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Index

Page

Pre-Action Protocol for debt claims progresses? Nichola Evans

2 – 5

The latest Euro-Dynamics case

Lynne Rathbone and Vicky Bills 6 – 8

Sentencing in health and safety and food safety cases

Dale Collins 9 – 10

Buying local and the tale of the Spanish hospitals

Angelica Hymers 11 – 13

Members and officers – the key to a successful relationship?

Ben Standing 14 - 17

The articles in this newsletter are for general information only. They do not represent legal advice. You should always take legal advice before pursuing any course of action discussed in this newsletter. If you would like to discuss any of this issues raised in this newsletter please call us +44 (0)115 976 6000.

2

Pre-action correspondence on debt matters has historically tended to follow a formula. Organisations send

out a relatively short form letter setting out the monies due and annexing a statement or invoice setting out

the debt. Currently in the Civil Procedure Rules, the general Practice Direction encourages parties to

exchange correspondence before issuing proceedings but there has been no specific practice direction for

debt actions. There is a current consultation in place that remains open for a number of weeks which

suggests that a specific pre-action protocol ought to be introduced for debt claims and in this article we

explore what the suggestions are and how organisations can get involved in the consultation.

Background

In September 2014, the Civil Procedure Rule Committee (CPRC) consulted on a draft pre-action protocol for

debt claims (Debt Protocol). This protocol applies to businesses, sole traders and public bodies claiming

payment of debt from an individual.

The main principle behind the draft consultation was that debtors or alleged debtors should be provided with

sufficient information to enable them to obtain advice prior to proceedings being issued against them. It is

thought that a debtor would then be able to engage in correspondence with the creditor and the issue can be

resolved without the need for court involvement, reducing costs for the parties as well as reducing the

burden on the court system.

The draft protocol stated that the organisation should send to the alleged debtor:

a letter of claim beginning with a notice prescribed in the protocol with copies of the protocol

a full statement of account detailing all payments made by the debtor

details of the original debt and creditor and assignments of the debt together with details of the

relevant notices of assignment

details of how the money can be paid and contact details for the organisation

the contract or agreement between the parties or details of the agreement if it was made orally

the defendants reply form together with a self-addressed envelope

the organisation must also highlight the importance of obtaining independent legal advice and where

it can be obtained from.

All relevant details regarding the circumstances of the debt were to be included in the letter such as whether

the defendant has offered to re-pay in instalments. It was then proposed that the defendant had 28 days to

return the form and the proposed claimant must inform the proposed defendant that they can seek

independent legal advice from free organisations.

3

The drafting of the proposal and the actual consultation were both met with controversy, primarily due to

the lack of consideration as to the extra burden it would add to creditors by the extent of information they

would have to provide in the Letter of Claim and the fact that this extra cost would not necessarily be

recoverable in any subsequent proceedings. Many questioned if the protocol was actually necessary and if the

general Practice Direction needed amending.

The result of the consultation was that the view was taken that the draft Debt Protocol did need amending

but that a new pre-action protocol would be a welcome addition to the Pre-Action Protocols. Many responses

to the consultation stated that the Draft Protocol was seen to favour the debtors over creditors and a fairer

balance needed to be struck between providing sufficient information to the debtor to respond to the claim

and the time and cost of providing this by the creditors.

Many creditors demanded an immediate redrafting of the consultation to reduce the amount of information

they would have to provide. Many organisations raised their concerns about the volume of documentation

that would be required and the complexity or the process involved without any assurances that there would

be improvements to the system of debt recovery.

The current position

In response to this, The Civil Justice Committee (CJC) has re-drafted the Protocol which can be found here.

The Committee have suggested a two-stage approach, whereby the most important information should be

contained in a Letter of Claim with other information and documents being available on request. The aims of

the Debt Protocol remain the same but the information that has to be provided to debtors has been reduced

and clarified.

It is recommended that creditors should no longer be required to send a copy of the Debt Protocol or re-

produce a long notice informing them of the procedure. However, debtors should be given a “reasonable

time” to respond to the Letter of Claim and proceedings should not be issued within 30 days of sending the

Letter of Claim. There is now a two stage process which means that firstly, the Letter of Claim is sent to the

debtor and then if further information is required, the debtor can request this and disclosure of relevant

documents is encouraged at this stage. This slight change from the first draft of the Protocol was so to lessen

the burden of creditors having to provide vast amounts of information and documentation straight away.

Debtors will also be provided with an Information Sheet, designed to set out in plain English their rights and

obligations under the Debt Pre-Action Protocol and what information can be requested. This is intended to

address concerns raised during the consultation such as:

(i) providing debtors with a copy of the full Debt Pre-Action Protocol would be overly burdensome and

too costly for creditors and

(ii) the Debt Pre-Action Protocol was not easy for debtors to understand

4

The Committee opened a second consultation on 2 November 2015 for eight weeks. The Committee has

narrowed down the issues such as simplifying the complex wording and reducing the additional cost to

creditors for providing this protocol by requesting that interested organisations answer four specific

questions:

1. Does the two-stage approach to information provision strike the right balance between fairness and

proportionality? Should any other information be provided for debtors as of right, in/ with the Letter

of Claim?

2. Are any of the provisions of the Debt Protocol irreconcilably inconsistent with creditors’ obligations

under other regulatory regimes? If so, please indicate precisely which regulatory obligation and

or/statutory provision is referred to and explain the nature of the inconsistency.

3. Is the Information Sheet sufficiently clear and comprehensible to debtors, while still providing an

accurate description of their rights and obligations? Should any additional information be included?

4. Is the Reply Form sufficiently clear? Do the reply boxes follow a logical order? Is the information

included in the indicative list in Box J comprehensive? If the answer to any of these questions is ‘no’

please indicate how the boxes might be amended to improve the Reply Form, included suggested

drafting where appropriate.

The questions address the form of the Letter of Claim to debtors and whether interested organisations are

now satisfied with the amount and content of information sent to debtors and whether the balance is now

correct in relation to the burden on creditors in providing the information.

The thinking behind is question 2 is to ensure that creditors obligations under this regime are not completely

inconsistent to other schemes or procedures and will be aimed at the concerns made by interested

organisations during the first consultation.

The Information Sheet and Reply Form are much clearer for debtors to understand and explain the procedure

for those not familiar with the Civil Procedure Rules and general pre-action conduct.

Conclusion

We would encourage organisations to make themselves aware of the recommendations and respond to the

consultation, as the views from the first consultation have clearly influenced the Committee. We will also be

preparing a response which we will publish shortly after the deadline date.

The closing date for responses to the consultation is 11 January 2015. Responses should be sent to

paps_consultations@justice.gsi.gov.uk (with PAP Debt claims Consultation in the subject line) or by post to

Jane Wright at the following address: Ministry of Justice, Post Point 4.37, 102 Petty France, London, SW1H

9AJ.

5

Should any updates arise, we will of course update our website.

Nichola Evans | +44 (0)161 300 8021 | nichola.evans@brownejacobson.com

6

Basically, if European Dynamics makes a bid, just award them the contract! Maybe not, but one might forgive

certain civil servants in various European institutions if they thought that way at the moment.

On 7 October 2015 another European Dynamics (ED) case1 was decided by the General Court. The contract

award decision was annulled after ED made no less than 11 complaints against the Office for Harmonisation in

the Internal Market (OHIM) after they were ranked third in the cascade mechanism for the framework

contracts.

The background

In August 2010, OHIM announced that it was looking to procure IT consultancy and management services and

published the advert. There would be a maximum of three service providers for a maximum duration of four

years. The ‘cascade mechanism’ was used, whereby if the first-ranked tenderer was not able to provide the

services in question, the second-ranked tenderer would be asked, and then the third etc.

ED submitted a tender and was told that, in terms of value for money, they had been ranked third. ED

submitted a request for further information to determine why they had only been ranked third on the

framework agreement. The response showed that ED’s bid had been ranked second in relation to both the

five award criterion points system and the financial bid and the weighting was of those bids for the award of

the contract was 50/50. Therefore ED should have been ranked second overall.

The claim

ED challenged the award decision under Article 89(1) of the Financial Regulation that states that all public

contracts financed in whole or in part by the EU budget must comply with the principles of transparency,

proportionality, equal treatment and non-discrimination. They made no less than eleven complaints and

three pleas in law. They claimed that OHIM did not use the award criteria that they had specified in the

tender specifications, that there were errors in their assessments and that they had breached their duty to

state reasons for their decisions within the meaning of the second paragraph of Article 296 Treat on the

Functioning of the European Union (TFEU), by refusing to provide an adequate explanation or justification for

the award decision. They also sought compensation of €650,000, alleging that the decision, and the lack of

reasons for the decision, had caused harm to their reputation and credibility. Finally, they also asked the

General Court to order OHIM to pay their costs in the action.

1 Case T 299/11, European Dynamics Luxembourg SA, Evropaïki Dynamiki — Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE and European Dynamics Belgium SA v Office for Harmonisation in the Internal Market (Trade Marks and Designs)

7

OHIM responded by claiming that the General Court should dismiss the action on the basis that it was

unfounded and that it should order ED to pay OHIM’s costs in defending the action.

The decision

The General Court upheld the appeal, stating that the OHIM had made substantive errors in the assessment of

bids and had breached the principles of equal treatment and transparency by failing to disclose that they

were applying weighting to certain award sub-criterion. Due to the errors of substance and form committed

by OHIM, as found in relation to the their failure to state reasons, the infringement of tender requirements

and manifest errors in their assessment, the General Court ordered the award decision be annulled in full,

including the rankings of the other successful tenderers in in the cascade mechanism. It was held that OHIM

had breached the principles of equal treatment and transparency because in making its assessment a

“contracting authority cannot apply a weighting of sub-criteria which it had not previously brought to the

tenderers’ attention”.

However, the General Court did not feel that it was able to quantify the compensation and ordered OHIM and

ED to reach an agreement and inform the court of the agreed figure within three months or, if they could not

agree by the end of that period, they were ordered to submit statements setting out their assessments. The

applicant’s claim for compensation for losses arising out of OHIM’s failure to provide proper reason for its

award decision was rejected by the General Court on the basis that it was “unfounded”.

The General Court highlighted the issues that it felt the parties should take into account when discussing the

compensation claim, namely:

the estimated value of the contract, which . This was €13,000,000 (excluding tax) for the maximum 4

year contract period.

the probability of success of ED’s bid. Account must be taken of the fact that its technical and

financial bids were each ranked second and that according to the calculation method set out in the

tender specifications, the weighting of those bids for the award of the contract in question was

50/50;

the loss for which compensation may be awarded by taking into account the net profit which ED could

have obtained during the performance of the framework contract;

the deduction of the profits otherwise realised by ED from not being awarded the contract in order to

avoid it being overcompensated;

the total amount that may be awarded as compensation in respect of the loss of an opportunity.

With regards to the claim for damage to ED’s credibility and reputation, the General Court noted that the

possible annulment of the award decision was sufficient to repair any damage that may have been caused,

without the need to rule on whether the ranking of 3rd place caused such harm. The causal link could not be

8

established between the failures to state reasons and the harm invoked. However, the loss of opportunity

suffered in the present case by ED constituted ‘an actual and certain harm’ within the meaning of the case-

law. The General Court cited Agraz and Others v Commission2 as support for their decision. Therefore, this

claim for compensation was upheld while the rest were rejected.

The Impact

Whilst the litany of cases involving European Dynamics can sometimes make confusing reading, this case does

give some interesting, if not ground breaking, points for contracting authorities to remember. First, mark

tenders carefully it seems obvious but, too often we see tenders incorrectly marked or simple adding up done

incorrectly. The rule should always be check and double check before releasing results. Secondly, evaluation

criteria and their non-disclosure remains a rich hunting ground for those looking to challenge procurement

decisions. We think that this really has improved over the years in the UK but, of course, as procurement

lawyers we should always check with the client teams that all the methodology and criteria they are going to

use to mark bids are clearly set out in the invitation documents. Finally, (and this is more interesting) the

position on damages in this case suggests that, even though there may be no link between the harm suffered

and the lack of reasons, a ‘loss of opportunity’ can constitute ‘actual and certain harm’ which could give rise

to damages.

Lynne Rathbone | +44 (0)1392 458739 | lynne.rathbone@brownejacobson.com

Vicky Bills | +44 (0)1392 458764 | vicky.bills@brownejacobson.com

2 C-243/05 P, Agraz and Others v Commission

9

It was often stated that the law cared more about financial loss than it did about harm to individuals or the

environment, with fines of millions of pounds frequently imposed for financial offences while fines for the

latter languished well-below these levels. This was good news if you were a corporate offender prosecuted

for health and safety, food safety or environmental offences, but often led to criticism of the judiciary in the

media.

The Sentencing Council’s guidelines for environmental offences which came into effect in July 2014, was a

step towards rectifying this presumed disparity between fine levels and, with the publication of the

sentencing guidelines covering health and safety, corporate manslaughter and food safety and hygiene

offences on the 3 November 2015, we now have for the first time a comprehensive and structured approach

to the calculation of sentences for regulatory offences.

As in the environmental guideline, the new guideline provides tables of fine ranges for businesses based upon

turnover, culpability and harm; the higher the level of each, the higher the fine. For example, a business

with a turnover of £50 million committing an offence with very high culpability and the highest level of harm

faces a fine range of £2.6 million to £10 million.

Very large businesses should expect fines beyond this top level however, as the guideline recognizes that:

“Where an offending organisation’s turnover or equivalent very greatly exceeds the threshold for large

organisations, it may be necessary to move outside the suggested range to achieve a proportionate

sentence.”

The guideline will apply to sentences handed down from 1 February 2016, and it should be noted that it is

retrospective in that it applies to offences that have already been committed and have not yet been

sentenced.

The guideline applies not only to businesses, but also to individuals and, it would appear, that the threshold

for imprisonment has been lowered as it is the risk of harm which determines into which category in the

‘harm’ table the causal act or omission falls. As one commentator has stated:

“If a director or employee knows there is a breach of the law that has at least a medium likelihood of

causing death or disability, then the court is directed as a starting point to impose a punishment of one

year’s imprisonment, with a range of between 6 and 18 months depending on other relevant factors. Many

will judge this to be fair if there has been a fatal accident. But alarmingly, imprisonment will be the

conclusion even if there has been no accident at all – just exposure to risk.”

10

Conclusion

We now have an approach to sentencing in health and safety and food safety cases that should ensure a level

of consistency in fines (albeit such fines being higher than ever before) and one which enables defendant

lawyers to provide estimates to their clients as to the likely level of fine more accurately than they have

been able to do in the past.

One potential consequence of the guideline is that cases to be sentenced under it are likely to be extended

and more resource intensive than would previously have been the case, with defendant lawyers arguing each

element of the tables in an attempt to reduce the perceived level of both culpability and harm to reduce the

potential range of any fine. There will, therefore, be a greater emphasis on negotiation which, if not

successful, will lead to Newton Hearings or an extended sentencing hearing.

Will the guideline lead to a safer working environment or safer food? Only time will tell. What it will do is

concentrate the minds of those who make the decisions which influence those outcomes which, one hopes,

can only be a good thing.

Dale Collins | +44 (0)1392 458770 | dale.collins@brownejacobson.com

11

The Treaty on the Functioning of the EU (‘TFEU’) sets out the basic principles relating to trade matters

within the EU. The TFEU and the secondary legislation made under it are the main source of EU rules on

public procurement. Articles 34 and 56 TFEU makes provision for the free movement of goods and services

within the EU, and Article 49 is concerned with freedom of establishment, or the right to set up business in

another member state. It is from these broad principles that the public sector directives stem.

One of the objectives of the EU is to create a common market and eliminate barriers to trade. Restrictive

procurement practices are therefore not permitted under the procurement rules. However, there are a

number of reasons why contracting authorities will try to impose restrictions on the economic operators

which can bid for their contracts; perhaps from a political pressure to buy nationally or locally, or indeed

because of a tendency to source from known local providers or lack of commercial purchasing skills.

Nevertheless, there may well be legitimate reasons for a contracting authority to seek to buy locally. In the

recent case of Grupo Hospitalar Quiron SA v Departemento de Sanidad del Gobierno Vasco and Instituto de

Religiosas Siervas de Jesus de la Caridad The European Court of Justice (“ECJ”) considered the ability of

contracting authorities to restrict those operators who could bid to perform a contract to a particular

geographical area.

The decision comes as a response to a request for a preliminary ruling on the interpretation of Article 23(2)

of Directive 2004/18/EC (‘the 2004 Directive’) (the previous public procurement directive), which provides

that “technical specifications shall afford equal access for tenderers and not have the effect of creating

unjustified obstacles to the opening up of public procurement to competition”. This wording is repeated in

Directive 2014/24/EU at Article 42(2) and at Regulation 42(10) of the Public Contracts Regulations 2015 (‘PCR

2015’). It is therefore an obligation which currently applies to English and Welsh contracting authorities.

The facts of the case were that, in order to relieve pressure on the state funded hospital system, the

relevant Spanish authorities decided to set up a co-operative arrangement with private hospitals, whereby

certain medical services would be outsourced to those private hospitals following the award of a public

services contract. The services themselves would be carried out by publically employed surgeons, but they

would make use of the infrastructure and support services of the private hospitals.

The regional authorities issued an OJEU notice for the contracts, stating that the services would be provided

in respect of patients covered by the public hospitals of Basurto (situated in the municipality of Bilbao) and

Galdako (situated in the municipality of Galdako). The estimated contract value was over the EU threshold.

These contracts were therefore subject to the full rigour of the EU procurement regime. The technical

specifications set out in the contracts included some wording which set out the minimum requirements in

respect of ‘location’. This wording provided that “having regard to the need for those services to be provided

12

with sufficient proximity to patients and their families, the availability of public transport and travelling

time, and the need to minimise the necessary travel by the medical staff of the hospitals...the health-care

centres proposed must be situated in the municipality of Bilbao.” The contracts therefore restricted the

location where the contracts could be performed to the municipality of Bilbao.

Grupo Hospitalar Quiron (Quiron) owns a private hospital situated in a municipality neighbouring Bilbao. It

challenged the procurements on the basis that the requirement to provide the services in Bilbao was contrary

to the principles of equal treatment, freedom of access to public procurement procedures and free

competition (principles which form the foundation of procurement law and which contracting authorities are

obliged to comply with under the PCR 2 015 and Directive 2014/24/EU.) Quirion’s bid met all of the other

requirements of the technical specification other than ‘location’.

The court observed that the tender required bidders to be in a position to provide health care services in

facilities located within the municipality of Bilbao, but did not go so far as to require the bidder to actually

have available or be the owner of hospital facilities in that location. However, the reality of the situation was

that the only providers which would be in that position would be those who owned and had available such

facilities.

The court which referred the question to the ECJ considered that the requirement in the tenders constituted

a restriction of competition and a breach of the principle set out in Article 23(2) of the 2004 directive on the

basis that it could not be justified by any imperative need. They considered the fact that the municipalities

were next to each other and had previously been part of the same municipality, and that Quirion’s hospital

was accessible by public transport from Bilbao and that the services were intended for patients normally

served not only by the hospital in Bilbao but also for patients in other municipalities relevant in making that

decision.

The referring court referred the question of whether “the requirement...that the provision of health

services which is the subject matter of such contracts be carried out only in a determined municipality,

which is not necessarily the municipality in which the patients reside, compatible with EU law?” to the ECJ.

The ECJ considered the facts and decided that the requirement that the hospital from which the medical

services were to be provided was to be situated within a particular municipality was a territorial constraint

on performance which was not justified by an imperative need to ensure that the services were provided in a

location which was close and accessible to patients and the staff which would be required to travel to

provide the services. The ‘location’ requirement therefore conflicted with the right of tenderers to have

equal and non-discriminatory access to the contracts.

The court considered that the requirement as to a geographical location which had the effect of

automatically excluding tenderers who cannot provide the services in question in a particular locality despite

13

the fact that they meet the other conditions set out in the procurement documents was not compatible with

article 23(2) of the 2004 Directive.

The contracting authority in this case could not provide a justification for the ‘location’ requirements in a

way which convinced the ECJ that it was imperative that the performance of the contract was carried out by

operators in a particular location, despite wishing to meet the legitimate objectives of ensuring that the

services could be provided in a location which was convenient and accessible to staff trying to access them. It

is therefore clear that the courts are likely to take quite a restrictive view when considering the ability of

contracting authorities to limit the scope within which a contract may be performed.

Indeed, the position taken by the ECJ in this case is very similar to the approach it took in similar

circumstances in the case of Contse SA, Viviso Srl and Oxigen Salud SA v Insalud , in which it was held that

criteria which an operator must meet to be eligible to submit a bid, or evaluation criteria which are likely to

hinder the exercise of the freedom of to provide services provisions in the TFEU may only be permitted where

the measure is applied in a non-discriminatory manner, justified by imperative requirements in the public

interest and suitable and proportionate to the objective which is being pursued.

Contracting authorities should bear in mind that the 2014 Directive and PCR 2015 particularly require that

“technical specifications shall afford equal access for tenderers and not have the effect of creating

unjustified obstacles to the opening up of public procurement to competition”. This means that whilst there

may still be some scope for geographical restrictions in technical specifications where these can be justified

by some imperative need; contracting authorities will need to consider carefully whether the need could be

met without such a restriction, and the factual situation within which they are operating.

Angelica Hymers | +44 (0)115 976 6092 | angelica.hymers@brownejacobson.com

Birmingham Exeter London Manchester Nottingham

www.brownejacobson.com 14

The traditional description of the roles of members and officers is that members are responsible for

determining policy while officers are responsible and accountable for providing advice, for implementing

policy and managing the local authority as an organisation. Notwithstanding legal changes such as ‘cabinet

government’ and the advent of executive members with delegated powers, it remains the case that members

should not become involved in operational detail while officers must demonstrate commitment to properly

adopted policies of the authority and to giving effect to those policies regardless of personal politics. Mutual

respect between members and officers is essential to good local government. It is important that members

and officers should observe reasonable standards of courtesy to each other.

Key to creating a successful relationship between officers and members is the understanding by each party of

their respective roles. This article takes a further look at the roles and responsibilities of officers and

members.

The responsibilities and liabilities of members

Case law establishes that members of a local authority occupy a position of trust. They are sometimes

referred to as ‘quasi trustees’.

Members have a general duty to ensure that their personal interests are not brought into conflict with those

of their authority and must act in the best interests of the authority if a conflict arises.

A member of a local authority is not free to act in his/her own interest. Such a member occupies a position of

trust. As a person holding such a position of public trust, a member of a local authority has an obligation to

act lawfully, honestly, carefully, reasonably and with a due regard to the interests of those required to fund

the authority’s activities.

That trust imposes a duty on a member to ensure that the local authority of which he/she is an elected

member complies with the law and does not act unlawfully as far as he/she reasonably can. That duty is not

confined to occasions on which a member may attend a meeting of the local authority, its cabinet or at any

of its committees or sub committees. For example it would be wrong for a member at a meeting with

officers, with other members or at a party meeting or on other occasions, to support or promote a proposal

which would involve the local authority of which he/she is a member acting unlawfully. To do so would be

misconduct.

A member’s duty is personal. But it does not follow that he/she has no responsibility for decisions which may

be taken collectively. If a member fails to discharge his/her duty he/she could be liable for any resulting

15

loss. Moreover, although mere knowledge of the misconduct of others may not of itself constitute misconduct

on his/her part, a member is under a duty to do what he/she reasonably can to ensure that such misconduct

of which he/she is aware is ineffective.

In general, members may discharge their responsibilities by:

establishing an appropriate decision making structure with appropriate delegation

establishing appropriate arrangements for members to be provided with information sufficient to

enable them to satisfy themselves as to the manner in which their authority’s functions are being

discharged

establishing financial, procurement and other controls, with appropriate checks and balances,

including the appointment of a ‘chief finance officer’, an adequate and effective system of internal

audit, the appointment of a head of paid service and the appointment of a monitoring officer. The

appointment of a chief finance officer, a head of paid service and a monitoring officer is required by

statute1 2

establishing appropriate arrangements for securing economy, efficiency and effectiveness in the

authority’s use of resources, including a system of monitoring and performance review

making appropriate arrangements for the appointment on merit of suitable qualified and competent

officers; but see section 9 of the Local Government and Housing Act 1989 for the position in respect

of assistants for political groups.

A member should not do anything (in terms of personal conduct) which he/she could not objectively justify to

the public. It is not enough to avoid actual impropriety. Members should at all times avoid any occasion for

suspicion and any appearance of improper conduct, for example, the acceptance of gifts, favours or

excessive hospitality. Members should not allow the impression to be created that they are or may be using

their position to promote a personal or private interest, whether direct or indirect and whether pecuniary or

not, rather than acting in the public interest.

The responsibilities of officers

In general, officers are engaged under section 112 of the Local Government Act 1972 for the “proper

discharge” by a local authority of its functions. Officers are appointed to serve the authority as a whole and

their contracts of employment are with the authority.

1 Section 151 Local Government Act 1972 and sections 114 Local Government Finance Act 1988, section 4 Local Government and Housing Act 1989 and section 5 of the 1989 Act respectively. 2 In Wales an additional statutory officer (Head of Democratic Services) must be appointed: see section 8 of the Local Government (Wales) Measure 2011.

16

A local authority may arrange for the delegated discharge of its functions, including by officers. In

discharging delegated functions, officers3 are subject to public law principles.

Where senior officers are discharging an authority’s functions pursuant to delegation arrangements or have

specific statutory tasks to perform, their position is analogous to that of Members. When acting in that

capacity, officers have what is sometimes referred to as a ‘fiduciary duty’. Such officers occupy a position of

trust and are under an obligation to act lawfully, honestly, carefully, reasonably and with due regard to the

interests of those who may benefit from, or be affected by, discharge of the authority’s functions and the

interests of those required to fund the authority’s activities.

Officers are responsible for ensuring that the authority, its cabinet, committees and sub committees are

informed of the facts, the law and all other relevant considerations, before they make decisions. Officers are

also responsible for proposing, and advising on, policy options. Officers called upon to provide information, to

advise or to help formulate advice owe a duty to discharge that responsibility with reasonable care. This is a

duty which they owe to the authority as a whole, not to any political group which may for the time being

constitute a majority. An officer’s duty to provide information and advice is to be exercised impartially,

independently of any member’s preference and in the interests of the authority. Failure to discharge that

duty, for example by withholding or misrepresenting material information is misconduct: see Re Hurle-Hobbs

ex parte Riley, 20 November 1944, where the Town Clerk, when threatened with dismissal, placed his

personal interests above his duty. As in ex parte Riley, duress provides no defence to an allegation of breach

of duty; obedience to (unlawful) orders likewise provides no defence; see Attorney General v De Winton

[1906] Ch 106 and R v Saunders (1855) 24 LJMC 45 at page 48.

Officers may properly be called upon to advise or report on proposals which may emanate from particular

members. But it is no part of the responsibility of any officer to seek to persuade members to do that which a

majority or any other group of members or any individual member may prefer the authority to do or to frame

any information or advice that the officer may provide to Members to facilitate the achievement of any such

preference. He/she is not the servant or agent of such a group of members or of an individual member.

An officer’s duties are not merely to refrain from doing those things which may not be done in the proper

discharge of the authority’s functions. Officers are engaged to help ensure that those functions are properly

discharged. An officer also has a duty to ensure, so far as he/she reasonably can, that the authority complies

with the law and does not act unlawfully. That duty is not necessarily discharged merely by giving

information and advice when expressly called upon to do so. As Re Hurle-Hobbs ex parte Riley indicates, it

may require disclosure when the circumstances call for it. That duty may require the disclosure by an officer

of the misconduct or suspected misconduct on the part of his/her superior officer or any other employee of

the authority or on the part of a member. What an officer should reasonably do to ensure that an authority

3 and members.

17

complies with the law will depend on the circumstances. But, it would be wrong for a responsible officer of a

local authority to do less than that which he/she can reasonably do to ensure that his/her employing

authority complies with the law.

Conclusion

The working relationships between members and officers are integral to the successful operation of an

effective local authority. Mutual respect and good communication based on high standards of conduct are

central to establishing positive member/officer relationships. Members and officers need to be aware of their

separate but complementary functions and take care to ensure that their authority is not exceeded. Both

parties should be prepared to engage constructively with each other, and to put politics to one side.

Ben Standing | +44 (0)115 976 6200 | Ben.Standing@brownejacobson.com