Part VIII

Non-legislative solutions: an agreement and a code of practice

8.1                                      In this Part we examine in more detail the two non-legislative routes to resolving the problems we identified in Part VII: first, a statement of agreed principles or practice between the insurers and the local authorities,[1] and second, a Code of Practice for the conduct of local authority ad hoc inquiries.[2]

A statement of agreed principles

Developments since the Waterhouse Report

8.2                                      We now examine the extent to which the issues discussed have been taken forward since the publication of the Waterhouse Report in two documents: (1) the LGA/ABI Guidance of 1999, and (2) the ABI Response of 2000 to the Waterhouse Report.

8.3                                      Following completion of the Jillings report, the LGA and the ABI issued a Guidance Circular to local authorities on how to approach inquiries concerned with reviewing statutory responsibilities which are subject to indemnity insurance cover: “Ad Hoc Inquiries in Local Government – Insurance Aspects”.[3] It was circulated on 30 September 1999, and is reproduced as Appendix A.

8.4                                      The Guidance “sets out principles which the LGA recommends local authorities apply when considering arrangements for an inquiry concerned with reviewing statutory responsibilities which are subject to indemnity insurance cover.”[4] It begins by reminding authorities to check whether an insurance liability might arise.[5]

The decision to institute an inquiry

8.5                                      The Guidance states plainly that “it is for the authority alone to decide whether or not to hold an inquiry. Insurers would not expect or wish to be involved in such a decision, though it is important that the authority informs the insurer of its decision.”[6] We agree that this is the appropriate approach.

The terms of reference

8.6                                      The Guidance points out the importance of accurate and reasonable reports, and that conclusions be well-founded. It therefore advises that the terms of reference be restricted “to findings of fact and recommendations for the avoidance of a recurrence”.[7] The Guidance advises “instructing the inquiry that comment, opinion or criticism should only be introduced into its report if it is justified; to avoid introducing any inference or supposition into its report; and to ensure that any unproven allegations and unsubstantiated statements are represented as such”.[8]

8.7                                      We doubt it is realistic or right for apportionments of blame to be excluded from the report itself. For example, the author of a report of a review instigated by Brighton and Hove Area Child Protection Committee, Alyson Leslie,[9] writes, “… I would maintain the inadequacy of the professional social work support did not arise principally from the organisational pressures on fieldwork staff in a period of resource redistribution. Rather, it was the result of professional practice that varied between inadequate and negligent.”[10] There are many findings of fact and recommendations in Alyson Leslie’s report, and there is much supporting evidence in her report for her conclusions.

8.8                                      Our provisional view is that it is right not to have the apportionment of blame as one of the aims of an inquiry in its terms of reference,[11] while allowing for the possibility of the expression of this kind of opinion, where it is properly supported by evidence and findings of fact.

8.9                                      There is no mention in the Guidance of the desirability of legal advice on the terms of reference, or, if the inquiry is to be independent, of consulting the person who will be chairing the inquiry on the terms of reference. It seems to us that this would be highly advisable.

8.10                                      Authorities are recommended to instruct the inquiry “to avoid introducing any inference or supposition into its report”.[12] While speculation should have no place in an inquiry report, we doubt whether it is possible never to draw inferences from the facts which have been properly found by the inquiry.

8.11                                      The Guidance also recommends ensuring that the inquiry “avoids reference to liability or matters of compensation”,[13] leaving these strictly to the authority and the insurer. It seems appropriate to us that an inquiry should not generally pronounce on issues of liability, including entitlement to compensation.

Disclosure and statements to the public

8.12                                      The Guidance does not cover precisely what the authority is to do with the report produced by the inquiry. It advises that the authority and insurer(s) “should meet early on to seek a full understanding of each other’s position and concerns …”.[14] It recommends that one of the first steps should be agreeing a “protocol” which, amongst other things, deals with how and by whom statements to the public and media should be made. It states, “Elected members should be fully informed and support the protocol; it may be beneficial for relevant members to be involved in meetings with the insurer(s). These meetings can be used to identify the true legal position, which is equally binding on local authorities and insurers.”[15]

8.13                                      The protocol should identify “who is authorised to speak officially, and to the press”,[16] and “the extent to which (if at all) liability should be admitted”.[17] Given that the insurance contract will almost certainly prohibit an admission without the insurer’s prior written consent, the Guidance very sensibly says that the authority should liaise fully with the insurer before making any admission of liability for events that have occurred.[18]

8.14                                      On the matter of expressing regret, it advises, “A simple expression of sympathy for the affected parties and their families, coupled with an announcement that a full investigation is to be held into the circumstances, can be an appropriate response and does not amount to an admission of liability.”[19]

8.15                                      The Guidance does not specifically address the question of publication of the report, or a version of it, at all. It therefore does not give advice on how a report might be dealt with where the authority itself is not satisfied that it was well-conducted or that its conclusions are fair. As we have made clear in Part VII, we think publication should be the norm, not the exception, and, while it may be rare that the problem will arise, it may well be advisable for there to be guidance for local authorities on how to recognise a report which contains statements which are likely to be defamatory, and how the authority should handle it.

8.16                                      We think it might be advisable for there to be an agreed procedure for the handling of a report by the council, so that the authority could be confident that if it followed the procedure, there would be no question of the insurer treating a resolution of the council as amounting to an admission.

8.17                                      The Guidance is understandably silent on the difficulty of knowing to what extent publication might attract the defence of qualified privilege in an action for defamation.

8.18                                      One of the recommendations in the Waterhouse Report was for this Guidance to be reviewed.[20]The ABI accepted that recommendation in its Response to the Waterhouse Report.[21] We now turn to the contribution made by the ABI’s Response to the amelioration of the problems.

Background

8.19                                      The ABI Response makes a number of points in its “Background” section. The conflict faced by a local authority between its broad public duty as a provider of services and its narrower public duty not to vitiate its insurance cover[22] features early on. In paragraph 2.3 the ABI writes, “Insurers rightly have no direct locus in the setting up of such an inquiry or the publication of its results. These are matters for the authority after appropriate deliberation.” It continues in the next sentence, “Nevertheless, the matters under inquiry may often be the subject of indemnity under an insurance policy, particularly if injury, illness or stress are involved.”

8.20                                      The ABI Response then explains the purpose of certain standard terms in local authority liability insurance contracts. On admissions, it states,

The purpose of the insurance policy is to protect the authority against the financial consequences of claims, so it usually requires the local authority not to make any admission of liability or promise of payment without the insurance company’s consent. This is to protect the local authority from inadvertently jeopardising the position, for example if the authority admitted full responsibility at the start of the inquiry and found out subsequently that the matters under investigation were not legally the authority’s fault.[23]

8.21                                      This indicates that inadvertent admissions are the focus of the insurers’ concerns.

8.22                                      What is not clear is what their approach might be to considered, deliberate admissions of liability. It may well be that, in line with the spirit of the Woolf reforms, which favours early resolution of disputes and the avoidance of litigation, insurers would be inclined to permit admission of liability and to settle claims. Indeed, insurers will often wish to save costs by settling claims where liability is clear.

8.23                                      Another alternative to litigation which insurers and authorities might want to pursue in such cases is Alternative Dispute Resolution. Matters subject to arbitration or mediation may be dealt with on a confidential basis. This offers the possibility of finding a private solution in the individual case, including remedies which litigation does not offer, such as an apology, while leaving it open to the authority to make a public statement of changes in practice which will result.

8.24                                      The ABI Response also does not tackle what we perceive as the practical problem of what might constitute an admission of liability.

8.25                                      The ABI Response continues, “In addition, insurance policies generally include a duty to behave as if uninsured. The purpose of this duty is to prevent the insured (here, the local authority) behaving imprudently simply because its risks are being assumed by someone else.”[24] Again, this is clear enough. As we noted above,[25] the ABI does not expect insurance contracts to be interpreted in such a way that an authority must put the interests of the insurers before all others.

8.26                                      Section 3 is the body of the Response. It is structured following the headings in the Waterhouse Report, and includes the LGA/ABI Guidance at appropriate points. It expands on that Guidance.

8.27                                      Liability insurance contracts will require the authority to notify the insurer if a claim is anticipated, and if an inquiry is being set up. The ABI Response says the insurers “do not want to be involved in the setting up or publication of the inquiry or its report – those decisions are solely for the authority.”[26]

The advertising of requests for witnesses to come forward to give evidence

8.28                                      The ABI Response comments:

The need to consider the overall interests of the alleged victims or witness is paramount. Whilst the authority will have a duty fully to investigate allegations of abuse it should be borne in mind that individual responses to such calls for evidence may result in further trauma to those concerned. Each situation will need careful consideration in light of its own particular circumstances.[27]

8.29                                      It then refers to the possibility of the authority offering counselling and other support services to alleged victims or witnesses. Amongst other points,[28] it advises that “careful consideration should be given to the words used in the surrounding publicity, so that … the authority’s position on liability is not compromised.”[29] The ABI is concerned that the fact that an authority is offering a counselling service should not be construed as an admission of legal responsibility for the events which gave rise to the need for counselling.

Disclosure by the local authority of documents to assist the inquiry; and evidence to the inquiry by council staff, particularly senior officers

8.30                                      The ABI Response states:

Even before a formal inquiry is set up, it would be prudent for the authority to adopt a consistent approach to the collating and recording not only of any allegations brought to its attention but also of any preliminary investigative steps taken as a consequence. It is advisable that the content, date and format of any such discussions are also recorded. This approach will help with the collection and preservation of evidence should an inquiry be set up subsequently.[30]

8.31                                      In relation to “the risk of defamation”, if disclosure is unauthorised, then the person defending any ensuing defamation action will be the person who made the disclosure.[31] The difficulty for the local authority is that, even if disclosure was not authorised, the authority might nevertheless be vicariously liable for the actions of its officers.[32]

References in the course of the inquiry and in any report to matters, including documents, which might be the subject of claims of privilege in subsequent litigation

8.32                                      The ABI Response continues:

An appropriately qualified member of the inquiry team or official of the local authority should examine documents disclosed to the inquiry and the draft report of the inquiry for defamation risk. If there is a serious risk of defamation, there will be a need to consider any possible defence of qualified privilege and, perhaps, the principle of public interest immunity.[33]

8.33                                      As will be apparent from the analysis of the waiver of rights in Part V and of defamation in Part VI, there are two distinct types of privilege which can get confused. First is legal professional privilege, which might be claimed for a document to prevent it being disclosed in litigation, for example where a communication between the legal advisers to the authority and the council was reasonably necessary to the giving or receiving of legal advice. Second, there is privilege as a defence to a defamation action. If the defence of qualified privilege is available, then a claimant will not succeed unless it can be shown that any defamatory statements in the report were made with malice, that is, knowing it to be untrue, recklessly (without considering or caring whether or not it was true), or with some indirect or improper motive. Similarly, while public interest immunity is certainly a matter on which the authority would seek legal advice, it is not related especially to the issue of defamation. In our view, it would be better if these different concepts were addressed separately in any guidance.

8.34                                      At the point when it is considering what material to pass to the inquiry, the authority will want to be mindful of any duty to respect and preserve confidentiality which it might owe to someone else.[34] Our provisional view is that guidance might usefully include a section on the importance of confidentiality.

8.35                                      The ABI Response then reminds authorities that the insurer which bears the risk in relation to questions of liability which may emerge from the inquiry (such as abuse, negligence, assault and so on) will not necessarily be the insurer which bears the risk in relation to any action for defamation arising out of publication (which includes any communication) of an inquiry report.[35] It then goes on to cite paragraph 4 of the LGA guidance, which we refer to and comment on at paragraphs 8.6 – 8.11 above.

The extent of circulation of any report and permissible comment by councillors and officers upon it

8.36                                      The ABI Response repeats the advice given in relation to references in the course of the inquiry and in the report to documents “which might be the subject of claims of privilege in subsequent litigation”:

As above, the circulation and publication of the report may raise the risk of defamation, which should be carefully considered by an appropriately qualified member of the inquiry team or official of the local authority. If there is a serious risk of defamation, there will be need to consider any possible defence of qualified privilege and, perhaps, the principle of public interest immunity.[36]

8.37                                      As regards comment on the report, the ABI Response then repeats the wording of the LGA/ABI Guidance, as described at paragraph 8.12 above, including the passage on recommending a protocol. As we say at paragraph 8.33 above, we think that the concepts of legal professional privilege, qualified privilege as a defence in defamation, and the issue of public interest immunity, should not be run together in a single paragraph, but should be treated separately.

8.38                                      This part of section 3 consists of an argument for the extension of the defence of qualified privilege.[37] It cites part of the Waterhouse Report, and then goes on to describe a possible court procedure which the ABI favours. We consider the possibility of a reform along similar lines in the next Part.[38]

8.39                                      The ABI Response then refers to co-operation with criminal proceedings.[39] The report of an inquiry cannot be published while criminal proceedings are continuing, for fear of prejudicing the prosecutions and being in contempt of court.

8.40                                      The ABI Response advises, amongst other things, that authorities should be encouraged to consider the risk of defamation should there be unauthorised disclosure or publication of that material. We agree that this is a point to which specific attention should be given by a local authority because of the risk that the authority would be vicariously liable for a defamatory statement even if it was made in the course of unauthorised disclosure if made by an employee.[40] The authority must not court liability, which may entail taking reasonable steps to prevent disclosure.[41]

8.41                                      Disclosure of material to the police for the purposes of the investigation of a crime will attract absolute or qualified privilege.[42] If the police themselves then release the information without permission, it will be they who are the “publisher” for the purposes of any defamation action.

Conclusion

8.42                                      The LGA/ABI Guidance, and the ABI Response to the Waterhouse Report, have addressed to an important degree the practical matters on which agreement between local authorities and insurers is needed to resolve the legal problems which arise in the context of local authority inquiry reports. In our provisional view they provide a good basis for developing the further statement of agreed principles we think is needed.

8.43                                      The essentials, in our view, are that agreement on the difficulties is negotiated by the local authorities and their insurers, in such a way that the resulting agreement governs the liability insurance contract between a local authority and its insurers, and that an authority knows what steps it ought to take at each stage of a local authority inquiry.

8.44                                      Whether such an agreement is cast in the form of revised joint LGA/ABI Guidance, or a Statement of Practice such as might be issued by insurers,[43] is not a matter for us: what is important is that any such agreement is observed in practice, is clear, and is known by all involved.

8.45                                      In addition to the points made in the LGA/ABI Guidance and the ABI Response, the agreement might usefully include the following.

8.46                                      Given our description of how an agreement between the local authorities and their insurers could be developed, do consultees agree that this would be the right way forward? If not, what additional points would consultees say should be included, or what alternative would consultees propose?

8.47                                      The ABI Response referred to the comment “that there should be an agreed code of practice to guide local authorities in their response to situations of [this] kind…”[44] and stated that it accepted this recommendation, and “fully supports further work towards the development of such a code”.[45] Indeed, some of the points made in the LGA/ABI Guidance, and in the ABI Response, are points one would expect to see in a code of practice. Our provisional view is that any agreement between insurers and local authorities about the interpretation of the insurance contract is best kept distinct from a code of practice on how ad hoc inquiries should be conducted. The agreement (or statement of practice) would almost certainly be connected to the code of practice, and both parties would expect authorities, and those who conduct inquiries at their request, to follow any established code of practice.

8.48                                      While we think it may not be either practicable or desirable to produce guidance which prescribes particular ways of conducting inquiries and writing reports, it is nevertheless both possible and desirable to produce guidance which alerts the authority as to the issues to be thought about, the options, and the factors to be taken into account when deciding how to progress. A Code of Practice could be issued by a body such as the LGA: a local authority could then be expected to have regard to it. On the other hand, there might be value in Government issuing it, albeit after consultation, or in conjunction with, the LGA.[46]

The underlying principles

8.49                                      A code of practice would be founded on the underlying values it seeks to promote. The Council on Tribunals identified effectiveness,[47] fairness,[48] speed and economy.[49] The SOLACE guidelines emphasised effectiveness and fairness. If the concept of fairness is developed a little, it may be seen to comprise the following elements: openness/confidentiality; procedural fairness aimed at securing substantive fairness; impartiality or independence; efficiency or timeliness; equal treatment.[50]

8.50                                      These values may translate into different practices for different kinds of inquiry. In view of that fact, and the fact that SOLACE is revising its own recommendations, as mentioned above, we doubt that it is helpful for us to rehearse in detail here all the various procedural recommendations made in relation to a variety of kinds of inquiry.

8.51                                      Various bodies have issued advice on the constitution and process of inquiries, and their objectives. It is worth referring to them here, even though they are not all aimed at exactly the kind of inquiry we have in view.

8.52                                      Following the Report of the Scott Inquiry,[51] the Council on Tribunals published advice to the Lord Chancellor on the procedural issues arising in the conduct of public inquiries set up by ministers.[52] That advice concludes that it

is wholly impracticable to attempt to devise a single set of model rules or guidance that will provide for the constitution, procedure and powers of every inquiry. Instead, the Council advise that such issues should be addressed by taking into account, for each inquiry, the objectives of effectiveness, fairness, speed and economy.[53]

8.53                                      This advice is, we note, in relation to public inquiries set up by a minister, not local authority inquiries, which may be conducted in private or in public.

8.54                                      We tend to agree that it is neither practicable nor desirable to produce guidance which prescribes particular ways of conducting inquiries and writing reports, but that it is both possible and desirable to produce guidance which alerts the authority as to the issues to be thought about, the options, and the factors to be taken into account when deciding how to progress.

8.55                                      The Davies Report[54] recommended the establishment of standing independent panels for regional health authorities, to conduct external investigations where the jurisdiction of the Health Ombudsman was not engaged, nor the matter so serious to warrant a public inquiry.[55] The independent panel would investigate on a reference from a health authority, staff or complainant, where the complaint could form the subject of legal proceedings but the complainant has no intention, to the satisfaction of the chairman, of litigating the matter.[56]

8.56                                      The proposed system of independent panels was a fundamental recommendation of the report, which also incorporated a Code of Practice to govern, in a detailed and prescriptive manner, the investigation of hospital complaints from the minor to the very serious.[57] No mention was made of how the Code of Practice should be enforced. It is unclear whether the health authority, in seeking to comply with the requirement above, would merely need to have had regard to the Code, or ensured that it was substantively followed. However, the fact that the authority had not complied with the Code might not give rise to any legal consequences. No statutory privilege, immunity or protection was to be tied to compliance with the Code.

The “Working Together” guidelines

8.57                                      The Working Together to Safeguard Children guidelines were drawn up by the Department of Health, the Home Office and the Department for Education.[58] The guidance sets out how agencies and professionals should work together to promote the welfare of children and protect them from neglect. It is aimed mainly, but not exclusively, at working under the Children Act 1989, which sets out a comprehensive framework for the care and protection of children. The current version, produced in 1999, replaces “Working Together under The Children Act 1989”, published in 1991.

8.58                                      The guidance was issued under section 7 of the Local Authority Social Services Act 1970.[59] Local authorities, according to the guidance, are to comply with its provisions unless local circumstances indicate exceptional reasons which justify a variation.[60]

8.59                                      Part 8 of Working Together provides for case reviews to be established in certain situations. A case review must be undertaken where a child dies, and abuse or neglect are known or suspected to be a factor in the death.[61] Additionally, a case review may be undertaken where a child has sustained a potentially life-threatening injury through abuse or neglect, serious sexual abuse, or sustained serious and permanent impairment of health or development through abuse or neglect, and the case gives rise to concerned about the way in which local professionals and services work together to safeguard children.[62]

8.60                                      Part 8 provides for a two-tier review process. Each relevant service that is involved with the child and the family is to conduct an individual management review.[63] The review should look at individual and organisational practice, with the aim of identifying whether change is necessary, and how those changes can be brought about.[64] The Area Child Protection Committee (ACPC) then examines all these individual reports, along with any other reports commissioned by the ACPC. The local authority takes lead responsibility for the establishment of the ACPC. An overview report is produced, which includes an action plan for the relevant agencies involved.[65] The overview report, the executive summary of the action plan and the individual management reviews are forwarded to the Department of Health.[66]

8.61                                      The Working Together guidance provides outline formats for the individual management review and the overview report.[67] Further guidance is given on disclosure of the report, or executive summaries of the report, and dealings with interested parties.[68]

SOLACE 1978

8.62                                      Another source of informed opinion on how to run an inquiry is to be found in the recommendations issued for the attention of local authorities in 1978, by a committee appointed by SOLACE and the Royal Institute of Public Administration.[69] It was appointed to study:

(a) the circumstances in which ad hoc inquiries have been held

(b) the circumstances in which they are an appropriate form of investigation,    and

(c) the procedures which should govern their establishment and conduct.[70]

8.63                                      It made a number of recommendations,[71] including (1) that a code of practice should govern the method of appointment, staffing and other related matters, and (2) various procedural rules. Those rules covered rights of hearing, rights to legal and other representation, evidence, rights of persons adversely criticised, rights of observers at private inquiries, reimbursement of witnesses’ costs, and reporting.

8.64                                      The Local Authorities Association published its own response to the SOLACE report in August 1980 in which it “fully endorse[d] the proposition that a code of practice and rules of procedure are needed.”[72] It commended its own version of a code of practice and rules of procedure to its member authorities in which they closely followed the SOLACE recommendations.[73]

8.65                                      Our understanding, however, is that the SOLACE recommendations, and the Local Authority Association recommendations of 1980, are not widely known.

8.66                                      As the Solace Review Group is in the process of drawing up guidance for local authorities and their Chief Executives on the practical issues to be faced when proposing to convene an ad hoc local inquiry or internal investigation, we confine ourselves here to setting out the headings under which we think guidance might be needed.

8.67                                      Given our description of the principles that should underlie a Code of Practice, its content, and who should issue it, what would consultees want to see in a Code of Practice for the conduct of local authority ad hoc inquiries?

8.68                                      We now turn to the possible legislative solutions in relation to the availability of the defence of qualified privilege in defamation, and canvas the possibility of a new type of statutory inquiry.