Council Crisis: A Dodgy Dossier

Carmarthenshire's councillors have now been provided with a further bundle of legal documentation for their reading pleasure ahead of the 27 February extraordinary meeting. Mrs Linda Rees Jones, who sent the latest package out, notes sympathetically that "some members will find the documentation complex". That is a kind way of referring to the literacy and comprehension skills of some of our elected representatives, including several on the Executive Board.

Fortunately the reports are all written in plain and relatively simple language without recourse to legal mumbo jumbo, and with any luck the public should soon be able to have a look. Included in it is a response from the auditor to a letter written by the council in November 2013, although for some reason the council's letter is not among the documents released.

The star exhibit is the report Mrs Rees Jones produced for the Executive Board when it approved the libel indemnity in January 2012.

A great deal of the legal argument both here, and in the advice produced by Mr Timothy Kerr QC almost two years later, hangs on a single sentence in the so-called Explanatory Notes to the Welsh Government's 2006 Order dealing with indemnities for members and officers in local government.

The Order makes it very clear that indemnities may not be granted to help officers and members bring actions for defamation, although they may be indemnified to defend actions brought against them.

However, the accompanying Explanatory Notes contain the following line:

"These powers are in addition to any existing powers that such relevant authorities may have".

Is a prohibition on indemnifying an action for defamation an additional power?  Most people would probably think that being told you may not do something does not really qualify as a new power.

Mrs Rees Jones in her report brushes all caution to the wind. What this really means, she says is:

Welsh Government Guidance issued in conjunction with the 2006 Order states that any powers to grant an indemnity under the 1972 Act (ie. the s. 111 power) are not removed by the 2006 Order.

It does no such thing, and to say so is utterly misleading. The report was, in words used in a different context, "sexed up".

The other little problem with all of this is the legal status of Explanatory Notes. 22 months after Mrs Rees Jones put pen to paper, the council's QC, Mr Timothy Kerr, noted that the House of Lords had taken a pretty dim view of the legal value of explanatory notes. But that was for Acts of Parliament, Mr Kerr says, and explanatory notes to Orders are much more important.

It is certainly an argument, but it does not seem to have been tested in a court of law before. Even if the argument were to be tested, it is hard to see how an Order banning the use of indemnities to bring libel actions could be seen as conferring a new power on councils.

What we are left with is a rather shaky interpretation of a single line in some explanatory notes to an Order which may or may not have legal validity. As the auditor pointed out in his response, it would be very strange for the Welsh Government to produce a piece of legislation accompanied by a set of Explanatory Notes which rendered the Order defunct.

In her report Mrs Rees Jones tells councillors that she is liaising with the WAO, although the report does not reveal that a few days before the report was presented, the WAO made it clear that they thought the council was on thin ice. 

In case there are any lingering doubts, the Board is told that "Specialist Libel Counsel" thought Mr James had a good chance of success. What is not spelled out is that Specialist Libel Counsel was Mr James's own barrister, and that the "seriously defamatory" statements were not much more than a reference to Pinocchio and the use of the words "slush fund" to describe the council's unique libel indemnity arrangements.

Perhaps most worryingly of all, you would have thought, Mrs Rees Jones tells the Board that the council does not know whether Jacqui Thompson had the financial means to meet any costs and damages.

There is also nothing in the report which says that the indemnity should live on indefinitely and be used to fight any future appeals. Neither does it set any limits on how much may be spent, although Mrs Rees Jones notes helpfully that costs could be in the region of £100,000. 

So there we have it:

- A report which claims unequivocally and wrongly that the explanatory notes to the 2006 Order do not remove existing powers to grant indemnities;

 - A report which does not say what the WAO's opinion was, even though the WAO's opinion had been received before the report went to the Board;

- A report which cites expert opinion without disclosing that the source of the opinion was the barrister acting for Mr James;

 - And finally a report which gave the green light to a potentially very costly court action without establishing whether Jacqui Thompson had the means to pay.

Not included in any of the documentation released so far, and unlikely to be released, is information relating to the negotiations to secure an out of court settlement which went on until shortly before the trial started. It is understood that this would show that Mr James was determined to go to court come what may.

If this reminds you of Tony Blair's dodgy dossier which was used to justify the war on Iraq in 2003, you may well be right.