Appointing Authorised Officers — To indemnify or not to indemnify?

LG Leader April 2020

We are often asked the question as to whether or not it is appropriate for a council to include an indemnity clause in instruments of appointment issued for authorised officers. We understand that the template forms used by councils include an indemnity provision, which is for the purposes of indemnifying the appointee in respect of any liability arising in connection with the exercise of the appointee’s powers and functions conferred by the instrument.

Our advice is:

• an indemnity is not required if the person appointed as an authorised officer is an employee of the council (which is usually the case). In these circumstances, the appointee has the benefit of the protection from liability afforded by subsection 121 of the Local Government Act 1999 (which provides that no civil liability attaches to an employee of a council for an honest act or omission in the exercise, performance or discharge, or purported exercise, performance or discharge, of powers, functions or duties under any Act); and
• if the individual appointed is not an employee of the council and is, for example, a contractor, then the provision of an indemnity in the instrument of appointment is at the council’s discretion. In our experience, appointments in these circumstances are usually made where the council has entered into a service agreement with the individual which addresses liability arising in connection with the work undertaken pursuant to the service contract. In this case, the council can rely on the contract and need not include a specific indemnity clause in its instrument of appointment.