It is an unfortunate reality that many local authorities face historical abuse claims, and often held vicariously liable for abuse by their former employees. We set out an overview of recoveries law and insight into successes we have had in recouping money for local authorities.
This article is taken from November's public matters newsletter. Click here to view more articles from this issue.
It is an unfortunate reality that many local authorities face historical abuse claims, and very often will be held vicariously liable for abuse by their former employees. However, there is an increasing willingness on the part of local authorities and their insurers to look to the abuser for recovery of the outlay incurred in settling the claims from victims of abuse.
Having developed, alongside our clients, an effective recovery strategy we have seen a significant increase in the sums successfully recovered from abusers. This opportunity and ability to pursue the abuser, following the conclusion of the claim against the local authority, can easily be overlooked - we set out below a brief overview of the law that underpins recoveries and then some insight into the success we have had in recouping money for clients.
The Civil Liability (Contribution) Act 1978 (“the Act”) provides a defendant to a claim the opportunity to pursue a third party for recovery after the defendant has settled the claim against it. The recovery claim must be brought within the limitation period of 2 years from the date damages were agreed or judgment was entered.
The Act is framed in such a way that, in the context of an abuse claim, a local authority is not required to prove that they were liable to the victim in order to pursue a recovery under the Act - s1(4) of the Act states: “A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage….shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.”
The interpretation of the Act was considered by Lord Justice Rimmer in the Court of Appeal Judgment of WH Newson Holding Limited & Others (Claimants) -v- IMI PLC (1) & IMI Kynoch Limited (2) & Delta Limited (1) & Delta Engineering Holdings Limited (Part 20 Defendants/Appellants)  EWCA Civ 773, in which it was confirmed that the key issue is not whether the recovering party was, without doubt, liable in the initial action (which would often require the initial claim to proceed to trial), but rather that the settlement was bona fide. It is open to an abuser facing a recovery action to argue that the original settlement was not genuine, for example because it was collusive, corrupt or dishonest. However, in reality it is extremely rare for an original settlement to be successfully challenged.
In light of the legislation and judgment, if a bona fide settlement has been reached and the factual basis of the victim’s claim would more likely than not have established that the local authority was liable, then a recovery can be pursued and should be considered.
If limitation has passed to bring a claim under the Act then a claim for breach of contract, if the abuser was an employee, might provide an alternative route to recovery.
The majority of claims brought by victims are against the local authority responsible for their care at the time the abuse took place. It is common for those claims to be settled on behalf of the local authority before we look to a recovery from the abuser, which allows the costs to be managed in the initial claim and then a focus on the recovery.
Where an abuser has been convicted it is a more straightforward process to establish a liability, although a conviction is not essential and we are often able to produce persuasive evidence that allows a successful claim to be pursued, such as convictions in respect of other victims or admissions or partial admissions made in contemporaneous records.
Although we seek to recover all sums paid out to victims a full recovery is not always achievable, whether due to a litigation risk or the availability of assets held by the abuser. An example of the litigation risk is where failings in supervision or monitoring by the local authority have facilitated or prolonged the abuse. When considering how much should be recovered from the abuser the court has to make an assessment of where the ‘fault’ lies. If there is some culpability on the part of the local authority a full recovery will not be possible, but a partial recovery can still be made.
As to availability of funds, it might be that the abuser simply does not have any or sufficient assets and we will want to establish the position at the earliest opportunity to avoid further costs being incurred where there is no realistic prospect of making a recovery. We have an intelligence team that trace abusers and conduct immediate asset searches which help shape our advice on the prospects of a successful recovery. Our experience is that the role held by former employees impacts the prospects of a successful recovery with higher status and comparatively higher paid roles (such as teachers) more likely to have funds and assets to satisfy a recovery claim.
Over the last 5 years we have recovered more than £1million from abusers, in addition to successfully establishing a number of ongoing payment plans and charging orders on properties (where significant sums will be realised on sale of the property or death of the abuser). The recovery strategy has been well received by our local authority clients because it is an extremely effective way of recovering public money and ensuring that those who perpetrate abuse bear the cost of compensating their victims.
At Browne Jacobson we are passionate about recovering money for the benefit of the public purse whilst tightly managing our own costs. If you would like to find out more about our recovery service or have any questions we would very much like to hear from you.
Law firm Browne Jacobson has collaborated with Wiltshire Council and Christ Church Business School on the launch event of The Council Company Best Practice and Innovation Network, a platform which brings together academic experts and senior local authority leaders, allowing them to share best practice in relation to council companies.
In the Autumn Statement delivered on 17 November, rises to the National Living Wage and National Minimum Wage rates were announced, to take effect from 1 April 2023:
Announced in September but scrapped on 17 November the investment zone proposals were very short lived. The proposal has now morphed into the proposal for a smaller number of clustered zones earmarked for investment.
Settlement agreements are commonplace in an employment context and are ordinarily used to provide the parties to the agreement with certainty following the conclusion of an employment relationship. There are already restrictions on the extent to which personal injury claims can be settled by a settlement agreement. There have also been numerous consultations about the use of non-disclosure agreements and confidentiality clauses, particularly where allegations of sexual harassment and discrimination have been raised. In any event, it is clear that settlement agreements should not be used to prevent an employee from raising a protected disclosure.
On 2 November 2022, the Supreme Court handed down its judgment in the much awaiting case of Hillside Parks Ltd v Snowdonia National Park Authority  UKSC 30. The Court’s judgment suggests that the long established practice of using drop-in applications is in fact much more restricted than previously thought. This judgment therefore has significant implications for both the developers and local planning authorities.
In ‘failure to remove’ claims, the claimant alleges abuse in the family home and asserts that the local authority should have known about the abuse and/or that they should have removed the claimant from the family home and into care earlier.
Across the UK, homelessness is an urgent crisis, and one that is set to grow amid the rising cost of living. Local authorities are at the forefront of responding to this crisis, but with a lack of properties that are suitable for social housing across the UK, vulnerable individuals and families are often housed in temporary accommodation.
Claims arising from interest-only mortgages have been farmed in volume. Many such claims to date have sought to drive a narrative that interest-only mortgages are an inherently toxic product and brokers were negligent simply for suggesting them. Taylor is a helpful recalibration, focussing instead on what the monies raised by the mortgage product were being used for and whether the client understood the inherent risks.
In an effort to build a stronger justice system, a shift in priorities has emerged away from adversarial court battles and more towards opportunities for consensual resolution. As one of the most popular forms of Alternative Dispute Resolution (ADR), mediation has become increasingly encouraged.
Updates include UK Shared Prosperity Fund, contracts, Subsidy Control Bill, data controller liability, Government Covid-19 procurement and Highway Code revisions.
The complex and rather nebulous transitional subsidy control regime set out in the UK-EU Trade and Co-operation Agreement and the UK’s wider international commitments has made it difficult for public authorities and those working with them to proceed with certainty where subsidies are involved.
Investment zones have been introduced by the Conservative party to get the United Kingdom (UK) ‘working, building and growing’. They are to be designated sites which provide time-limited tax incentives, streamlined planning rules and wider support for local growth to encourage investment and accelerate the development of housing and infrastructure that the UK needs to drive economic growth. Processes and requirements that slow down development will be stripped back with the intention of attracting new investment.
In a judgment handed down yesterday the Supreme Court has affirmed that a so called “creditor duty” exists for directors such that in some circumstances company directors are required to act in accordance with, or to consider the interests of creditors. Those circumstances potentially arise when a company is insolvent or where there is a “probability” of an insolvency. We explore below the “trigger” for such a test to apply and its implications.
Created at the end of the Brexit transition period, Retained EU Law is a category of domestic law that consists of EU-derived legislation retained in our domestic legal framework by the European Union (Withdrawal) Act 2018. This was never intended to be a permanent arrangement as parliament promised to deal with retained EU law through the Retained EU Law (Revocation and Reform) Bill (the “Bill”).
Practice Direction 57AC (“PD57AC”) relates to witness evidence in trials and explicitly applies only to the Business and Property Courts. It applies to existing proceedings in which the witness statements for trial are signed on or after 6 April 2021.
It is clear that the digital landscape, often termed cyberspace, is a man-made environment, in which human behaviour dominates and where technology both influences and aids our role in it — through the internet, telecoms and networked computer systems, which are often interdependent. The extent to which any organisation is potentially vulnerable to cyber-attack depends on how well these elements are aligned.
Three months on from the commencement of the new statutory Integrated Care Systems (ICS) Anja Beriro and Gerrard Hanratty reflect on the main themes and issues that have come from the new relationship between local government and health.
The Supreme Court has unanimously dismissed the BTI v Sequana appeal and reviewed the existence, content and engagement of the so-called ‘creditor duty’; being the point at which the interest of creditors is said to intrude upon the decision-making of directors of companies in financial distress.
The Procurement Bill (the Bill) has now been with us for about four months, during which time there have been a huge number of amendments proposed in the House of Lords (circa 320). Lately, there has been less mention of it — unsurprising, really, given everything else going on in politics recently — but here’s a summary of some of the key issues and themes so far.
Browne Jacobson has been named as a supplier on Crown Commercial Service’s (CCS) Public Sector Legal Services Framework on Lot 1a – full-service provision (England and Wales) and Lot 2a – general service provision (England and Wales).
The increased use of artificial intelligence (AI) is revolutionising the way businesses operate and is having a disruptive impact in sectors that have traditionally been slow to modernise.
Browne Jacobson has been ranked as a Top Tier law firm in 25 key practice areas in Legal 500 UK 2023, the independent directory of comparative law firm performance. The firm also continues to underpin its status as one of the leading law firms in the East Midlands region with 16 Tier 1 rankings.
Welcome to our September edition of Public Matters, our monthly round-up of legal updates, news and insights for the public sector.
Since the UK left the EU and are now able to move away from the EU data protection regime, the UK government have implemented a national data strategy with the aim of reducing the burden on organisations but maintaining a high data protection standard.
The Chancellor’s recent mini-budget provided a significant announcement for business as it was confirmed that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 will be scrapped from April 2023.
Devolution is the transfer of powers in areas like transport, housing and skills in England and since the Cities and Local Government Devolution Act 2016 has been a much-discussed topic.
In this article we look at local authority companies and whether they are subject to the Freedom of Information Act 2000. And for those that are, what information are they legally obliged to submit.
The Department for Levelling Up, Housing and Communities (DLUHC) has published a consultation on proposals to require Local Government Pension Scheme (LGPS) administering authorities (AAs) in England and Wales to assess, manage and report on climate change risks.
The concept of Legal Project Management (“LPM”) is increasingly relevant to the delivery of legal services, both in-house functions and private practice law. This is unsurprising, LPM is crucial if lawyers are to add value by controlling budgets, communicate pro-actively on risk mitigation and costs, and manage time by resourcing to deal with pinch points in the project.
The Department for Education (DfE) have announced that the conversion of Donisthorpe Primary School in Leicestershire on 1st September marked the 10,000th academy conversion.
Welcome to our August edition of Public Matters, our monthly round-up of legal updates, news and insights for the public sector.
On 31 August 2022, the Court of Appeal handed down the Judgment in respect of the appeal case of HXA v Surrey County Council and YXA v Wolverhampton City Council .
This month, HM Treasury issued a consultation on Administrative Control Process for Public Sector Exits with draft guidance. They’re proposing to introduce an expanded approvals process for employee exits and special severance payments, and additional reporting requirements. If approved, the proposals will impact public sector bodies and those that do not have a specific right to make exit payments.
The focus on the Levelling Up agenda and the availability of grant funding, means there are numerous important regeneration schemes actively being pursued across the country. With ever-escalating project and building costs, in many cases, applications that were made for grant funding were based on costs contingencies that have already been exceeded.
The Government has recently published its response to the consultation on Subsidies and Schemes of Interest and of Particular Interest under the Subsidy Control Act 2022. In this article, our subsidy control experts discuss some of the key points coming out of the response, and their impact for public authorities.
Deprivation of Liberty Safeguards was due to transition to Liberty Protection Safeguards in October 2020 but delayed due to the pandemic. While the public consultation has now closed and we’re still unclear of what the final legislation and code will look like, it’s worth noting and keeping a watching brief.