Magazine article Public Finance

Councils Call for Law Change after Laml Verdict

Magazine article Public Finance

Councils Call for Law Change after Laml Verdict

Article excerpt

Local government figures have called on ministers to change the law after the Court of Appeal ruled that a group of London councils did not have the legal powers to set up an insurance mutual

In a June 9 ruling, the court found in favour of commercial insurance firm Risk Management Partners in its case against the London Borough of Brent - one of the founding members of London Authorities Mutual Limited.

It ruled that the participation of local authorities in an insurance mutual was beyond their statutory powers under the 1972 and 2000 Local Government Acts. The court also ruled that Brent had awarded its insurance contracts to Laml in breach of the 2006 Procurement Regulations.

Laml said it would cease its underwriting activities immediately and run down its work, 'pending any fresh legislation'.

The mutual's chair, Nathan Elvery, who is deputy chief executive at the London Borough of Croydon, said the outcome was 'very disappointing' for the mutual. He said it had aimed to offer savings of up to 15% on councils' insurance spend.

Elvery suggested the ruling was 'contrary to assurances we have received from central government that the wellbeing powers were sufficient for our purposes'. …

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