Curb extravagant tribunal costs, Welsh councils warned by ombudsman

One council currently faces a potential six figure bill for one case

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The "extravagant" legal costs of defending councillors accused of breaching codes of conduct must end, Welsh local authorities have been told.

Wales' public service ombudsman says councils must put a £10,000 cap on backing individual members.

One council faces a potential bill of a six-figure sum in a single case, BBC Wales can reveal.

Ombudsman Peter Tyndall said: "I believe that such extravagance cannot be justified."

At least nine councils still offer uncapped indemnity costs to their members accused of breaking the rules.

But the ombudsman is warning that this is leading to "hugely disproportionate expenditure" and cases lasting several months.

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The availability of unlimited indemnity, sometimes backed by insurance, has led to hugely disproportionate expenditure”

End Quote Peter Tyndall Public service ombudsman for Wales

The tribunal hearing the case of a Flintshire councillor will reconvene in Mold on Thursday.

It has now lasted more than a year, opening in January 2011, and the council faces potential costs of a six-figure sum after offering unlimited indemnity at the start of the case.

Mr Tyndall said he was concerned that councils are dragging their feet to implement a £10,000 cap on the indemnity offered in such cases, a move that has the backing of Local Government Minister Carl Sargeant.

In a letter to the Welsh Local Government Association (WLGA), he says he fully accepts that councillors must be in a position to put forward a case in their defence when they are accused of breaching their code.

He writes: "In some current and recent cases, the availability of unlimited indemnity, sometimes backed by insurance, has led to hugely disproportionate expenditure, with cases, in some instances, lasting many months.

"At a time of great pressure on public expenditure, I believe that such extravagance cannot be justified."

'Reputational damage'

He was concerned that the current system encouraged wasteful expenditure and the "reputational damage" that may arise but progress from councils in introducing a cap was "slower than desirable".

He said a new system should be in place before May's local elections.

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The liability for, and the level of costs, will only be determined at the conclusion of the protracted adjudication panel hearing”

End Quote Flintshire council

When a complaint is made against a councillor that he or she has breached their code of conduct, then the ombudsman investigates and can, if he deems it serious enough, pass the case on to a formal tribunal.

Councillors are represented by barristers in the hearings, which can lead to substantial expenditure.

Referring to the ongoing case and tribunal, a spokesperson for Flintshire council said: "The liability for, and the level of costs, will only be determined at the conclusion of the protracted adjudication panel hearing.

"No limit or cap was placed on the level of indemnity in this case.

"However, the council's form of indemnity has since been changed, and with effect from 10 October 2011 cover for any new incidents relating to code of conduct will be limited to that provided under the conditions of an insurance scheme which the council has arranged for members to access if they choose."

The Welsh Local Government Association (WLGA) will discuss Mr Tyndall's call for a £10,000 indemnity cap at a meeting of all 22 councils in Cardiff on Friday.

Senior figures acknowledge the current system, where some councils still offer unlimited indemnity, whereas others have introduced varying caps and others do not offer any indemnity, is messy and in need of reform.

However, it is unclear whether a new Wales-wide system will be in place in time for May's local election as Mr Tyndall wants.

A spokesman for Mr Sargeant said: "We have been party to discussions between the ombudsman and the Welsh Local Government Association about developing a common approach for local authorities in setting indemnities and support the proposals being explored."

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