Indemnity cover

Report: 12
Date: 9 June 2003
By: Clerk

Summary

This report requests members to approve a general indemnity cover for civil staff.

A. Recommendation

That members agree the introduction of the general indemnity shown in the Appendix.

B. Supporting information

Introduction

1. Prior to the formation of the Authority in July 2000 there was a general ‘hold harmless’ indemnity provided to staff by the former Receiver which incorporated professional indemnity (PI) cover. It was intended that the transition arrangements would ensure transfer of these indemnities to the MPA. However, the previous indemnity cannot now be located and it is therefore appropriate for Members to consider formally approving a new general indemnity.

Existing Arrangements

2. In 1999 the Home Secretary approved the reimbursement of premiums paid for professional indemnity by ACPO rank officers and five named holders of senior civil staff posts.

3. In September 2001 the Human Resources Committee agreed to reimburse the insurance premiums paid for professional indemnity of Superintending ranks. While it was felt that there was scope for the Commissioner and the MPA to indemnify police officers who face legal proceedings arising from their proper actions in the course of their duty, there are circumstances when it would not be appropriate for the Commissioner to agree to legal representation, eg, an officer facing criminal proceedings arising from an operational decision. The Authority therefore agreed that the superintending ranks needed additional protection.

4. Police Notice 39/02 issued in August 2002 entitled ‘Guidance on Financial Assistance in Legal Proceedings’ has clarified the criteria regarding the provision of financial assistance to individuals. This clearly states that the Authority will support individuals in defence or settlement of any third party claim made against them resulting from any alleged wrongful act or omission on their part in connection with the performance of their official duties provided that the liability does not arise from, or in connection with, any wilful default or bad faith on their part; and they co-operate fully with those investigating the case. This assistance does not however fully cover particular situations, for example liabilities normally covered by professional indemnity insurances covering professional negligence where the Authority itself may wish to recover costs directly from employees.

Legal Advice –Proposed Indemnity

5. Bircham Dyson Bell solicitors have been appointed to provide an appropriate form of words for such an indemnity and their draft is attached at Appendix 1. It is intended that this will cover such liabilities as normally covered under professional indemnity and directors and officers’ insurances. It is applicable to all civil staff.

C. Equality and diversity implications

The adoption of this indemnity will ensure parity of treatment across staff groups who may be subject to professional indemnity claims.

D. Financial implications

Any claims made would be met from the self-funded insurance budget, subject to the layer of external insurance cover commencing at £40 million.

E. Background papers

Police Notice 39/02

F. Contact details

Report author: Ken Hunt, Deputy Treasurer, MPA.

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1

Resolution - Indemnity and Hold Harmless Agreement

1. The Authority will, so far as it may lawfully do so and subject to the exceptions set out below, indemnify and hold harmless each employee (as defined below) against any relevant liability (as defined below) arising from or as a consequence of any relevant occurrence (as defined below).

2. This indemnity will apply without limitation in time or value and, without prejudice to the generality of the foregoing, shall apply:

1. to any relevant occurrence which may have occurred before the date of this Resolution; and
2. notwithstanding that the employee shall have ceased to be an employee of the Authority.

3. This indemnity will not extend to any relevant liability to the extent that it is directly or indirectly caused by or arises from:

1. fraud, dishonesty or criminal offence on the part of the employee, except an offence under the provisions of the Health & Safety at Work Act 1974 (as modified or amended from time to time or any statutory replacement or re-enactment thereof); or
2. the wilful default or bad faith of the employee.

4. This indemnity will not apply:

1. if an employee, without the written authority of the Authority, admits liability or negotiates a settlement of any claim falling within the scope of this Resolution; or
2. to the extent that the employee is entitled to be indemnified in respect of the relevant liability and is indemnified by another party;
3. to the extent that any legal expenses are incurred without the prior written consent of the Authority.

5. The indemnity shall apply subject to the condition that if the employee receives or is entitled to receive from a third party any sum in respect of which the Authority shall have indemnified the employee the employee shall, as the case may be, reimburse the Authority the amount of such sum or take at the expense of the Authority such steps as the Authority may reasonably required to obtain payment of such sum from such third party.

6. This indemnity shall be without prejudice to:

1. the right of the Authority to take disciplinary action against an employee in respect of any relevant occurrence;
2. any power that the Authority may have to indemnify or hold harmless any employee in any other case or to any other extent.

7. In this indemnity:

1. employee means any person who is employed by the Authority under a contract of service at the time of this Resolution or who becomes so employed while the Resolution continues in force;
2. relevant liability means any expense liability loss claim damages penalty or proceedings;
3. relevant occurrence means in relation to any employee any wrongful, or negligent act, error or omission of that employee in the course of his or her employment or otherwise in or about the pursuit of his or her duties on behalf of the Authority or on behalf of any other person whilst acting within the scope of the Authority’s authority or with its consent.

Resolution of the Authority

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