168


Legitimate expectationR v North and East Devon Health Authority ex parteCoughlan [2001] QB 213Three types of legitimate expectation:• Authority needs to have exhausted available

options• Authority needs to provide opportunity to be

consulted• Legitimate expectation provides substantive

benefit


Substantive benefit

If legitimate expectation has given rise to alegitimate expectation of a substantive benefit, thecourt needs to examine whether failure to fulfil apromise would be an abuse of power and whetherthere is sufficient overriding interest in not fulfillingthe promise


Obligation on the decision-maker…”to let those who have potential interest in thesubject matter know in clear terms what theproposal is and why exactly it is under positiveconsideration, telling them enough (which may be agreat deal) to enable them to make an intelligentresponse. The obligation, although it may be quiteonerous, goes no further than this.”R v North and East health Authority ex parteCoughlan [2001] QB 23


Nature of consultation required• No requirement to consult on all alternatives• No requirement to undertake negotiations• Further consultation required only when there is a

fundamental changeR (Stirling) v Haringey London Borough Council[2012] EWCA Civ 116R (Branwood) v Rochdale Metropolitan BoroughCouncil [2013] EWHC 1024 (Admin)


Major decisions

Decisions with far-reaching effects may give rise toa need for consultation under section 3 LocalGovernment Act 1999R (Nash) v Barnet London Borough Council [2013]EWHC 1067 (Admin)


Decisions require compliancewith public sector equality dutyPublic authority must have due regard to the needto:(a) Eliminate discrimination, harassment and other

prohibited conduct(b) Advance equality of opportunity for persons with

protected characteristics(c) Foster good relations between those who have

and do not have protected characteristicsSection 149 Equality Act 2010


Protected characteristics• Age• Disability• Gender reassignment• Pregnancy and maternity• Race• Religion or belief• Sex• Sexual orientation


Main principles 2008• Need for awareness of duty• Must be fulfilled before and at time of decision• Must be exercised with rigour and an open mind• It is non-delegable• It is continuing• It is good practice to keep adequate recordsR (Brown) v Secretary of State for Work andPensions [2008] EWHC 3158 (Admin)


Main principles 2013• Duty to have “due regard” not to achieve results• Regard must be had to countervailing factors• Duty is non-delegable• Requirement is continuing, and must be

conscious and open-minded• Failure to refer to duty does not mean it is not

performed• No formal duty to carry out equality impact

assessment


Useful principles PSED

• Decision-maker entitled to focus on the mainaspects of equality impacts

• Due evaluation will only be treated as unlawful if itis unreasonable or perverse

• Courts will not interfere on the basis that theywould have given greater weight to certain factorsthan the decision-maker

R (Branwood) v Rochdale Metropolitan BoroughCouncil [2013] EWHC 1024 (Admin)


Equality analysis

An equality analysis needs to assess the risk andextent of any adverse impact and how this risk canbe eliminated.Blake v Waltham Forest London Borough Council[2014] EWHC 1027


PSED other principles• Can apply to individual decisions: Kanu v

Southwark London Borough Council [2014]EWHC 2134

• Can be used as a defence: R (Core Issues Trust)v Transport for London [2014] EWCA Civ 34

• Can be used to challenge budget decisions evenif equality considerations need to be taken intoaccount when decisions implemented: R(Rotherham MBC) v Secretary of State forInnovation Business and Skills [2014] EWHC 232


Monitoring Officer Topics

• Background and current thinking• Appointment; discipline; resources• Ensuring Legality and Protecting Probity• The Code of Conduct• Access to Information• Indemnities and Insurance• Holding the Ring between Executive and Council• MO v Head of Legal Services


Statutory Officers

• Head of the Paid Service (Section 4, LG&HA 1989)– Power to report on number of staff and co-

ordination of function• Chief Financial Officer (Section 151, LGA 1972)

– Duty to ensure proper financial administration– Power to report on finance and accounting

• Monitoring Officer (Section 5, LG&HA 1989)– Duty to report on illegality– Principal Officer on Standards


Appointment• The authority shall designate one of their officers (to be known as

the “Monitoring Officer”) as the officer responsible for performing theduties imposed by the section (Section 5(1), LG&HA1989)– MO shall not be the HoPS or CFO or Scrutiny Officer– Can power of appointment be delegated?– Who is an “Officer”?– Requirement to be employed? Pinfold case– Can MOs job-share?– Can two or more authorities share an MO?– Conflicts in shared services– Is a legal qualification required?– Where does MO sit within the Council structure?


Deputies• Legality and Maladministration

– The duties of the Monitoring Officer shall beperformed by him personally or, where he isunable to act owing to absence or illness, by suchmember of his staff as he has for the time beingnominated as his deputy for this purpose (S. 5(7)LG&HA 1989)


Disappointment- currentposition• No disciplinary action in respect of the (HoPS, CFO or)

Monitoring Officer may be taken by the authority other than inaccordance with a recommendation in a report made by aDesignated Independent Person (Schedule 3, LA (StandingOrders) Regulations 2001)– What amounts to “disciplinary action”?– Does de-designation require a DIP?– Does de-designation constitute disciplinary action?– Is a DIP required to discipline an ex-MO?– What is the role of the DIP in disciplinary proceedings?

• Impact of proposed changes ?


Resources• It shall be the duty of every relevant authority to provide (the MO) with such

staff, accommodation and other resources as are, in his opinion, sufficientto allow those duties to be performed. (Section 5(1)(b), LG&HA 1989)

• “Resources” might include -– Access to documents and access to meetings– The right to interview any officer– The right to report, including the right to speak– Requirement on officers and members to assist in MO investigation– The right of access to HoPS and CFO– Delegated power to settle complaints– Consent to disclosure of confidential information to other agencies– Authority to bring in Auditor, Police, etc.– Power and budget to obtain external legal advice– Automatic receipt of all regulatory reports (Ombudsman, CQC, etc.)


Practicalities – Officers• In-house legal and democratic staff as your eyes and ears

– Train them on the MO role and responsibility– Encourage them to consult you

• External lawyers may not be aware of –– The MO role– The Constitution– Contract Standing Orders and Sealing procedures– Include a test question in the procurement evaluation– Include it in the instruction pack/induction day– Instruct them to report to you any possible illegality or breach of

corporate policy


Practicalities – Members• Be available and approachable• Be constructive• Be confidential• Be trusted and always act with integrity• Be impartial• Ensure sufficient training

Ensuring Legality andProtecting Probity


Monitoring Officer Duties• Duty on illegality

- A personal duty to report any proposal, decision or omissionby the authority, any committee or sub-committee, theexecutive or any officer of the authority which is acontravention of any enactment or rule of law ormaladministration

• Duty on the Code of Conduct:– To maintain the Register of Members’ DPIs– To arrange investigation of complaints and conduct of local

hearings• Discretion to advise and to warn members

– Link with Independent Person


Ensuring Legality• It shall be the duty of the Monitoring Officer to prepare a report to

the authority (or to the Executive with a copy to all Councillors)• if at any time it appears to him• that any proposal, decision or omission• of the authority, a Committee or Sub-Committee, an officer or a

joint Committee (by or on behalf of the authority’s executive)• has given rise to or is likely to or would give rise to• a contravention of any enactment or rule of law(Section 5(2) LG&HA 1989)


Section 5 Reports –Practicalities

• So far as practicable, consult with HoPS and CFO• The Authority must consider the report not more than 21 days after it was

first sent to members• The implementation of a matter subject to a report shall be suspended until

the end of the first business day after the day on which consideration of thereport is concluded

• Confidentiality?– Exempt information – legal privilege?– “Information in respect of which a claim to legal privilege could be

maintained in legal proceedings” (Para. 5, Sch 12A, LGA 1972)– Over-riding public interest

• When do you not report?


When do you not report?• Where the authority already has a system for dealing with such

breaches• Where no further action is required to remedy the breach• Where the matter is already reported to the Authority• Where the matter can be resolved more readily by report to an

appropriate part of the Authority• Where the legality is being tested in the courts• Where the breach is trivial


Maladministration• Duty to report only where Ombudsman has investigated and

found maladministration or failure• We recommend –

– MO should report all Ombudsman reports– MO should see all new Ombudsman complaints and

recommend settlement where appropriate– Delegated power in consultation with Chief Officer, CFO and

Cabinet Member• Note – Government previously indicated it intends to give

Ombudsman power to award, not just recommend, remedy andcompensation


Invalidating Decisions• Ultra Vires

– Outside the authority’s powers/Procedurally incorrect• Ulterior purpose/Abuse of discretion

– Improper purpose (Wheeler -v- Leicester City Council(1985)

– Taking into account irrelevant considerations/not takinginto account relevant considerations (Venables&Thompson (1998)

– Trail Riders Fellowship -v- Powys County Council• Failure to comply with statutory requirements

– Equalities: Public Sector Equality Duty: Consultation• Unreasonableness• Acting unfairly - Bias and Predetermination`


Acting unfairly• Apparent Bias

– When your outside connections make it appear that there is areal danger of bias

– R v New Forest ex p Bovis• Predetermination

– Members and officers must take reasoned decisions on all thefacts

– Decisions should not be taken before you have all the facts– Can be evidenced by public statements

• Membership of two authorities• Statements at public meetings

– Can be evidenced by membership of pressure groups


Bias and Predetermination• Local authorities must take reasonable decisions after

consideration of all material factors• So, where a member fails to take material information

into account, the decision is vulnerable to judicial review• Concern that this prevents Councillors expressing views

or representing their communities• Would a fair minded and informed observer, having

considered the facts, decide there is a real possibilitythat the councillor had predetermined the issue or wasbiased ?


Apparent Bias andPredetermination

• R (Lewis) v Redcar and Cleveland BC and PersimmonHomes

• Elected Councillors bring their experience and knowledge to thedecision-making process

• They cannot be expected to come to the Committee Room with ablank mind

• Councillors are elected to provide and pursue policies• “The line is clear - a local authority councillor is entitled to give

weight to the views of party colleagues but should not abdicateresponsibility by voting blindly in support of party policy or partywhip” Henry L.JR v Local Commissioner for Local Government for North andNorth East England, ex parte Liverpool City Council [2000] LGR571


Predisposition, notPredetermination• R (Island Farm Development Ltd) v Bridgend CBC

“Councillors will inevitably be bound to have views on and maywell have expressed them about issues of public interest locally.It would be quite impossible for decisions to be made by theelected members whom the law requires to make them if theirobservations could disqualify them because it might appear thatthey had formed a view in advance. Whatever their views, theymust approach their decision-making with an open mind in thesense that they must have regard to all material considerationsand must be prepared to change their views if persuaded thatthey should.”


Predisposition, notPredetermination• R (Island Farm Development Ltd) v Bridgend CBC

“Evidence of political affiliation or of the adoption ofpolicies towards a planning purpose will not for thesepurposes by itself amount to an appearance of thereal possibility of predetermination, or what counts asbias for these purposes. Something more is required,something which goes to the appearance of apredetermined, closed mind in the decision-makingitself.”


Predisposition, notPredetermination• “Leading members of a local authority, who have participated in the

development of planning policies and proposals, need not and should not,on that ground and in the interests of the good conduct of business,normally exclude themselves from decision-making meetings. “

• “It is clear from the authorities that the fact that members of a local planningauthority are “predisposed” towards a particular outcome is notobjectionable see e.g. R v Amber Valley District Council [1985] 1 WLR 298.That is because it would not be at all surprising that members of a planningauthority in controversial and long-running cases will have a preliminaryview as to a desirable outcome. That will be all the more so if there is anelement of political controversy about any particular application, sinceplanning authority members elected on a particular ticket would, otherthings being equal, be naturally predisposed to follow the party line. Noneof this is remotely objectionable.”

Persimmon Homes Teeside Ltd-v- Lewis,R ; [2008] EWCA Civ 746


The Localism Act 2011• An elected or co-opted member is not to be taken to

have had, or to have appeared to have had, a closedmind when making a decision just because:- The decision-maker had previously done anything

that directly or indirectly indicated what view thedecision-make took or would or might take, in relationto a matter; and

- The matter was relevant to the decision (Section25(2))

• Attendance at campaign meetings?


Ultra Vires,Ulterior purpose,

Unreasonableness,Apparent Bias,

Predetermination

Breach ofthe Code of

Conduct

Makes theCommittee’s

decisionunlawful

Action againstindividual Councillorsunder Localism Act

2011

The Code of Conduct


Application• “Relevant Authorities” in England

– County, District and Unitary authorities– Parish, Town and Community Councils– Common Council of London– Greater London Authority– National Parks and the Broads Authorities– Fire and Rescue Authorities– Joint Boards (Joint authorities, economic prosperity boards

and combined authorities)• Police Authorities in Wales• Otherwise, Wales remains un-changed


Duty to Promote HighStandards of Conduct• Every “relevant authority” must promote and maintain

high standards of conduct by members and co-optedmembers

• “Members” includes elected Mayors• Co-opted members includes members co-opted to

Committees and Sub-Committees• Police and Crime Panels


Codes of Conduct• Each “relevant authority” must adopt, amend or replace a Code

dealing with conduct that is expected of members when they act inthat capacity

• That Code must be consistent with what were the General Principles• That Code must provide for the registration and disclosure of

pecuniary interests and interests other than pecuniary interests• Adoption, amendment or withdrawal must be by full Council

– Adoption, amendment and withdrawal must be publicised locally– No model Code or provision for statutory guidance on what a

Code might comprise


Complaints of misconduct• Relevant authorities other than Parish Councils must have in place

arrangements under which allegations can be investigated, andarrangements under which decisions on allegations can be made.

• An authority may not deal with breach of Code except under such“arrangements”

• If authority finds failure to comply with Code (whether or notfollowing investigation), it may have regard to that failure in decidingwhether to take any action, and what action to take in relation to themember

• Decisions are not invalidated by a member’s failure to comply withCode


Complaints of Misconduct• An authority may not deal with breach of Code except

under such “arrangements”– No power of suspension from Sub-Committees or

Cabinet, or as Chair, Leader or Mayor– No ability to remove the repeat offender

• Decisions can be delegated to Committees, Sub-Committees or officers

• No provisions as to how Parish Councils may dealwith complaints about their own members


An Independent Person• Relevant authorities, other than Parish Councils, must appoint at least one

Independent Person– “Independence”– Advertisement, application and appointment– Can be paid allowances and expenses

• Functions of the Independent Person– Must be consulted by the authority before it makes a decision whether

to investigate an allegation– May be consulted by the authority in respect of an allegation in any

other circumstances– May be consulted by a member who is subject to an allegation– May be consulted by a Parish member who is subject to an allegation– Cannot vote or chair Standards Committee (Sch. 12 para. 39(2) LGA

1972)– Presumably could not sit on Standards Committee if previously

consulted


Register of Interests• Monitoring Officer must establish and maintain a register of

interests– District and Unitary MOs do so for Parish Councils– Individual authorities can decide what must go in the register

(subject to requirements for Disclosable Pecuniary Interests)• The register must be available for inspection in the Authority’s

area– For Parishes, it must be available in the Principal Authority’s

area and on the Principal Authority’s website– If the Parish Council has a website, it must be available on

the website


Disclosable Pecuniary Interests• Duty to register by notifying MO in writing• Duty to disclose at meetings, and register if not already

registered• Must not participate in discussion at meetings

– Duty to withdraw from Chamber is in Standing Orders• Different from old Prejudicial Interests

– Relate to Member and Spouse/Partner– No requirement to disclose or withdraw for interests affecting

family and close associates (But consider Bias)– No requirement that the DPI might influence M’s perception of

the public interest• Nothing on Gifts and Hospitality


Disclosable Pecuniary Interests

1. Employment, office, trade, profession or vacation –– Any employment, office, trade, profession or vocation carried on for

profit or gain2. Sponsorship –

– Any payment or provision of any other financial benefit (other than fromthe relevant authority) made or provided within the relevant period inrespect of any expenses incurred by M in carrying out duties as amember, or towards the election expenses of M

3. Contracts –– Any contract which is made between the relevant person (or a body in

which the relevant person has a beneficial interest) and the relevantauthority —

(a) under which goods or services are to be provided or works are tobe executed; and

(b) which has not been fully discharged4. Land –

– Any beneficial interest in land which is within the area of the relevantauthority


Disclosable Pecuniary Interests5. Licenses –

– Any licence (alone or jointly with others) to occupy land in the area ofthe relevant authority for a month or longer

6. Corporate tenancies –– Any tenancy where (to M’s knowledge) —a) the landlord is the relevant authority; andb) the tenant is a body in which the relevant person has a beneficial

7. Securities –– Any beneficial interest in securities of a body where —a) that body (to M’s knowledge) has a place of business or land in the area

of the relevant authority; andb) either —

(i) the total nominal value of the securities exceeds £25,000 orone hundredth of the total issued share capital of that body;or

(ii) if the share capital of that body is of more than one class,the total nominal value of the shares of any one class inwhich the relevant person has a beneficial interest exceedsone hundredth of the total issued share capital of that class


Sensitive Interests• Re-enactment of provision enabling member to ask MO to agree

that an interest is “sensitive”– “could lead to the member or a person connected with the

member being subject to violence or harassment”– MO may agree to omit details of the interest from the public

copy of the register– At meetings, the member only need disclose the fact of a DPI,

not the interest itself


Disclosure of Interests on Taking Office

• Duty on member to notify MO of any current “Disclosable PecuniaryInterest” within 28 days of taking office– and update within 28 days of being re-elected or re-appointed– But no continuing duty to keep up to date– MO must put disclosed interests on the register (even if not DPIs)

• “Disclosable Pecuniary Interests” to be defined in Regulations, and apply to–– Member– Spouse or civil partner*– Person member lives with as if spouse*– Person member lives with as if civil partner**if the member is aware of that interest

• Criminal offence to fail to disclose without reasonable excuse, or to providefalse or misleading information or reckless as to accuracy


Disclosure of Interests at Meetings (1)• The member must make verbal disclosure of a DPI at the meeting if he is –

– present at meeting– aware that he has a DPI in any matter to be considered or actually

being considered at the meeting,– Unless the DPI is already on the register or notified to MO to go on the

register (“pending notification”)• If the member is aware of a DPI in any matter, he may not participate in any

discussion or vote on the matter –– unless he has a dispensation– Standing Orders may provide for exclusion of the member during

discussion and/or vote on the matter• If DPI not on register, member must notify MO within 28 days of disclosure• “Meeting” covers Council, Committee, Sub-Committee, Cabinet and Cabinet

Committee, and Joint Committees and Joint Sub-Committees


Disclosure of Interests at Meetings (2)

• “must disclose the interest to the meeting”– Existence and nature?

• No requirement for verbal disclosure if the DPI is already on theregister or subject to a “pending notification”

• The duty to disclose applies if the member attends any part of themeeting– Diplomatic withdrawal for the item does not excuse non-

disclosure– But lack of awareness of a DPI is a complete defence

• The duty to disclose does not apply at informal meetings orbriefings or in correspondence


Disclosure by Single Member• Applies to Cabinet Member and Ward Councillor acting alone• If the member is aware that he has a DPI in any matter to be

dealt with or being dealt with by him –– He must disclose to MO within 28 days of first becoming

aware that he has a DPI and will be dealing with the matter– He must not take any step in relation to the matter (other than

to refer the matter elsewhere)• Criminal offence to fail to disclose or to notify, to discuss, vote or

take step on such matter without reasonable excuse, or providefalse or misleading information or reckless as to accuracy


Dispensations• The authority may grant a dispensation on a written application by the

member on the following grounds:– So many members have DPIs that it would impede the transaction of

the business– Without the dispensation the strengths of political groups on the body

would be so upset as to alter the likely outcome of any vote on thematter

– Without the dispensation, every member of Cabinet would have a DPIprohibition from participating;

– The grant of the dispensation would be in the interests of the inhabitantsof the authority’s area, or

– It is otherwise appropriate to grant the dispensation• Members applying for a dispensation may participate and vote on grant of

dispensation• Power to grant dispensations can be delegated

– e.g. to MO with appeal to Standards Committee• Parish Councils to deal with their own dispensations


Criminal Offences• On conviction, a court may fine to Scale 5 and/or

disqualify from this or any authority for up to 5 years• Prosecution only by DPP• In practice, MO only likely to make complaint to Police

if the member refuses to register, rectify or comply


Practicalities Checklist (1)• Local Codes –• Appoint Independent Person(s)• Council to set up non-statutory Standards Committee

– Co-opt Independent Person(s) onto Standards Committee as non-votingmembers ?

– Delegate all powers of Council to –• recommend to Council on Codes and Registers• determine –

• whether a breach of Code has occurred• whether to take any action• what action to take

• determine appeals from MO decisions on dispensations


Practicalities Checklist (2)• Delegate to MO –

– Decision whether to investigate complaint (after consulting IP) andpower to arrange investigation

– Power to refer matter to Standards Committee for hearing ifinvestigation shows evidence of failure to comply with Code (perhapsunless IP satisfied with proposed informal resolution)

– Power to determine requests for dispensations, subject to appeal toStandards Committee

• Appoint MO as Proper Officer –– to receive allegations of member misconduct– to receive requests for dispensations

• Re-read –– R v Broadland DC ex parte Lashley– Moores v Bude Stratton Town Council

• Remind members of personal, civil and criminal liability


Problem Areas• Different authorities, different Codes• Conflicts in the roles of the Independent Person, and

non-voting status• Getting members to update register, after meetings

and generally• Inadequacy of available sanctions• Scale of MO’s personal responsibilities• Dysfunctional Parish Councils


What Else Remains?• Authorities may adopt non-statutory local protocols/guidance

– Member-officer relations– Use of IT– Planning and Lobbying (per ACSeS)– Gifts and hospitality

• Non-statutory action –– Reprimand– Withdraw facilities (Broadland DC v Lashley)– Remove from Cabinet or Committees (with consent of Group

Leader)– Council may remove Leader


Other sanctions• Criminal law –

– Bribery– Misconduct in public office– Failure to register or declare interests– Theft and false accounting

• Civil Liability –– Statutory Immunity, Section 265, PHA 1875– Misfeasance in public office– Moores v Bude Stratton TC– Defamation

• DIY – Broadland DC v Lashley– Injunctions – e.g. harassment

• Ombudsman


End PieceLocal Government Minister Bob Neill said:• "The Standards Board regime led to an explosion

in petty, partisan and malicious complaints thatdragged down the reputation of local government,as well as suppressing freedom of speech. Ourreforms take a tough stance on council corruptionby making serious misconduct a criminal offence,accompanied by the sunlight of transparency onfinancial and union interests. Such reforms willgive local people the confidence that councillorsare putting local residents' interests first."


Access to Information-Principles• Proper recording of decisions• Rights of Councillors to information• Rights of the public to information• General principle – a meeting of a ‘decision making body’ –

must be held in public• Confidential Information• Exempt Information• The Public Interest Test• Contractual confidentiality• “Openness of Local Govt. Bodies Regulations 2014” (draft)


“Confidential Information”• Information the disclosure of which is prohibited by

law or by a Court- Defence- Child care

• Quite unusual• The Committee must exclude press and public when

considering confidential information• Public Interest test does not apply


Exempt Information (1)• Far more common to see items on local authority

agendas which contain exempt information:• Information relating to any individual.• Information which is likely to reveal the identity of an

individual.• Information relating to the financial or business affairs of

any particular person (including the authority holding thatinformation).

• Information relating to labour relations• Information protected by legal professional privilege


Exempt Information (2)• Information which reveals that the authority proposes—

a) to give statutory notice; orb) to make a statutory order or direction.

• Information relating to any action taken or to be taken inconnection with the prevention, investigation orprosecution of crime.

The Committee may exclude press and public whenconsidering exempt information, if the public interest inconfidentiality over-rides the public interest in disclosure


Access to Information- NonExecutive meetings• Cannot transact business unless it is included in the

agenda sent to members of the body at least 5 cleardays before the meeting

• Agenda and any reports must be available to press andpublic 5 clear days before meeting

• Who decides what goes on the agenda ?• No statutory requirement for written report• Chairman can certify Urgency.


Executive Meetings-2012 Regulations• Requirement to publish 28 days clear notice of any

intended Key Decision;• Provision for short notice- 5 clear days notice to all

members of relevant O and S ( call in)• If no time to give 5 clear days notice- the chairman of

the relevant O and S can give agreement• Applies irrespective of who is taking the Key Decision.


Private meetings• Must publish 28 clear days notice of the intention to hold a meeting

( or part of) in private;• Reinforced by 5 day notice which sets out reasons; any propositions

as to why meeting should be open; and authority's response tothose ( authorise proper officer to deal with these);

• Urgency procedure applies – consent of relevant O and S chairmanrequired;

• Requirements apply to meetings only• Schedule 12A applies (confidential and exempt information)• “Informal” cabinet meetings


Officer Decision making• As soon as reasonably practicable after an officer has made a

decision which is an executive decision, the officer must produce awritten statement which must include:a) a record of the decision including the date it was made;b) a record of the reasons for the decision;c) details of any alternative options considered and rejected by the

officer when making the decision;d) a record of any conflict of interest declared by any executive

member who is consulted by the officer which relates to thedecision; and

e) in respect of any declared conflict of interest, a note ofdispensation granted by the relevant local authority’s head of paidservice.

• An ‘executive decision’ is defined as a ‘decision made or to be madeby a decision maker in connection with the discharge of a functionwhich is the responsibility of the executive of a local authority’


Proposed amendments• Draft Openness regulations• Officers must produce written record of delegated

decisions where made– Under specific express authorisation– Under general authorisation and effect is to

• Grant permission or licence• Affect the rights of an individual• Award a contract or incur expenditure which

materially affects body's financial position• Written record to be produced ASARP


“Conflicts of Interest” inExecutive Functions• Minutes of –

- Executive decisions taken by members; and- Executive decisions taken by officers after

consulting executive members• must record any declared “conflicts of interest” and

“any dispensations granted by the Head of PaidService” (cf DPI dispensations)


Recording of Decisions• Council, Committee and Sub-Committee minutes

- Approved as correct record at next convenient meeting• Cabinet and Cabinet Committee records of decisions

- Correct record when signed by Proper Officer• Decisions of individual Cabinet Members

- How are they recorded?• Officer decisions

- ( see 2012 regs) How are they recorded?- 2014 proposals-Date/record with reasons/alternative options

considered/ any conflicts declared


Public Rights of Access• Sections 100A to K, LGA 1972

- Confidential information- Exempt information – Schedule 12A- Applying the Public Interest test

• Statutory rights of access- Register of Members’ Interests (DPI’s and other)

• FoI• EIR• DPA• Audit (Veolia)


Councillors’ Right to Access (1)• All the rights of the public, plus• Scrutiny members have access to any document in

possession or control of the Executive relating to:- any decision taken by the Cabinet or a Cabinet

Committee- any decision taken by a member of the Executive- any decision by an officer in accordance with

executive arrangements• But no right of access to confidential or exempt

information unless relevant to an action or decision themember is reviewing or scrutinising, or to a currentreview


Councillors Right to Access (2)• Ordinary members have a right of access to documents

in the possession or control of the Executive whichcontains information relating to- Business to be transacted at a public meeting- Business transacted at a private meeting- A decision taken by an individual member- An executive decision taken by an officer

• No right of access where the documents discloseexempt information- unless this falls within Para 3 (except for contract negotiations) or Para 6.

• Need to Know Test


Decision making at meetings• Rules of debate –

- Officer recommendations taken as moved and seconded- Member motions must be moved and seconded- Amendments taken in order proposed- Mover of motion may accept amendment; remains the mover- If amendment carried, mover of amendment becomes mover of

substantive motion• Decisions by a majority of those members present and voting• If tied vote, Chairman has a casting vote• Individual member can require his/her vote to be recorded• 5 members may require a recorded vote of all members• Secret ballot on appointment of officers


Decision-making by individualCabinet Member• No meeting, so no agenda, no meeting, no public access• Leader can attach conditions to delegation –

- Written report except for urgency- 5 clear days notice except for urgency- Time and place for officers to present reports- Rights of audience for members / public- Recording Officer


Records of decisions• Statement of decisions must be produced ASARP• Becomes a correct record when signed by Proper Officer• Proper Officer can consult Mayor / Leader before

signature• Individual Cabinet Member responsible for producing

record of his/her decisions


Background Papers• Every report must contain a list of all background papers

which have informed the author in writing the report• Background papers must be available to press and

public from publication of report- Unless discloses confidential or exempt information- Planning – the File

- Criminal offence to intentionally obstruct a person frominspecting written records and background papers orrefusing a request to provide them


Openness of Local Govt.Bodies Regulations 2014 (draft)• Made under enabling powers in Local Audit and

Accountability Act 2014• Makes provision for members of the public to report

and commentate on public ( not exempt) meetings• Allows “any communication method, including the

internet to publish, post or share the results of the..reporting activities”

• Reporting includes filming, photographing and makingan audio recording

• Issues raised ?

Indemnities and Insurance


Statutory Immunity

• Section 265, Public Health Act 1875

No matter or thing done, and no contract entered into by anylocal authority, and no matter or thing done by any member ofany such authority or by any officer of such authority shall, ifthe matter or thing were done or the contract were enteredinto bona fide for the purpose of executing this Act, subjectthem or any of them personally to any action liability claim ordemand whatsoever


Indemnities and Insurance forthe Monitoring Officer• R v Westminster City Council ex p Legg

– Valid indemnity for officers and members against cost ofrepresentation before District Auditor, if cleared

– Section 111, LGA 1972• R v Bedford Borough Council ex p Comninos

– District Auditor cannot challenge indemnity after beingconsulted

– Valid unconditional indemnity to officers for cost of defamationproceedings

– Indemnity can be part of Terms and Conditions of Employment– Section 112 LGA 1972


Indemnity and Insurance forCouncillors• No Section 112 LGA 1972 contract of employment• Section 101, Local Government Act 2000

– The Secretary of State may make regulations to enable localauthorities to grant indemnities to, and provide insurance for,officers and members

• Scope of the indemnity or insurance is any action or failure to act:“authorised by the authority; orforms part of or arises from any powers conferred on or dutiesplaced upon that member or officer as a consequence of anyfunction being carried on by that member or officer“

Holding the Ring –Supporting ExecutiveGovernment


Drafting and interpreting theConstitution

The Importance of observing your Constitution (Bridgerow ltd-v- Cheshire Westand Chester)

Updating the Constitution• Changes of Fact and Law

– Strong Leader– Mayoral Petitions and Committee Systems– Re-inventing Scrutiny– The standards framework– Changing governance status

• Resolutions of Council or Cabinet; Delegations and terms of reference• Improving processes

– Governance and Audit/Standards Committee• Delegated power for MO to amend to take account of changes of fact and

law and decisions of Council, Committees, Leader and Cabinet


Supporting the Executive• Executive Procedure Rules

– Council can set procedure for Cabinet and Cabinet Committees(Para. 4, Sch. 1, LGA 2000), but not individual Cabinet Memberor Ward Councillor executive decisions

– Insert a requirement for written report except in case ofexceptional urgency

• FAQs –– Executive and non-executive functions– “Departures”– “Urgency”– “Key Decisions”– Confidential and Exempt information


Supporting the Council• Council report and question procedures to hold Leader and

Executive to account• Training members to use the constitutional opportunities –

– Questions– Notices of motion

• Enabling Council to determine its own agenda– Invited speakers– Extraordinary meetings to debate chosen topics– Ensuring time for debate


Supporting Scrutiny• Holding the Executive to account

– Scope for pre-consultation by the Executive– Seeking rights of audience before the Executive

rather than Call-In– Impartiality

• Scrutiny of previous MO advice• Obtaining information from partner authorities• The limits to scrutiny- excluded matters


Tension Points• Executive/non-Executive functions

– Staff establishment/terms and conditions– Staff disciplinary issues

• The limits of scrutiny• Call-in and delay• Departures• Urgency• Key Decisions

Monitoring Officerv.Head of Legal Services


Monitoring Officer• Functions –

– Legality – Section 5 report– Standards – Duty to arrange investigation

• Competence –– No requirement for legal qualification– Can be quite reactive– Only responsible if you do know about it– Performed personally (or by Deputy MO)– Personal duty over-rides interests or instructions of the authority

• Doesn’t attract legal privilege


Head of Legal Services• Functions –

– To take such action as is necessary to protect the interests of theauthority

– To secure that such legal action is taken as necessary to implement thedecisions of the authority

– To manage the Legal Team• Competence –

– Must have an appropriate legal qualification and competence– Must be anticipatory and proactive– Can delegate much performance of the function– Responsible for everything you don’t know about!– Must comply with Professional Conduct Rules– Subject to line management

• Legal privilege


Corporate Governance

John Sharland- Sharpe PritchardOlwen Dutton- Bevan Brittan

Corporate Governance - EM LawShare · 2019-04-23 · Localism Act section 25 A decision-maker is...

Documents

Transcript of Corporate Governance - EM LawShare · 2019-04-23 · Localism Act section 25 A decision-maker is...