The Local Authorities (Indemnities for Members and Officers) Order 2004 SE Alarm – London 25th January 2006 Fergus Dolan – Public Sector Risk Consultant

2 Overview  Introduction  Legal Background  The Order (English-enacted)  Insurance Implications  Risk Management  Conclusion

3 INTRODUCTION Topical The Local Authorities (Indemnities for Members and Officers) Order 2004 Current Action Health Warning - See your Solicitor !

4 LEGAL BACKGROUND In what roles do personal liabilities arise for Members & Officers? Relevant Legislation -For Members -For Officers Government Consultation

5 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?

6 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)?

7 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

8 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”

9 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