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You are here: BAILII >> Databases >> The Law Commission >> PUBLICATION OF LOCAL AUTHORITY REPORTS (A Consultation Paper) [2002] EWLC 163(1) (20 March 2002) URL: http://www.bailii.org/ew/other/EWLC/2002/163(1).html Cite as: [2002] EWLC 163(1)

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PART I

INTRODUCTION, FACTUAL BACKGROUND AND SUMMARY OF CONCLUSIONS

1.1      In February 2000 Sir Ronald Waterhouse published the results of the inquiry he chaired into abuse of children in care in North Wales.^[1] Concern was expressed in the Waterhouse Report that in some circumstances local authorities may be unduly inhibited from acting in the wider public interest. They might be constrained by threat of legal action or loss of insurance cover from publicising failures in service delivery, from acting on inquiry recommendations, and from identifying necessary reforms in the light of the results of inquiries conducted by them, or on their behalf. In particular, it was said that publication might amount to an admission of liability and the waiver of legal rights by the authority, and also that the authority's insurers feared actions for defamation if reports were published.
1.2      A local authority inquiry is set up where it is thought that there has been some wrongdoing of some seriousness and that the implications are likely to go wider than the individual complaint. If the effect of the law is to impede publication of the report of the inquiry, then there are several adverse results. Whatever has gone wrong will be more likely to occur again if steps are not taken to prevent it. The authority which set up the inquiry could learn from the report – but if the report is not published, other authorities and bodies which could also benefit from the report will not be prompted to improve their own practices. The facts in relation to the individual complaint ought to be put into the public domain, but if the report is not published they may not be. This might prevent the claimant or other potential claimants from obtaining any damages which are lawfully due to them. It would also be regrettable from the point of view of transparency and accountability generally.
1.3      The problems discussed in this consultation paper arise out of a tension between the broad public duty of a local authority, to provide services to the public, in the course of which it may need to acknowledge and learn from its mistakes and thus to review and change its practices, and the narrower fiduciary duty of a local authority owed to council taxpayers to manage its finances properly. This includes a responsibility not to vitiate its insurance cover. A balance must be struck by the authority between the interests of the public as recipients of services and the interests of the public as people who pay for those services.^[2]
1.4      The Waterhouse Report recommended that the Law Commission examine the legal issues surrounding the publication of local authority reports, and consider whether there is a need to reform the law. The matter was formally referred to us on 19 February 2001.

The terms of reference

1.5      The terms of reference ask the Commission

[t]o consider the concerns raised in paragraphs 32.44 – 32.62 of the Waterhouse Report that in some circumstances local authorities may be unduly constrained by threat of actions or loss of insurance cover from making public, acting upon, and identifying necessary reforms in the light of the results of inquiries conducted by them, or on their behalf.

Having regard to the matters of tort and contract raised in those paragraphs, to review:

(a) the law of defamation as it applies, and the privilege that such authorities can claim, in such circumstances;

(b) the possible loss of public interest immunity or privilege against disclosure, and the making of admissions of liability, in such circumstances;

(c) the way in which existing practices for insuring local authorities against liabilities in relation to defamation, or other torts, may contribute to these problems.

To recommend courses of legislative and/or administrative action that would better enable local authorities to take effective action in response to matters of serious public concern contained in such inquiries, and to do so in as open a way as appropriate.

1.6      The terms of reference are restricted to local authorities,^[3] but in principle the same issues will apply to any body which provides a public service, other than central Government.

The factual background

1.7      As the Waterhouse Report states, it had been known for several years that serious sexual and physical abuse of children had taken place in homes managed by the former Clwyd County Council in the 1970s and 1980s. In 1991, criminal investigations were begun by North Wales police that led to eight prosecutions and seven convictions of former care workers.^[4]
1.8      Prior to the Waterhouse inquiry, which was set up by Parliament, inquiries had been established by Clwyd County Council to investigate allegations of sexual abuse and related matters. It is these inquiries that form the basis of our reference.
1.9      We set out below the chronology of the inquiries and the problems that they posed for Clwyd County Council.

The Cartrefle inquiry

1.10      The Cartrefle inquiry focused upon allegations of abuse at the Cartrefle Community Home following the conviction and sentencing of Stephen Norris in November 1990. It was established on behalf of Clwyd County Council social services department and was chaired by John F Banham, a retired senior officer of Cheshire social services department. The Clwyd Area Child Protection Committee^[5] was informed of the social services inquiry and decided that parallel inquiries should be set up by the education department and the health authority. The three inquiries were completed in June 1991, and the Clwyd ACPC commissioned an overview of the inquiries. The overview was conducted by a panel of five members, which reported back to Clwyd in February 1992.
1.11      The conclusions of the overview, and the responses of the Director of Social Services were placed before the Social Services Committee on 27 October 1992. Between February and October 1992, the County Solicitor had been discussing with the insurers (Municipal Mutual Insurance Limited)^[6] and the Crown Prosecution Service the extent to which the report could be published. The insurers intimated that publication, even on a limited scale, could amount to a waiver of public interest immunity or privilege. The Crown Prosecution Service was of the opinion that publication might prejudice forthcoming or contemplated criminal proceedings and would constitute contempt of court.
1.12      The County Solicitor came to an agreement with the insurers whereby extracts of the conclusions and recommendations would be circulated to members of the Social Services Committee and the ACPC. Furthermore, discussion by the members was confined to general principles; there was to be no debate on matters that might be the subject of criminal proceedings or generate claims against the County Council.
1.13      In the event, dissemination to the public of the Cartrefle inquiry report was not possible because of the ongoing criminal proceedings. Publication of the overview would have prejudiced those proceedings and constituted contempt of court.

The Jillings report

1.14      The continuing police investigations, in addition to preventing publication of the Cartrefle inquiry, prohibited the establishment of a public inquiry. Following concern that the police investigations were becoming increasingly protracted, Clwyd decided to set up another ad hoc inquiry. The council took the view that it would then be able to review past practice quickly in order to ascertain whether anything more needed to be done to secure the proper care and protection of children.
1.15      The inquiry, to be chaired by John Jillings, a retired Director of Social Services for Derbyshire, was instructed to conduct an investigation "into the management of its Social Services child care services from 1974 to date with particular reference to those concerns which prompted the investigation by the North Wales Police."^[7] The proposal to set up the inquiry was discussed by the Leader of Clwyd Council and the Chairman of the Social Services Committee with the Chief Executive, the Director of Social Services and the County Solicitor and approved by the Social Services Committee on 12 January 1994. The council's insurers were not consulted about the proposal. It was anticipated that the inquiry would be finished by August 1994; its report would be submitted to the County Solicitor and the Director of Social Services, and it would then be put before the council's Policy, Finance and Resources Committee. The report was not in fact finished until February 1996, being provided to the County Solicitor on 22 February 1996.
1.16      It is significant that Clwyd County Council was due to be dissolved on 1 April 1996, so the authority did not have long to decide how to react to Jillings' report. Paragraph 32.43 of the Waterhouse Report describes what happened next:

… [the report] was given very limited circulation. It was seen by the senior officials involved and by the Leader of the Council, who consulted other leading members of the Council nominated by their respective groups. According to Loveridge,^[8] "The initial reaction of the Council was one of amazement (at) the number of inaccuracies contained therein and the style and content of the Report". It appears that an effort was made to establish a list of the alleged factual inaccuracies with a view to concurrent publication with the Report and on 7 March 1996 instructions were sent to Leading and Junior Counsel to advise on the question of publication. Supplementary instructions were sent to them shortly afterwards in the light of representations by the North Wales Police and by the Council's insurers and by 20 March 1996 Loveridge had received a Preliminary Joint Opinion, a Joint Opinion and a Supplementary Joint Opinion from Counsel.

1.17      Counsel were asked to advise:

(1) whether publication of the report might avoid Clwyd's insurance policy, bearing in mind the large number of objections raised by the insurers to any publicity attaching to the report;

(2) the potential liability of Clwyd for publication of any defamatory comments contained within the report; and

(3) whether there was any risk to the proper administration of criminal justice through the impact upon any pending trials of publication of the report.

1.18      In short, counsel's answer to the first question was that publication might indeed avoid the insurance policy. In relation to the second problem, counsel's view was that the council could rely on the common law defence of qualified privilege in relation to "publication" of the report in the sense of disclosing it to members of the council, but not in relation to publication to the public at large. The report was made available to councillors, but in an extremely restricted way: it was not even circulated to them. It was to be discussed by the relevant committee in private, and there was to be no discussion of its contents with the media or the public. There would then be no adverse impact on any pending criminal trials. Counsel advised that if the report was not dealt with as they advised, then there could be some risk that publication of the report could adversely affect the administration of criminal justice.
1.19      The Waterhouse Report describes how the council then dealt with the report:

The advice of Counsel was accepted and the Policy, Finance and Resources Committee duly received the report at its meeting on 22 March 1996, after earlier discussions between the leading members referred to earlier. The committee dealt with the matter by simply noting the report and agreeing to refer it to the Secretary of State for Wales to assist him in considering whether or not a public inquiry should be instituted. The procedure adopted is not clear but the evidence is that neither members of the committee nor other members of the council read the report. It may have been available in an office for them to read if they wished to do so. The decisions of the committee were approved by the Council at its last meeting on 26 March 1996.

The Welsh Office also had sought advice about the feasibility of publishing the Jillings Report and had consulted Treasury Counsel. We have not seen any written opinion given by the latter but in a letter to Loveridge (as Director of Legal and Administration for Flintshire County Council, the designated successor authority to Clwyd in respect of insurance matters), dated 14 May 1996, the Welsh Office did state:

It is not normal practice for Treasury Counsel's advice to be made available or divulged to third parties in the way that you have suggested. However, I can advise you that while in our discussions with Counsel he has generally endorsed [the opinion of the counsel instructed by Clwyd] on this matter he has indicated that it should be possible to publish an edited version of the Report's recommendations. This could be accompanied by some newly-drafted contextual passages which would explain the basis on which the recommendations are made.

At this time the Welsh Office was encouraging the successor authorities to produce an edited version of the Jillings recommendations but was unwilling to publish such a document itself. The successor authorities did not, at first, reject the idea of publication and discussed with Jillings the possibility of preparing a "safe" version but they concluded by 6 June 1996 that they could not publish the report and the Secretary of State was so informed. The problem then receded, however, with the Prime Minister's preliminary announcement on 13 June 1996 of the Secretary of State's intention to institute a public inquiry.^[9]

1.20      That inquiry was the Waterhouse inquiry itself, which concluded in February 2000.

The Waterhouse Report

1.21      Waterhouse noted that the legal problems surrounding the Jillings report were "more complex but essentially similar"^[10] to those arising out of the Cartrefle report. The criminal proceedings had been concluded by the time of the Jillings report, so there was no danger of being in contempt of court by prejudicing a prosecution. But the report itself gave rise to serious legal questions about defamation, admissions of liability and waiver of privilege. It was also feared that statements which councillors might make on publication would themselves amount to admissions of liability and waiver of legal rights. The net effect was that the inquiry conducted by Jillings, initially set up as "an internal investigation for the County Council into the management of its Social Services child care services from 1974 to date with particular reference to those concerns which prompted the investigation by the North Wales Police" failed to produce any changes in practice or to increase general understanding, inside or outside the council, of what had gone wrong.
1.22      The problem for Clwyd County Council was not only that it might expose itself to legal actions if it published the Jillings report, but also that it might jeopardise its insurance cover in so doing. Waterhouse concluded that the insurers were right actively to alert the council to these dangers:

Looking at the part played by the insurers' representatives in this history as a whole, we accept that they acted throughout with the honourable intention of preventing Clwyd County Council, its officers and members from acting in such a way that the insurers would be compelled to repudiate liability for claims by victims of abuse or by persons who alleged that they had been libelled by either report. The insurers' representatives adopted an interventionist role with this objective so that Clwyd knew where it stood in the matter; and, in our judgment, that was strongly preferable to a passive role that might well have led to repudiation, with grave consequences for the Council and many others.^[11]

1.23      The insurers' representative to the Waterhouse inquiry did, however, accept that the insurers went too far: "in hindsight, they accept that, at times, the tone of the correspondence on their behalf was intemperate and went too far in the demands made of the Council. They accept also that their approach to the dilemma of striking a balance between the duty of a council to seek the truth and identify reforms on one hand and its duty to protect its financial interests on the other may be open to criticism."^[12] Waterhouse did not make any further criticism of the insurers, but referred instead to steps being taken to produce guidelines for local authorities,^[13] and enumerated the following legal questions:

Firstly, in relation to the law of defamation, the following questions arise:

(1) Should there not be a general statutory provision enabling local authorities to institute inquiries into matters of wide public concern and to publish the reports of such inquiries to the public at large with the protection of qualified privilege, whether or not the public has a sufficient interest in receiving the report within the terms of present legislation?

(2) If not, should not the limits of legitimate publication of such reports be defined in order to safeguard the position of elected members and officers in discharging their public duty?

(3) If the issues are not considered suitable for legislation, should there not be central government guidance to local authorities on them, including guidance as to the format of inquiries and the content of reports?

(4) Is similar legislation or guidance desirable for other public authorities that may need to institute inquiries into matters of wide concern?

We consider that the problems underlying these issues are likely to recur quite frequently and that they are suitable for consideration by the Law Commission.^[14]

1.24      These questions crystallised into the terms of reference as set out at the beginning of this Part.

Our provisional response

1.25      Our first provisional conclusion is that there are indeed legal difficulties which inhibit local authorities from taking effective action in response to matters of serious public concern in as open a way as appropriate, and especially in relation to the publication of reports of non-statutory local authority inquiries.
1.26      We provisionally conclude that there are three elements to the resolution of these difficulties: an effective Agreement to be drawn up by the insurers and the local authorities (overseen by Government if appropriate), a Code of Practice for the conduct of local authority ad hoc inquiries, and possible legislative reform for defamation. We take the view that only the third of these is suitable for further detailed work by us, and we expand on this in Part IX.
1.27      There is already material which can be built on to produce the proposed Agreement between insurers and local authorities: the Local Government Association (LGA) and the Association of British Insurers (ABI) produced joint guidance to local authorities on the insurance aspects of ad hoc inquiries in 1999.^[15] Further, the ABI published a Response to the Waterhouse Report which addresses many of the issues.^[16]
1.28      The Code of Practice we think is needed is, in effect, already being developed. The Society of Local Authority Chief Executives (SOLACE) has set up a Group to review guidance on the conduct of local authority ad hoc inquiries. The review includes a questionnaire to local authority chief executives to establish relevant facts about how inquiries are conducted, reports are written and how the inquiries are handled by the local authorities. We look forward with interest to the results of this Review Group.
1.29      We acknowledge, however, the possibility that consultees might not agree with conclusion as to the best way forward. We therefore put before consultees our full analysis of the issues involved, and our views as to how they might be addressed. We wish to give consultees the opportunity to tell us if legislative reform is needed, where we think it is not.

The structure of this consultation paper

1.30      Parts II – VI provide an outline of existing law and practice. In Part II, we describe what kind of inquiry a local authority ad hoc inquiry is, and the statutory powers which allow an authority to hold such an inquiry.
1.31      In Part III we discuss the liability and insurance of local authorities. We describe the ways in which a local authority may become subject to legal liability, thus paving the way for the ensuing description of the conditions of local authority liability insurance contracts.
1.32      In Part IV we analyse admissions of liability in relation to publication of the inquiry report, but also in relation to the material that an authority might provide to an inquiry panel.
1.33      In Part V we cover the rights that a local authority might waive in publishing the report of an inquiry, examining in turn confidence, legal professional privilege and public interest immunity.
1.34      In Part VI we consider liability in defamation and the defences available to a local authority when faced with a claim.
1.35      Parts VII – IX contain our provisional conclusions and proposals for reform. In Part VII we set out our policy, consider the difficulties revealed by the analysis of the issues in Parts III to VI in the light of that policy, and outline possible solutions.
1.36      We discuss the two non-legislative possibilities for resolving those problems in Part VIII, and in Part IX we examine the legislative solutions.
1.37      We attach two appendices which contain relevant background information. The first of these is the text of Guidance issued to local authorities jointly by the LGA and the ABI. The second summarises the various statutory regimes which govern access to information held by a local authority.
1.38      We should be most grateful for readers' views on the proposals, or indeed on any points made in this paper. We would welcome detailed responses and examples of situations which consultees have met in practice. If consultees' responses bear on the way in which inquiries should be conducted, then we would make those responses available to the SOLACE Review Group. For convenience, the consultation questions are collected together in Part X.

The impact of our proposals

1.39      As we have indicated, we believe there is a real need for reform. In order to assist us in evaluating our provisional proposals, we would welcome comments and evidence about their benefits and costs from consultees. We invite comments about the main practical and economic impact upon the parties involved in the inquiry process, including insurers and other interest groups, and so the final consultation question asks:
1.40      What practical and economic impact, in financial and non-financial terms, do consultees think our provisional proposals would have?

Acknowledgements

1.41      In preparing this paper, we have been helped by discussions with, amongst others, the LGA,^[17] the ABI, Zurich Municipal Insurance, Kieran Coonan QC, Mavis Maclean of the Department of Social Policy and Social Work at the University of Oxford, Philip Thomson of Essex County Council and Sir Ronald Waterhouse. We will continue to work with them. Their views, combined with the responses of consultees to this consultation paper, will be of the greatest possible assistance in shaping the proposals to be published in our final report, due for publication in 2003.
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Note 1    Lost in care: Report of the Tribunal of Inquiry into the abuse of children in care in the former county council areas of Gwynedd and Clwyd since 1974 HC 201 (“the Waterhouse Report”). This inquiry was set up under the Tribunals of Inquiry (Evidence) Act 1921.    [Back]

Note 2    Prescott v Birmingham Corpn [1955] Ch 210.    [Back]

Note 3    We define “local authority” at paras 2.3 – 2.8 below.    [Back]

Note 4    The Waterhouse Report, para 2.01.    [Back]

Note 5    An Area Child Protection Committee (ACPC) is a multi-agency body which is charged with co-ordinating child protection measures in the area of the local authority. It includes the social services and educational local authorities, health services, the police and probation services. We describe ACPCs in greater detail at para 8.60 below.    [Back]

Note 6    Now operating under the name of Zurich Municipal. Waterhouse describes how Zurich Municipal became the relevant insurer at paras 32.55 and 32.56 of the report.    [Back]

Note 7    The Waterhouse Report, para 32.36.    [Back]

Note 8    The County Solicitor to Clwyd County Council.    [Back]

Note 9    The Waterhouse Report, paras 32.49 – 32.51.    [Back]

Note 10    The Waterhouse Report, para 32.58.    [Back]

Note 11    The Waterhouse Report, para 32.60.    [Back]

Note 12    The Waterhouse Report, para 32.60.    [Back]

Note 13    See para 1.27 below.    [Back]

Note 14    The Waterhouse Report, para 32.61.    [Back]

Note 15    This is reproduced as Appendix A below.    [Back]

Note 16    The ABI Response to the Waterhouse Report (December 2000). This and the LGA/ABI Guidance are discussed in Part VIII below.    [Back]

Note 17    Who kindly arranged a round-table discussion for us.    [Back]