01.10.13
Council acted ‘unlawfully’ by indemnifying its chief executive in libel case
A ruling by the Wales Audit Office that a county council acted illegally by indemnifying its chief executive in a libel action involving a blogger could have wider ramifications.
Investigate reporter David Hencke, formerly the Guardian’s Westminster correspondent, said the audit office’s decision will “send shivers down the spines of senior council staff thinking of using taxpayer’s money to silence bloggers”.
Blogger Jacqui Thompson made corruption allegations against Carmathenshire County Council, which led to a libel case, due to go to appeal. A High Court judge said she had run an “unlawful campaign of harassment, defamation and intimidation” against senior council officials, ordering her in June to pay £25,000 damages to the chief executive, Mark James, on top of the £230,000 in legal costs accumulated by the council.
The council had pledged to cover James’ court costs, but the Wales Audit Office has now said that decision was unlawful.
Anthony Barnett, the Wales Audit Office auditor, says in his draft report says “I draw attention to the matters disclosed in note 6.50 to the accounts in relation to…£23,217 of expenditure incurred in granting an indemnity to the Chief Executive to bring a libel counter-claim against a claimant. These transactions are considered to be unlawful.”
A council spokesman said: “Regarding the issue of the indemnity to an officer of the council to take action for libel, we would like to make it clear that we consulted the Wales Audit Office prior to the decision being taken in January 2012 and that it has taken almost two years for these concerns to have been expressed. We have discussed the matter with them on several occasions and in August of 2012 they indicated, in response to questions from a third party, that they agreed that the council had the legal powers to grant the indemnity. It is disappointing that they have now expressed a different view so late in the day, and too late for the council to act upon it.”
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