Lexis®PSL Public Sector Newsletter – February 2017

Governance and Costs


    Features | Cases | FYI


    Feature I

    Breach of council code of conduct (Taylor v Honiton Town Council)

    How will the court approach a dispute between a local authority and a town councillor concerning a code of conduct breach by the town councillor? Jeremy Phillips of Francis Taylor Building (who acted for East Devon District Council in the case) comments on the recent ruling in Taylor v Honiton Town Council [2016] EWHC 3307 (Admin) and warns that the costs and wider implications of dealing with such complaints can be significant.

    Background to this case.

    On 28 June 2015, East Devon District Council (EDDC), as its principal authority, received a complaint from a clerk to Honiton Town Council (HTC) that councillor John Taylor had breached HTC’s code of conduct in what he said about her in a statement released about an HTC financial decision on a significant local building project to which he vigorously objected.

    The then interim monitoring officer at EDDC assessed the allegation and considered that a breach of the code had occurred. Councillor Taylor failed to accept those findings and so the matter was referred for investigation. The appointed investigator similarly concluded that a breach had occurred. Councillor Taylor continued to refuse to accept the findings and therefore the matter was referred to a hearing of the EDDC Standards Committee. This took place on 30 November 2015. The Standards Committee ultimately determined that councillor Taylor had breached the code of conduct and made recommendations to HTC accordingly in regard of its findings and sanctions.

    HTC met on 14 December 2015 and accepted the decision of the EDDC Standards Committee and imposed the recommended sanctions together with additional sanctions. Councillor Taylor challenged the decision of HTC (but not that of my client, EDDC) by way of judicial review.

    What did the court have to decide?

    The application for judicial review claimed that:

    • HTC had no power to make its decision—that it was based on a rigid application of policy and that it was imposed for an improper purpose, was inadequately reasoned and perverse
    • the sanctions were not imposed on a proper basis in the light of EDDC’s conclusions on the investigation
    • the hearing before EDDC’s standards sub-committee was procedurally unfair

    The court was invited to decide whether HTC was bound by the findings of EDDC as to the facts and whether there had been a breach of the code of conduct. The decision actually involved two stages—breach and recommended sanction. HTC had withdrawn its decision on sanction, but said that it was still bound by the first on breach. Mr Justice Edis said that the point was not academic to the decision or to the order which should be made:

    ‘If the claimant is right I will quash the finding that there was a breach of the Code because no such finding was made by Honiton which wrongly simply adopted East Devon's decision. If Honiton and East Devon are right I will quash the Decision because Honiton has conceded that it wrongly included sanctions which are beyond its powers.’

    The claimant also sought a declaration as to HTC policy on the conduct of councillors and a ‘steer’ from the court in relation to any determination Honiton might make as to sanctions after its original decision was quashed (as it conceded it must be). Could Honiton rely on the November decision of East Devon, including on disputed matters of fact? Further, given the terms of section 28(11) of the Localism Act 2011 (LA 2011), what were the respective roles of Honiton and East Devon in dealing with allegations of breaches of the code of conduct?

    HTC said simply that it had tried to concede everything and avoid these proceedings, but was unable to accept the claimant’s contention that East Devon merely made recommendations as to whether a breach had occurred and that Honiton must make up its own mind on that issue. Such an approach would make the task of parish councils impossible because they often had no professionally qualified officers. The point of LA 2011 was to remove decisions on breach from them for that reason.

    EDDC, which had been joined as an interested party, pointed out that it was not the subject of any challenge, but that rulings on two questions might be helpful to it and other local authorities. These were:

    • What was the status of a decision of an authority exercising its function as principal authority under LA 2011, s 28?Was a parish council bound to accept (as both HTC and EDDC contended) its findings of fact and on the issue of breach of the code?
    • Was there a power (as EDDC contended there was) to require a councillor to undergo training as to the code of conduct as a sanction consequent upon a finding of breach? On this issue East Devon and Honiton took different positions, with HTC accepting that such a requirement had been ultra vires, whereas EDDC disagreed.

    The court agreed to consider, therefore, whether there was such a power to impose a training requirement. This was not an academic issue because the application of unlawful sanctions was one basis of the quashing order. The extent to which that specific sanction was unlawful was therefore involved in the decision.

    What did the court decide and does this decision assist with interpretation of LA 2011 on breaches and enforcement of members’ code of conduct for parish councils?

    Simply, ‘yes’, in that it clarifies to a significant extent the respective roles of town/parish councils and their principal authorities where there is a complaint as to the conduct of a town/parish councillor.

    Specifically, as regards the first question before it, the court decided that the duty of investigation and the makings of decisions on allegations against members of HTC and subsequent complaints as to conduct did lie with EDDC as principal authority (LA 2011, s 28 (6)(b) and (9)(b)).

    The arrangements for decision making must involve independent persons and the court held that it would frustrate that important safeguard if it were to hold that a parish council had a duty to reconsider the principal authority’s decision and substitute its own if it chose to do so. It should be noted that the court declined to decide that LA 2011 requires the splitting of the decisions as between breach and sanction between the two relevant authorities in the way in which that initially happened in this case. Mr Justice Edis accepted that the language of LA 2011, s 28(11) may point one way, but that LA 2011, s 27(1) and (2) may point the other.

    As regards the ‘training requirement’, the court agreed with EDDC’s contention that neither LA 2011 nor the decision in Heesom v Public Services Ombudsman for Wales (Welsh Ministers intervening) [2014] EWHC 1504 (Admin), [2014] All ER (D) 118 (May) prevented a requirement of training, provided that such would be proportionate to the circumstances of the individual case (per the test of proportionality as stated by Lord Sumption JSC in Bank Mellat v HM Treasury (No 2) [2013] UKSC 38, [2013] 4 All ER 495).

    What are the practical implications of this case?

    Town and parish councils and their members must adopt a code of conduct which applies to their proceedings and be very mindful of the provisions of that particular code. Any such code, when viewed as a whole, must be consistent with the seven ‘Nolan principles’ of public life: selflessness, integrity, objectivity, accountability, openness, honesty and leadership.

    Where there is a substantial and complex dispute concerning the propriety or legality of commercial contracts entered into by a council, their principal authority is likely to be extremely reluctant to determine such a dispute, which it may consider more properly falls within the remit and expertise of the police and/or the criminal or the civil courts.

    Dealing with a code of conduct, a principal authority is entitled to appoint a person independent of the relevant town or parish council to undertake a detailed preliminary investigation of the matter, considering relevant documents and interviewing individuals concerned with the case.

    When a Standards Committee is convened to consider such a preliminary investigation and hold a hearing to determine alleged breaches of such a code, it must ensure that its own proceedings fully respect the rules of natural justice. Although the issue did not arise in this case, the committee should also be mindful of the dicta of Hickinbottom J in Heesom, including those relating to the suspension or disqualification of councillors.

    Where there is a finding of breach of any code, any sanctions imposed must not exceed those which would be lawful under LA 2011. These are not limited to the sanctions of the finding of a breach, censure and/or publicity of that decision. The sanctions described in Heesom were merely examples and not an exhaustive list. However, no power existed to remove a councillor’s right to speak at a council meeting.

    It is, therefore, lawful to require a councillor, found to be in breach of a code, to undertake retraining as regards the duties of councillors and any code of conduct in force.

    As can be seen from this and other similar cases, the costs and wider implications of dealing with such complaints can be very significant for town and parish councils. Taking early advice from your principal authority is essential.

    Interviewed by Nicola Laver.

    The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

    Feature II

    Misuse of court time and costs consequences (Taylor v Honiton Town Council)

    How will courts approach the question of costs following a dispute between a local authority and a town councillor concerning a code of conduct breach? Jeremy Phillips of Francis Taylor Building, who acted in the case for the principal authority East Devon District Council (EDDC), comments on the court’s decision.

    What’s the background to this case?

    On 21 December 2016, Mr Justice Edis handed down judgment in the case of Taylor v Honiton Town Council finding that the duty of investigation and the making of decisions on complaints concerning councillor conduct lay with the relevant principal authority—in that case, EDDC, rather than Honiton itself.

    Despite there being no previous authority on the point, the judge also found that EDDC was lawfully entitled, as it had argued all along, to recommend a sanction that the councillor concerned undergo retraining.

    The crucial question then remaining was how would the court deal with the question of costs when both the councillor and the town council had to some extent been vindicated in the stance they had taken?

    What did the court take into account when making the award of costs?

    The decision on costs was unusually lengthy, running to some ten pages in all. This was explained partly by the fact that, as the judge suggested, this was ‘in some ways an unusual case, or at least one where the underlying facts bearing on the exercise of discretion in relation to costs require some analysis. So, what were those facts?

    First, the court found that ‘Honiton had said on many occasions that it did not intend to implement [its decision on sanctions], and that it was revoked’. The policy which it had applied had been contrary to the advice of officers and had been acknowledged to be:

    ‘not a satisfactory resolution of the need to apply proportionate sanctions which fully reflect the importance of the councillor’s right as an elected member of a local authority to express his views freely’.

    Second, the court recognised that the councillor’s conduct in writing the letter that caused all the trouble in the first place had been ‘a very serious error of judgment’. Whatever the merits of the decisions made in relation to the spending of monies by Honiton, he had misrepresented the role of the town clerk in those decisions in a reckless way.

    What principles did the court apply in making the cost order that it did?

    As a first, not ‘inflexible’, principle the judge suggested that:

    ‘generally, the kind of conduct most relevant to costs is the conduct of the parties in dealing with the dispute once it has arisen rather than conduct which caused it in the first place...The general rule is that the unsuccessful party pays the successful party’s costs and this follows the resolution of the issues giving rise to the dispute. Conduct only becomes relevant where the court is invited to depart from that general rule’.

    Having made that point, the judge claimed ‘However, this is a case where, in my judgment, the interests of justice require a departure from the general rule on conduct grounds.’ In summary, following a lengthy examination of the history of the dispute, he found that Mr Taylor ‘wanted his conduct in writing the letter accusing the Town Clerk of criminal misconduct to be vindicated and this has not happened’.

    In the event, the judge held that Councillor Taylor should pay all costs incurred by Honiton (on a standard basis) after 19 March 2016, the date of its initial offer to settle.

    The judge was clear that he did not think these proceedings should have been brought. What lessons on use of judicial review can be learned from this case?

    Parties should not rush to litigation, particularly where that haste is to meet a time limit that does not apply. Where one party is patently keen to settle, the other side should engage, rather than issue when such terms are not easily agreed. Any collateral motive for issue is likely to become apparent during the hearing of the case. Judges are unlikely to welcome such misuse of valuable court time and resources.

    Interviewed by Nicola Laver.

    The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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    Data and information security

    Janet Dedman v Information Commissioner EA/2016/0142

    Freedom of Information—Personal data. The FTT considered the exemption under FIA 2000, s 40(2), specifically whether disclosure of a draft report to a district council on an investigation resulting from a complaint as to the conduct of the Chair of a parish council, would amount to unfair processing of her personal data. The FTT found that the public, especially the local community, had a powerful legitimate interest in disclosure of the requested information and that the Chair could have no reasonable expectation that it would not be disclosed in the circumstances that arose. That it was a draft report and marked confidential when received was no obstacle to disclosure nor was the fact that the individual concerned was no longer in office.

    Norfolk County Council v Information Commissioner EA/2016/0161

    Freedom of Information—Inhibition to provision of advice and exchange of views and prejudice to the conduct of affairs. The FTT considered the exemptions in the context of a request for information relating to the council’s risk assessment of Norfolk schools. The Information Commissioner had issued a decision requiring the council to disclose the requested information on the basis that FIA 2000, ss 33(1) and 36(2)(c) were not engaged and although FIA 2000, ss 36(2)(b)(i)–(ii) and 36(2)(c) were engaged, the balance of public interest favoured disclosure. Balancing the public interest in transparency about the running of schools, against the risk of schools ceasing to provide information if this was to become public, the FTT found that the balance of public interest favoured maintaining the exemptions from disclosure under FIA 2000, ss 36(2)(b)(i)–(ii) and 36(2)(c).

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    Brexit—Consultation on new industrial strategy for the UK

    Proposals for a Modern Industrial Strategy for the UK include ‘sector deals', investment in research and development to support industries based on new and smart technologies and the creation of more high-skilled, high-paid jobs and opportunities, according to a Green Paper published on 23 January 2017. The industrial strategy is promoted as a vital part of the government's Brexit plans. Ten 'strategic pillars' underpin the proposals, including the need to support businesses as they start and grow and deliver affordable energy and clean growth. The consultation closes on 17 April 2017.

    Elections—Government to trial ID in polling stations

    The government is to trial the use of ID in polling stations, in an effort to combat electoral fraud. The move follows Sir Eric Pickles’ report ‘Securing the Ballot’, published in August 2016, which recommended the government tighten controls around the conduct of polls, to eliminate electoral fraud. It is aiming to pilot ID in polling stations during local government elections in May 2018. If successful, the government has suggested the measure could be introduced for general elections and other polls.

    Equality and human rights—Government responds to public sector gender pay gap reporting consultation.

    The government, following public consultation, is introducing new regulations to incorporate mandatory gender pay gap reporting requirements, alongside the existing specific public sector equality duties. Draft regulations have been published alongside the government’s response to the public consultation. The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 are due to enter into force by 31 March 2017, subject to parliamentary approval.

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