The Local Authorities (Indemnities for Members and Officers) Order 2004

SE Alarm – London

25th January 2006

Fergus Dolan – Public Sector Risk Consultant

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Overview

Introduction

Legal Background

The Order (English-enacted)

Insurance Implications

Risk Management

Conclusion

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INTRODUCTION

Topical

The Local Authorities (Indemnities for Members and Officers) Order 2004

Current Action

Health Warning - See your Solicitor !

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LEGAL BACKGROUND

In what roles do personal liabilities arise for Members & Officers?

Relevant Legislation- For Members- For Officers

Government Consultation

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THE ORDER

English Order - General Comment

Who can indemnify?

Who maybe indemnified?

What maybe indemnified? (Article 5)

What restrictions apply? (Article 6)

What about matters that exceed the powers of the Authority, Member or Officer?

What are the terms applicable to the indemnity or insurance?

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INSURANCE IMPLICATIONS

Introduction

What business is covered under your policy?

What is the operative cover under your policy?

How does your policy provide an indemnity to other persons?

How have insurers responded?

Does your insurance provide cover for those specific actions falling outside of the new order?

What cover applies if the Council itself acts ultra vires?

What is the position of an individual Member or Officer who acts ultra vires (but the Council itself is not acting ultra vires)?

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INSURANCE IMPLICATIONS (Continued)

Is “contract liability” covered under the Officials Indemnity policy?

What if a Member is without advice of an Officer?

What additional insurances maybe purchased?- The main product to be considered is legal expenses

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RISK MANAGEMENT

This is a separate topic in its own right

It is essential to risk assess- All partnership arrangements- Effect of your indemnity policy and particularly contingent cost of those liabilities not otherwise insured- All your activities - ensure they are disclosed to Underwriters- Ensure Members & Officers clearly understand there is no

provision for “personal activities”

Consider creating a register to record and control all outside “appointments”

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CONCLUSION

The new Order brings clarity to this topic

In general your insurance policies will not change much

What is likely to change is your own policy - consider the implications

Legal expenses insurance - a distinct possibility

Risk assess