Contact: Jeff Pattison, tel 01962 847321

1 SUMMARY

1.1 This report proposes that the Fire Authority adopts a form of indemnification in certain circumstances to cover both its members and employees and any volunteers undertaking authorised tasks. No such explicit indemnity exists at the present time although it is generally accepted that as a `good employer' one should exist. However, it should be recognised that any incidents involving a formal indemnification are likely to be very rare.

1.2 The report sets out several issues relating to the giving of indemnities and also sets out in the Appendix a detailed form of indemnification, which it is suggested, should be covered by obtaining satisfactory insurance cover.

2 BACKGROUND

2.1 It is common knowledge that both members and employees of fire authorities can incur, personally, both civil and criminal liability as a result of their actions. This can apply both to their actions for and on behalf of the Authority and also as a result of them undertaking work at the request of the Authority on behalf of a wide range of outside bodies.

2.2 The ability of local authorities to give indemnities for their members and employees has been the subject of case law in the past. Doubts have been expressed in particular and limitations applied to those circumstances where a member or employee has been acting at the request of the Authority for an outside body.

2.3 The Government has now introduced the Local Authorities (Indemnities for Members and Officers) Order 2004 which gives a specific power for authorities to grant indemnities and/or to take out insurance to cover the potential liability of members and employees. This covers a wider range of circumstances than previously but it is still subject to certain limitations.

3 THE PROPOSED INDEMNITY

3.1 There are a number of issues, which need to be considered, and a decision taken by the Authority as to whether or not the indemnity should apply in such circumstances or whether it should be limited.

3.1.1 Where a decision is taken which is in retrospect, held to be outside the powers of the Authority or the individual.

The regulations allow the Authority to provide an indemnity where the individual reasonably believed that the decision was within the powers of the Authority or the particular individual. It would appear reasonable for an indemnity to be given in these circumstances because although local authority law is complex and whilst legal advice is always available, circumstances will arise where it would be understandable for an individual not to appreciate precisely where certain limits exist.

3.1.2 Where an individual acts in bad faith fraudulently out of malice or as a deliberate or reckless act of wrong doing.

It would be contrary to the public interest to provide an indemnity to an individual in such circumstances. However, the fact that such an allegation is made is not the same as it being objectively upheld by, say, a court. In these circumstances, it would appear reasonable to offer an indemnity even where such bad faith etc. is alleged providing that it is refuted by the individual concerned. Thus an indemnity could be offered if the individual was ultimately cleared of the allegation. However, if that were not the case, then it would be entirely appropriate for the Authority or the insurance company, as the case may be, to recover their costs from the individual concerned.

3.1.3 Where an individual acts in a manner, which constitutes a criminal offence.

Again, it would not be appropriate to offer an indemnity in these circumstances and indeed would be contrary to the public interest. However, the Authority might consider that it would be entirely appropriate for it to ensure that the allegation against the individual is properly refuted. It would also be appropriate for the Authority to ensure that individuals actions when taken in good faith, were not deterred by the potential legal costs of cases threatened against them. However, any indemnity should be conditional upon the individual being ultimately cleared of the allegation of criminal conduct. If the individual was convicted of the offence then the individual concerned under the indemnity policy should be clearly required to repay the costs incurred by either the Authority or the insurance company.

3.1.4 Where the individual is sued for defamation.

The new regulations specifically include a power on the part of the Authority to grant an indemnity in respect of the legal costs of defending a defamation action (but not in respect of the award of any damages) but does not cover the situation where an individual may wish to bring such a claim.

However, the Authority should bear in mind that costs in defamation actions are notoriously expensive. It is therefore suggested that before any indemnity is actually offered in any particular case, it should be subject to the Clerk's review of the case and the imposition of any conditions, as he or she should see fit.

3 WORK FOR OUTSIDE BODIES

4.1 The new regulations now specifically provide for the Authority to give an indemnity to an individual against liabilities, which they incur as members of an outside body to which they have been appointed or nominated to by the Fire Authority itself. This would appear entirely appropriate to do if, as is the case, the Authority is invited to nominate members to a range of outside bodies such as, for example, crime and disorder and local strategic partnerships. In such cases the Chief Officer should undertake a reasonable risk assessment of their insurances and indemnities prior to undertaking the duties.

4 CODE OF CONDUCT FOR MEMBERS

5.1 The new indemnities regulations now enable a local authority to grant an indemnity to its members in respect of the cost of legal representation regarding any investigation, hearing or other proceedings for an alleged failure to comply with the Code of Conduct for Members. However, the regulations also provide that if any such indemnity is given and accepted, the member must reimburse the Authority or, as the case may be, the insurance company in the event that it is found that the member has failed to comply with the Code of Conduct or the member admits that he or she has failed to comply with the Code of Conduct.

5.2 It would appear reasonable to offer such an indemnity in the case of a member who is investigated by the Standards Board for England and the Ethical Standards Officer then refers the complaint for hearing and determination to the Adjudication Panel for England. This is because the Adjudication Panel for England has the ability to impose a sanction of disqualification from the office of member for a maximum period of five years.

5.3 However it is more questionable whether or not an indemnity for the costs of legal representation would be appropriate where any complaint is referred to the local Standards Committee for either investigation or hearing and determination because the Standards Committee can impose a maximum sanction of only three months suspension. Added to this is the fact that local hearings of the Standards Committee should be as informal as possible and it is debateable whether or not it would be necessary for a member in such circumstances to have separate legal representation.

5 EUROPEAN CONVENTION ON HUMAN RIGHTS UNDER HUMAN RIGHTS ACT 1998

6.1 The proposals within this report are compatible with the provisions of the European Convention on Human Rights and the Human Rights Act 1998 and considered in the light of the Race Relations (Amendment) Act 2000.

6 CONCLUSION

6.1 This report recommends that the Fire Authority formally adopt a form of indemnity for its members and officers in line with the terms outlined in the Appendix.

7 RECOMMENDATIONS

7.1 That the Committee recommend to the Hampshire Fire and Rescue Authority that it grant an indemnity to members and employees of the Authority in the terms set out in the Appendix to this report and instructs the Chief Officer to secure insurance to cover the Authority's liability under this indemnity in so far as he/she is of the opinion that such insurance would be financially prudent.

7.2 That appointment to a position with outside organisations, which comes within these indemnities, should be treated as an appointment as a representative of the Authority for the purposes of the Code of Conduct for Members.

Section 100D - Local Government Act 1972 - Background Papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published Works

2. Documents which disclose exempt or confidential information as defined in the Act.

None.

APPENDIX

TERMS OF INDEMNITY

1 The Authority will, subject to the exceptions set out below, indemnify each of its members and employees (which term shall include any volunteers undertaking authorised tasks) against any loss or damage suffered by the member or employee arising from his/her action or failure to act in his/her capacity as a member or employee of the Authority.

This indemnity will not extend to loss or damage directly or indirectly caused by or arising from:

1.1 any criminal offence, fraud or other deliberate wrongdoing or recklessness on the part of the member or employee;

1.2 any act or failure to act by the member or employee otherwise than in his/her capacity as a member or employee of the Authority; or

1.3 failure by the member to comply with the Authority's Code of Conduct for Members.

2 The Authority will, subject to the exceptions set out below, indemnify each of its members and employees against the reasonable costs which he/she may incur in securing appropriate legal advice and representation in respect of any civil or criminal proceedings or Part 3 proceedings to which he/she is subject.

2.1 "Criminal proceedings" includes any interview or investigation by the police, and any proceedings before a criminal court, in the United Kingdom.

2.2 "Part 3 proceedings" means any investigation or hearing in respect of an alleged failure to comply with the Authority's Code of Conduct for Members under Part 3 of the Local Government Act 2000.

2.3 This indemnity will not extend to Part 3 proceedings where the allegation has been referred to the Monitoring Officer for local investigation and/or determination by the Standards Committee.

2.4 Subject to the agreement of the Clerk in any case and any conditions, this indemnity shall extend to any advice or representation in respect of any claim or threatened claim in defamation against the member or employee.

2.5 Where any member or employee avails him/herself of this indemnity in respect of defending him/herself against any criminal proceedings or Part 3 proceedings, the indemnity is subject to a condition that if, in respect of the matter in relation to which the member or employee has made use of this indemnity -

2.5.1 the member or employee is convicted of a criminal offence in consequence of such proceedings, or

2.5.2 a Case Tribunal or Standards Committee determine that the member has failed to comply with the Code of Conduct for Members

and the conviction or determination is not overturned on appeal, the member or employee as the case may be, shall reimburse the Authority for any sums expended by the Authority pursuant to the indemnity.

2.6 Where the Authority arranges insurance to cover its liability under this indemnity, the requirement to reimburse in Paragraph 2.5 shall apply as if references to the Authority were references to the insurer.

3 For the purposes of these indemnities, a loss or damage shall be deemed to have arisen to the member or employee "in his/her capacity as a member or employee of the authority" where:

3.1 The act or failure to act was outside the powers of the Authority, or outside the powers of the member or employee, but the member or employee reasonably believed that the act or failure to act was within the powers of the Authority or within the powers of the member or employee (as appropriate) at the time that he/she acted or failed to act, as the case may be;

3.2 The act or failure to act occurred not in the discharge of the functions of the member or employee as a member or employee of the Authority but in their capacity as a member or employee or representative of another organisation, where the member or employee is, at the time of the action or failure to act, a member or employee or representative of that organisation either -

3.2.1 in consequence of his/her appointment as such member or employee or representative of that organisation by the Authority; or

3.2.2 in consequence of his/her nomination for appointment as such member or employee or representative of that organisation by the Authority; or

3.2.3 where the Authority has specifically approved such appointment as such a member or employee or representative of that organisation for the purpose of these indemnities.

4 The Authority undertake not to sue (or join in action as co-defendant) a member or employee of the Authority in respect of any negligent act or failure to act by the member or employee in his/her capacity as a member or employee of the Authority, subject to the following exceptions:

4.1 Any criminal offence, fraud or other deliberate wrongdoing or recklessness on the part of the member or employee; or

4.2 Any act or failure to act by the member or employee otherwise than in his/her capacity as a member or employee of the Authority.

5 These indemnities and undertaking will not apply if a member of employee, without the express permission of the Authority or of the appropriate employee of the Authority, admits liability or negotiates or attempts to negotiate a settlement of any claim falling within the scope of the resolution.

6 These indemnities and undertaking are without prejudice to the rights of the Authority to take disciplinary action against an employee in respect of any act or failure to act.

7 These indemnities and undertaking shall apply retrospectively to any act or failure to act which may have occurred before this date and shall continue to apply after the member or employee has ceased to be a member or employee of the Authority as well as during his/her membership of or employment by the Authority.

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