Legal News - #daftarrest: why the Council is on thin ice

Carmarthenshire County Council has now confirmed to both the South Wales Evening Post and the Western Mail that it is indemnifying the chief executive to both defend the action brought by Jacqui Thompson and to bring an action for defamation against her. The Western Mail report can be found here.

As the Western Mail points out, the council changed its constitution in 2008 to allow council funds to be used in defamation cases. The council's former senior legal officer, Lyn Thomas, said at the time that the change was based on the Local Authorities (Indemnities for Members and Officers) (Wales) Order 2006, which can be found here. The section headed "Restrictions on Indemnities" is clear that an officer or member can be indemnified to defend an action brought against them, but they may not be indemnified under the Order in order to bring a claim of defamation.

In plain terms, then, the Order stipulates that a council may pay legal costs to defend an officer or member, but may not fund an action for defamation brought by an officer or member. However, that is precisely what Carmarthenshire County Council is doing.

Here is the relevant section of the council's constitution:


Defamation
Jointly with the Director of Resources, to authorise the institution of legal proceedings
arising out of alleged defamatory statements made against the Head of Paid Service,
provided that such action is supported by Counsel's advice.

The Council appears to base its case for giving itself these powers on a court ruling from 2003 (R Comninos v. Bedford Borough Council), in which the council's auditor sought judicial review of a decision by the council to fund libel proceedings brought by three of the council's officers in conjunction with a press release and a newspaper article which had criticised the way in which an election had been conducted. Bedford council based its case on a clause in the 1972 Local Government Act, arguing that the decision to fund the libel case was "calculated to facilitate, or is conducive or incidental to, the discharge of any functions".

Counsel for the auditor relied heavily on a ruling by the Lords in another case, Derbyshire Borough Council v Times newspapers Ltd (1993). There the judge ruled that:


"I regard it as right for this House to lay down that not only is there no public interest favouring the right of organs of government, whether central or local, to sue for libel, but that it is contrary to the public interest that they should have it. It is contrary to the public interest because to admit such actions would place an undesirable fetter on freedom of speech."

Counsel for the auditor in the Bedford case argued that this established an important rule of public policy which could easily be circumvented by a public body, simply by claiming that their officers had been libelled, and taking action through their officers, rather than as an organ of government.


However, in the specific circumstances of the Bedford case, the judge ruled that the council had the right to fund libel proceedings, and important considerations in this case were that the three council officers would have faced personal financial ruin if the council's decision had been overturned, and the district auditor had taken an extremely long time to bring the matter to court. However, the judge did have this to say:

This case seems to be very much a "one-off", and it was not suggested otherwise in the adjournment debate in the House of Commons. The hazards of defamation actions are, or should be, notorious. Common sense suggests that the council's disastrous experience in the present case should be sufficient to warn-off all but the most litigious of local authorities from granting indemnities in respect of the costs of defamation proceedings brought by their officers. 

That tells us something about Carmarthenshire County Council, doesn't it?

Where this leaves Carmarthenshire is unclear; certainly it is the case that Parliament did not intend to give councils such powers under the most recent legislation, and the interpretation given to Section 111 of the Local Government Act was, to put it mildly, debatable. The decision to fund the chief executive's action against Jacqui Thompson would, in the final analysis, appear to rest on the following wording from the 1972 Act:

"a local authority shall have power to do any thing (whether or not involving the expenditure borrowing or lending of money or the acquisition or disposal of any property or rights) which is calculated to facilitate or is conducive or incidental to the discharge of any of their functions." 

In layman's terms, therefore, what the Council appears to be saying is that it is funding the action by Mr James because, somehow or other, Jacqui Thompson's blog is, in ways which are unclear, impeding the chief executive from carrying out his job.

In pursuing this course of action, therefore, Carmarthenshire County Council is blazing something of a lonely legal trail, and the justification for funding the action against Jacqui is, to use a local legal term, utter bollocks.

No doubt employees of the Council and residents of the county will be cheered to hear that despite all of the job cuts and reductions in service being planned by the council, there is still enough money left in the kitty to pay the chief executive's legal bills.

As for the Council's reputation, the powers that be in County Hall may well regret their decision if and when the facts emerge.Nobody likes a bully, and bullies who waste huge sums of money, trample over free speech and end up as a laughing stock will be heaped with the ordure they so richly deserve.