High Court quashes decision to refuse to pay LGO recommended compensation

A decision by Basildon District Council to refuse to pay compensation recommended by the Local Government Ombudsman was unlawful, the High Court has ruled.

In Gallagher & Anor, R (on the application of) v Basildon District Council [2010] EWHC 2824, the claimants – Paula Gallagher and Mary McCarthy – applied for judicial review after Basildon decided after reconsideration not to follow the recommendation.

The claimants are travellers who are members of a community living on an unauthorised site in the council’s area. With the planning process exhausted, the council is taking direct action to remove the travellers from the site.

During the planning process, the claimants provided personal information to the council. This included the names and ages of their children, medical details relating to the children, copies of letters to medical practitioners involved in their treatment and information relating to their education.

The information was then compiled in a report for Basildon’s development control and traffic management committee. However, the report was then published as part of the agenda for the meeting, and made available to the press and public. The information was distributed in advance of the meeting and also placed on the council’s website.

The claimants then complained to the LGO in February 2007 about the publication of this information. The LGO’s investigator found that the decision to publish the information was “not fair, reasonable or proportionate” and accused the council of administrative failings.

She also suggested that the council would have reached a more proportionate decision had it given more considered attention to Article 8 of the European Convention on Human Rights.

The investigator recommended to the LGO that there had been maladministration causing injustice, and that the council should apologise and pay the claimants £300 each by way of compensation.

Basildon did not accept the proposal but did arrange for a senior officer to send a letter of apology.

With the lack of a local settlement, the LGO published his report on 9 July 2008. This found maladministration and said much of the information was exempt information that should only have been considered in a closed session.

“The injustice suffered by the complainants was….the sense of shock and outrage they felt when they first discovered that the information had been published,” the Ombudsman said. He urged the council to reconsider its decision not to pay compensation.

Basildon’s appeals and general purposes committee considered the report in September 2008 and resolved to accept the recommendation for an apology, but again rejected the need to pay compensation.

There were no reasons given for the decision, however. The Deputy Leader was subsequently reported in the local paper as saying: “If people felt embarrassed or hurt, the council should apologise….What is done, is done. Today’s compensation culture has gone too far.”

The LGO published a further report on 12 November 2008, saying he was very disappointed with Basildon’s stance. He said in many cases “the clock cannot be turned back” and the only available approach may be financial compensation.

Basildon’s full council then passed a resolution, by a majority, saying it did not agree that a monetary award of any kind would be a fair and equitable award in this case. It also emphasised its respect for the LGO’s office.

The claimants then issued proceedings. At a second meeting on 25 June 2009, the full council meeting resolved that “having given due weight to the findings of the Ombudsman” it did not agree to pay “because it would not undo the worry and anxiety caused and because the council’s mistake was rectified immediately and the repercussions feared by the complainants did not materialise”.

A revised letter of apology was drafted but not sent until the proceedings were determined.

In the High Court Mr Justice Kenneth Parker agreed with counsel for Basildon that there was nothing in the Local Government Act 1974 that required the council to implement the LGO’s recommendations.

Parliament had “empowered the LGO to make recommendations, but did not either make such recommendations specifically binding, or alternatively expressly require that local authorities should have ‘cogent reasons’ for rejecting any recommendations, provisions that would reasonably have been expected if such had been the legislative intent”.

But the judge added that if the local authority provides reasons for rejecting the recommendation, the court is entitled to examine carefully whether the council has taken into account relevant considerations and has weighed those relevant considerations in a way that a reasonable council should have done.

Mr Justice Kenneth Parker said Basildon’s response on 25 June 2009 made no explicit reference to the council’s conduct. “The response recites, almost formulaically, that the council has had regard to the LGO, but it nowhere acknowledges that the council had been guilty of maladministration. This is not without importance”.

Those reading and interpreting the decision would want to know whether the council genuinely accepted the finding of maladministration, he said. The judge added that “this is not a case where the council can be seen to have evaluated its own maladministration and to have rationally concluded that the seriousness alone of that maladministration would not require the payment of compensation”.

Mr Justice Kenneth Parker argued that the council’s submission that the compensation would not undo the worry and anxiety caused “misses the point entirely”. “The LGO had recommended a ‘botheration’ payment in this case….precisely because the victims of the injustice caused by serious maladministration could not be restored to their original position.”

“The council simply did not ask itself the right question, namely, given the nature of the maladministration and of the injustice caused, which is duly acknowledged, is a ‘botheration’ payment (awarded where the victim cannot be restored to her original position) fair and reasonable in this case, given the amount recommended and the likely impact on local resources?”

The judge said it was not rational to accord the weight the council gave to the inability to undo the worry and anxiety caused.

He also said there was no acknowledgement that the complainants did suffer serious distress and anxiety, even if the repercussions they feared did not materialise. This was a highly relevant consideration in determining whether it was fair and reasonable to pay compensation. The council could not be seen to have evaluated the impact of the injustice or that its seriousness did not require financial compensation.

The judge highlighted the modest level of the compensation recommended, and suggested that the council had set its face against any payment. Basildon had not rationally concluded that the payment would have been a disproportionate use of public resources.

For these reasons, the challenged decision “has failed to take into account relevant considerations, or has given manifestly disproportionate weight to certain considerations, and does not show the rational quality of response that, in this particular statutory context, is required in law”.

The judge therefore allowed the claim for judicial review and quashed the decision.

Cllr Tony Ball, Leader of Basildon, said he was disappointed with the result. “I feel Basildon Council has always acted properly. We will look at this ruling and decide what course of action the council will take."