Provisional Edition

FIFTH SESSION

OPINION 9 (1998)[1]

ON

the preliminary draft recommendation

of the Committee of Ministers to member states

on the financial (civil and accounting) liability

 of local elected representatives

for acts or omissions in the course of their duties

The Congress,

            Having been asked by the Steering Committee on Local and Regional Democracy (CDLR) to submit an opinion on the preliminary draft recommendation of the Committee of Ministers to member states on the financial (civil and accounting) liability of local elected representatives for acts or omissions in the course of their duties, which is appended hereto;

            Considering that the question of financial liability is of much concern to local elected representatives at present and that the growth in the number of relevant legal texts and of proceedings involving the personal liability of elected representatives is causing real unease among local politicians;

            Given that elected representatives are called upon every day to take a large number of decisions that often require particular technical know-how, which gives an indication of the risks they incur in performing their daily duties;

            Believing also that the liability of elected representatives goes hand in hand with the powers conferred upon them by their election and which they are called upon to exercise;

            Wishing to respect the constraints of local office and management of local affairs on the one hand and the requirements of the rule of law on the other;

            Aware that the system of legal liability of local elected representatives must take full account of the legitimate interests of citizens and offer them sufficient legal certainty;

            Considering nevertheless that such a system should not result in local elected representatives being held personally liable in an unfair manner for acts or omissions in the course of their duties;

1.         Welcomes the proposal to involve local elected representatives in any discussion on reforms to be undertaken in the system of liability of local elected representatives;

2.         Adheres to the principles set out in the preliminary draft recommendation on the financial liability of local elected representatives;

3.         Stresses that the decentralisation process taking place in many member states is resulting in greater powers being transferred to the local level and, in particular, to local government and that these transfers of power tend to increase the likelihood of local elected representatives being held personally liable for acts or omissions;

4.         Believes that, in certain cases, the risks incurred by local elected representatives in terms of personal liability are disproportionate to the powers they hold;

5.         Believes also that in some countries there is a tendency towards the personal liability of elected representatives taking the place of administrative liability;

6.         Notes that, in the space of a few years, intervention by the courts in local affairs has given them a significant role at local level, imposing legal rationality based on the strict application of legislation.  Given this fact and the particular nature of local authorities’ work, the Congress supports the idea of setting up special sections within the competent civil or administrative courts and providing training for judges having to rule on cases in this area.  This would enable them to take greater account of the realities of local authorities’ work, understand the difficulties faced by local elected representatives and would lay down for them an obligation of reticence on the mediatization of affairs;

7.         Believes that the wide dissemination of appropriate information and the proper training of elected representatives with regard to the legal constraints of their work are preventive measures which could play a significant part in limiting the risk of cases of deliberate tortious intent and avoiding a good number of proceedings;

            In this connection, the Congress, given:

-           the difficulties inherent in the tasks assigned to local elected representatives by the law, although they are sometimes not trained to perform them;

-           the difficulty they have in familiarising themselves fully with the legislation they are required to apply in the face of the many duties they have to perform every day and, lastly;

            -           the need for elected representatives to have legal expertise at their disposal;

            Welcomes the proposal that governments should co-operate with local authorities to improve training for local elected representatives with regard to the system of liability applicable to them and the relevant legal texts;

8.         Points out that national governments should encourage the efforts of local authorities wishing to introduce modern systems for collecting and processing information on the statutes governing the system of liability of local elected representatives;

9.         Welcomes the fact that the guidelines appended to the preliminary draft recommendation call on member States’ governments to set up a reliable and rapid legal advice service to provide assistance to local elected representatives seeking help when in doubt as to the lawfulness of a decision they are required to take;

10.       Believes nevertheless that, although the advantages of such a service cannot be denied, it is important to clarify the recommendation and highlight the need for the advice provided by a legal service of this kind to be impartial and independent.

            It is also important to indicate the level of government at which such a service should be set up: national, local or intermediate.

            This would have the advantage of removing doubts about the possibility of central government departments exercising implicit control over local government decisions if a legal advice service was set up by central government.

11.       Believes also that a distinction must be made between local authorities which have easily mobilisable expertise, qualified staff and financial resources that enable them to employ the services of experts on the one hand, and those which do not on the other.  The latter include a large number of small municipalities and rural municipalities whose elected representatives are deprived of these possibilities.

            Given that larger local authorities usually have legal expertise at their disposal or have the financial resources necessary for retaining lawyers or other experts, the Congress believes that it would be useful to indicate that the legal advice services should be provided primarily for small municipalities.

12.       In addition, the guidelines should indicate the assistance in terms of legal advice which national associations of local authorities could provide.

            The guidelines could also mention the role which intermunicipal services could play in this area, providing they had the necessary resources.

            In both cases, central government could support and promote the development of such services within associations, which are key forums for passing on information between local authorities at national level and as part of co-operation between different authorities, especially between municipalities.

13.       The Congress believes that insurance cover could be an effective means of reducing the consequences of the risks of elected representatives being held personally liable in connection with unlawful acts or omissions on their part.

            States should therefore encourage local authorities to insure against the risks.  They should also encourage the establishment of standard insurance policies to cover elected representatives against certain risks.

            It would perhaps be useful to indicate that legal advice and/or legal aid insurance policies for elected representatives covering all or part of legal costs, which are often high, are particularly useful and should thus receive particular attention from governments.

14.       The CLRAE therefore recommends that the CDLR take account of the following amendments when finalising the draft recommendation and, in particular, the guidelines appended thereto:

i.                    The Congress proposes to add a new paragraph to the Preamble after the paragraph f.:

Considering that mediation, as a means of settling disputes, may in a certain number of cases, avoid the recourse to legal proceedings, give satisfactory answers to citizens and facilitate relations between citizens and local and regional institutions and that, in this perspective, certain towns and regions have set up Mediators/Ombudsmen Offices allowing citizens easy access for controlling the efficiency and legality of administrative activities.

ii.         With regard to the person’s right to sue and right to compensation the CLRAE suggests to read the first phrase of the Part I of the guidelines, section The injured person’s right to sue and right to compensation as follows:

“Anyone who believes that he or she has suffered prejudice as result of an unlawful act or omission by a local elected representative should first of all sue for damages against the local authority in question.”

iii.        with regard to the proceedings that can be taken by persons who believe they have suffered prejudice as a result of an unlawful act or omission by a local elected representative, and in order not to exempt elected representatives from all liability, it is proposed that the phrase “either excluded or” should be deleted from the second sentence of the first paragraph of the section on “The injured person’s right to sue and right to compensation” in Part I;

iv.        with regard to the proceedings that can be taken by persons who believe they have suffered prejudice as a result of an unlawful act or omission by a local elected representative it is suggested also to add in the last sentence of the second paragraph of the section The injured person's right to sue and right to compensation: “…and therefore should depend on the liability of the local authority under the management of the local elected representative”.

v.         concerning the individual liability for collective decisions the CLRAE suggests to read the section Individual liability for collective decisions as follow: “In the case of unlawful decisions taken by a collegiate body elected representatives having formally opposed or abstained from these decisions should not, in general, be held personally liable”.

vi.        with regard to the preliminary opinions from independent specialist bodies it is suggested to add to the last sentence of the section Preliminary opinion from independent specialist bodies the following : “and which elected representatives could have consulted beforehand”.

vii.       with regard to the measures aimed at limiting the risk of cases of deliberate tortuous intent, it is proposed that the first paragraph of the section on “Informing and training local elected representatives” in Part II of the guidelines should be worded as follows:

“National governments should encourage and support financially or by any other appropriate means initiatives by local authorities aimed at establishing modern systems for the collection, organisation, analysis and processing of information concerning statutes and other prescriptive texts governing local authorities”;

viii.      with regard to the training of local elected representatives the Congress also suggests to add to the end of the section on “Informing and training local elected representatives” a new paragraph worded as follows:

"National governments should also encourage and support by all appropriate means steps taken by national associations of local authorities to improve training for local elected representatives with regard to the system of liability applicable to them and the relevant legal texts".

ix.        also with regard to the measures aimed at limiting the risk of cases of deliberate tortuous intent, the Congress proposes adding the following paragraph to the section on “Legal advice service for local elected representatives” in Part II of the guidelines:

“Central government should encourage and support by all appropriate means steps taken by national associations of local authorities to set up legal advice services for local elected representatives who wish to seek legal advice before taking decisions. Such legal advice services could also be provided in the context of co-operation between different authorities, with the support of central government if necessary”.

Appendix

the preliminary draft recommendation

of the Committee of Ministers to member states

on the financial (civil and accounting) liability

 of local elected representatives

for acts or omissions in the course of their duties

            The Committee of Ministers, under the terms of Article 15.b of the Statute of the Council of Europe,

a.         Considering that the aim of the Council of Europe is to achieve a greater unity between its members for the purpose of safeguarding and realising the ideals and principles which are their common heritage and facilitating their economic and social progress;

b.         Considering that active participation by citizens in the management of local public affairs, inter alia by taking on local elective functions, is a prerequisite for effective local democracy and that, in order to ensure such participation, it is essential to safeguard, at the same time, citizens’ confidence in their elected representatives and the legal certainty for the latter;

c.         Considering that the system of legal liability of local elected representatives consequently has a particular influence on the smooth operation of local and regional democracy;

d.         Considering that, when establishing such a system, account must be taken at the same time of the legitimate interests of citizens, of the State, of the different territorial authorities and of elected representatives;

e.         Considering that local elected representatives must be fully accountable to citizens and that the current trend towards the accountability of local elected representatives is an important aspect of more effective local democracy;

f.          Considering, nonetheless, that this trend raises legitimate concerns on the part of local elected representatives and that the adoption of specific provisions concerning their financial liability may be justified in view of their increasingly complex duties and their elective status;

g.         Having regard to the report of the Steering Committee on Local and Regional Democracy (CDLR) on “The liability of local elected representatives for acts or omissions in the course of their duties”;

            Recommends that the governments of the member states:

1.         to undertake the appropriate reforms of the legal and administrative framework for the financial liability of local elected representatives, taking into account the principles and the proposal set out in the guidelines appended to this recommendation;

2.         involve local elected representatives in any discussion on reforms to be undertaken in this area and on the procedure for implementing such reforms.

Appendix to Recommendation No.

Guidelines concerning the financial (civil and accounting) liability of local elected representatives for acts or omissions in the course of their duties

Definitions

            This recommendation adopts the following definitions:

-           civil liability: the obligation to make good the loss resulting from non-fulfilment or poor fulfilment of a contract, or from a breach of the general duty not to cause harm to others through one’s own actions, objects in one’s keeping or persons for whom one is responsible;

-           accounting liability: the obligation on public officials, including elected representatives, to make good any financial loss caused to their community;

-           local elected representatives: those holding a direct or indirect electoral mandate within local authority assemblies (including those at intermediate level) or within their executive organs.

I.          Scope and application of the financial liability of local authorities and local elected representatives

The injured person’s right to sue and right to compensation

            Anyone who believes that he or she has suffered prejudice as a result of an unlawful act or omission by a local elected representative should always have the right to sue for damages against the local authority in question.  However, direct action against local elected representatives should be either excluded or confined to cases of serious negligence or deliberate tortuous intent on their part.

            Anyone having suffered unlawful prejudice as the result of an act or omission by a local elected representative must be entitled to full and rapid compensation.  Such compensation should not be dependent on a finding of misconduct or negligence on the part of the local elected representative responsible.

The authority's right to sue the elected representative responsible

            The authority must have the right to bring court proceedings for compensation against the local elected representative responsible for loss sustained as a result of an unlawful act or omission; it must have the right to bring recourse proceedings against the elected representative responsible where it has had to pay for damages caused to a third party.

            Nonetheless, elected representatives’ liability to their local authorities should be confined to cases of serious negligence or deliberate tortuous intent.  Where no such restriction is laid down by law, the authority should be able to choose not to exercise its right to sue, for example in the event of slight negligence, or where the good faith of the elected representatives concerned is not at issue and where, having regard to the circumstances, the latter have exercised care and attention.

Individual liability for collective decisions

            In the case of unlawful decisions taken by a collegiate body, the personal liability of elected representatives who opposed those decisions should generally be excluded.

Pecuniary administrative sanctions

            The application of any kind of automatic pecuniary sanction mechanism to elected representatives should be excluded; such sanctions should only be imposed following an adversarial hearing and the finding of serious negligence or deliberate tortious intent.

Judicial specialisation

           

            In view of the increasing complexity and technicality of the activities carried out by local authorities and the specific nature of the work of local elected representatives, it would be appropriate to set up special sections, within the civil or administrative courts, competent to deal with the financial liability of elected representatives, and specific training should be provided for judges having to rule on such cases.

Preliminary opinions from independent specialist bodies

            An alternative or adjunct to judicial specialisation might be to set up independent specialist bodies whose opinion should or could be sought by judges before ruling on the appropriateness or otherwise of the conduct of the elected representatives concerned and of the impugned decisions at issue.

II.        Measures to reduce the risk of unintentional fault

Simplifying the body of regulations

            Wherever possible, the number of laws, regulations and other rules that local elected representatives are required to apply, particularly ministerial decrees and circulars, should be reduced; the legislation in force in local authorities’ main spheres of activity should be presented as consolidated legislation.

Informing and training local elected representatives

            National governments should encourage and support local authorities wishing to introduce modern systems for the collection, organisation and processing of information concerning statutes and other prescriptive texts.

            They should co-operate with local authorities to improve training for local elected representatives, particularly with a view to familiarising those representatives with the legal texts they have to apply and the rules governing their liability in the event of infringement of these texts.

Legal advice service for local elected representatives

            Government authorities should set up a reliable, rapid legal advice service to provide assistance to local elected representatives seeking help when in doubt as to the lawfulness of a decision they are required to take.

Internal legal controls

            Provision should be made to allow local authorities to organise internal legal control mechanisms, encourage their actual implementation and evaluate their performance at regular intervals so that, where necessary, measures can be taken to make them more effective.

III.       Financial liability insurance for illegal acts or omissions by local elected representatives

Insurance for local authorities

            Explicit provision should be made to allow local authorities to take out civil liability insurance covering financial risks.  Such insurance might help to limit the number of recourse actions brought by authorities against their elected representatives where the latter have acted in good faith.

Insurance for elected representatives

            Explicit provision should be made to allow local authorities to take out pecuniary liability insurance on behalf of their elected representatives for acts performed in the course of their duties, namely in cases of slight and unintentional negligence.

Mutual insurance

            Explicit provision should be made to allow local authorities or their elected representatives to set up mutual insurance bodies to cover the risks mentioned above.  Central government authorities could also encourage the setting up of such bodies by all appropriate means.

Collection and disclosure of the information needed in order to quantify insurance risks

            A coherent system should be set up at national level for the collection and disclosure of information concerning local authorities’ civil liability and local elected representatives’ civil and accounting liability, so as to enable elected representatives and insurers better to quantify such risks.