Cheltenham Borough Council v Laird

This is a novel case.

An employer sues a former employee for damages for making fraudulent or negligent misrepresentations in a job application.

The particular part of the application involved in the present case was the medical questionnaire, but it could as well have been the application form or a CV. It might also have been the reference provided, and indeed the action originally included Rhondda Cynon Taff County Borough Council (“RCT”) as Second Defendant in respect of the reference they had given. That claim was compromised before trial.

In many cases material representations made in a job application form will induce the contract of employment made and yet it appears that there is no precedent for an action for damages such as that brought in these proceedings. The likely reason is that in most such cases there will be no damages. The appropriate remedy will be rescission and termination of the contract of employment.

In the present case the contract of employment has already been terminated and the sole remedy claimed is damages. The salary paid to the employee is not claimed, no doubt because even if the contract of employment had not been made with her it would have been made with someone else and the same salary would have been paid. It is nevertheless claimed that in the unusual circumstances of the present case substantial damages of nearly £1 million have been suffered.

The basis of that claim is that as a consequence of the employment of the First Defendant, Mrs Laird, the Claimant Council (“CBC”) incurred extraordinary expenses that would not have been incurred had some other managing director been employed.

As a consequence of differences which arose between Mrs Laird and the leader of the council, Cllr McKinlay, and other members and officers, much time and expense was spent by CBC in dealing with the resulting disputes which arose rather than the normal running of CBC business. These included Joint Negotiating Committee (“JNC”) disciplinary proceedings brought against Mrs Laird and grievance and court proceedings brought by Mrs Laird, as well as a complaint made by her to the Standards Board of England (“SBE”). Outside support had to be brought in to help CBC staff deal with these disputes and to support them. Mrs Laird was off sick for substantial periods, was then suspended and ultimately retired on an ill health pension. CBC claim as damages the time and costs of dealing with these various disputes and their consequences as well as the ill health element of the pension paid. They are encouraged in bringing these claims by the causation rules in respect of claims in deceit and, on present authority, in respect of claims under section 2(1) of the Misrepresentation Act 1967.

Mrs Laird not only denies liability but disputes every element of the damages claimed. In essence she alleges that all the disputes and ensuing problems which arose during her employment were caused by CBC’s own breaches of duty or fault. She also seeks to set off against the claim made her own claim for damages for stress and ill health. She also seeks to bring into account benefits which she says accrued to CBC only as a result of CBC employing her when it did.

“Cheltenham lies at the edge of the Cotswolds and is renowned for its gracious Regency architecture reflecting the Spa’ town’s rich heritage, mixing readily with the cosmopolitan atmosphere of a fashionable and thriving centre for commerce, education and the arts”. So read the opening words of the Introduction to Cheltenham in the Recruitment information issued by CBC for the post of managing director in early November 2001.

One of the applicants for the post so advertised was Mrs Laird. At the time she was Group Director of Community Services at RCT, having previously worked as Chief Executive at the Chartered Institute of Housing (“CIH”), and as Director of Housing and Environmental Services at Derby City Council, among other posts during a working career of some 28 years.

Following receipt and review of her application form and the taking up of references Mrs Laird was invited to interview. From 2 to 4 January 2002 she attended interviews which included a session before the council. She made the final shortlist of three and was eventually chosen as the preferred candidate by a council vote of 18:17. Following the vote she was offered the job.

On 7 January 2002 CBC wrote to Mrs Laird “to confirm the Council’s offer to you of the appointment ...”. The offer was stated to be “conditional upon medical clearance being obtained from our Medical Adviser”.

On 8 January 2002 Mrs Laird completed a medical questionnaire, which she sent to Gloucestershire County Occupational Health Services (“GCOHS”). It did not mention any history of depression, stress related illness, or any anti-depressant medication.

On 9 January 2002 Mrs Laird replied to CBC’s letter saying she was “pleased to accept the post of Managing Director on the terms and conditions outlined in your letter” and that she had “returned the medical questionnaire, as requested, to the Council’s Medical Adviser”. On 10 January 2002, GCOHS’s representative signed a form, which was sent to the council, stating that “[b]ased on the information given on the health questionnaire, the applicant has been found to be ... fit”.

On 14 January 2002 CBC wrote to Mrs Laird informing her that the medical clearance certificate had been received and that “we can now proceed with your appointment”, and giving a start date of 4 February 2002. There followed various delays in the production and agreement of the detailed terms of Mr Laird contract and the contract, which was dated 2 August 2002, was not in fact signed until early September 2002.

At the time of Mrs Laird’s appointment CBC had a Conservative majority and its leader, Cllr Duncan Smith, had played a prominent role in her appointment. There was planned to be a restructuring of the council and the new managing director was meant to play a major role in this. Indeed, Mrs Laird immediately started the process of planning and making organisational changes, a process which involved changing roles and titles, as well as a number of voluntary redundancies. On 2 May 2002 there were local elections which saw the Conservatives ousted as the majority party and replaced by the Liberal Democrats. The new leader of the Cabinet was the Liberal Democrat Cllr McKinlay. The leading Liberal Democrats were less enthusiastic supporters of the restructuring plans, and had reservations as to how it should be carried out.

From the outset Mrs Laird and Cllr McKinlay found it difficult to work with each other and an atmosphere of mutual distrust developed. During the following months tensions and disputes arose between them and also between Mrs Laird and certain other members and officers of CBC.

On 23 April 2003 Mrs Laird informed CBC’s then monitoring officer, Mr Ford that she intended to complain to the SBE about the conduct of the leader, Cllr McKinlay. On 24 April 2003 Cllr McKinlay wrote to Mr Ford setting out concerns about Mrs Laird’s conduct which he wanted investigated.

Mrs Laird’s complaint to the SBE dated 25 April was directed against three Liberal Democrat councillors including Cllr McKinlay. On 30 April 2003 three opposition councillors made further allegations to the SBE concernng members of the cabinet. From 8 May 2003 onwards, solicitors acting for Mrs Laird corresponded with (and subsequently litigated against) CBC in relation to her employment position.

On 16 October 2003 Mrs Laird lodged a written grievance with the council comprising a narrative followed by six numbered complaints. On 27 October 2003 the council resolved to set up a panel of seven councillors (“the JNC Panel”) to undertake preliminary consideration of disciplinary allegations made by Cllr McKinlay against Mrs Laird, and report back. On 11 November 2003 two grievances from other staff against Mrs Laird were lodged with the then assistant director of human resources.

Mrs Laird’s grievance was heard over four days from 13 November to 2 December 2003. Solicitors and a barrister were involved at the hearings. On 18 December 2003 the committee hearing the grievance issued its report. Of the six complaints, three were dismissed; one (concerning annual appraisal) was upheld in part; and two were adjourned on the ground that they overlapped with the complaint to the SBE and/or possible defamation proceedings.

On 25 May 2004 the JNC Panel reported back to the full council, recommending that a statutory designated independent person (“DIP”) be appointed to consider five allegations against Mrs Laird. The five allegations, and numbered factual particulars supporting each allegation, were set out in the body of the report. On 3 June 2004 the council resolved to approve the recommendations of the JNC Panel.

After an unsuccessful attempt by Mrs Laird to obtain a High Court injunction in Bristol to prevent the appointment of a DIP and to prevent her suspension the council resolved to suspend Mrs Laird on full pay and to appoint a DIP.

On 4 November 2004 Steven Kingston, the Ethical Standards Officer (“ESO”) responsible for reporting on the complaints to the SBE, produced his report effectively dismissing all the complaints.

In late 2004 and early 2005 the DIP attempted to start his investigation but Mrs Laird’s ill health hindered this. At the direction of the DIP, Dr Aylard, a consultant psychiatrist then jointly instructed by the council and Mrs Laird, interviewed Mrs Laird on 13 April 2005 and reported in writing on 4 May 2005 that Mrs Laird was unfit to undergo the DIP investigation.

Dr Aylard’s report included quoted extracts from Mrs Laird’s general practitioner records which included details of the anti-depressant medication (Seroxat, Lofepramine and Dothiepin) Mrs Laird had taken since 1997.

The DIP determined on 4 August 2005 that he could not continue his investigation. By letter dated 9 August 2005 the council notified Mrs Laird’s solicitors that it regarded her contract of employment as frustrated by the confirmation from the DIP that there was no reasonable prospect of the substantive investigation into the disciplinary allegations against Mrs Laird ever taking place or being concluded.

On 6 September 2005 Mrs Laird made an application to CBC for immediate payment of ill health retirement benefits. After considering medical evidence and taking legal advice CBC decided that Mrs Laird was entitled on the ground of permanent incapacity to an immediate ill health pension under the statutory scheme. Her pension was released to her on 30 March 2006, backdated to 10 August 2005.

On 12 June 2006 CBC applied for third party Norwich Pharmacal disclosure against Gloucestershire Partnership NHS Trust, of which GCOHS forms a part. CBC also applied for pre-action disclosure against Mrs Laird, which she unsuccessfully opposed. After a hearing on 21 July 2006 the judge made the order sought.

Through compliance with that order, on or about 31 August 2006 CBC obtained a copy of Mrs Laird’s pre-employment medical questionnaire and discovered that it contained no mention of depression, depressive illness, stress related illness, or any anti-depressant medication.

On 26 October 2006 the employment tribunal at Bristol dismissed a claim which Mrs Laird had brought and subsequently withdrawn, for unfair dismissal, payment of pension contributions and compensation for disability discrimination.

The present proceedings were brought, alleging negligence only, not fraud, by a claim form dated 9 May 2007. Following directions given by HHJ Seymour QC at the pre-trial review on 5 December 2008, CBC issued a second claim for fraudulent misrepresentation, which HHJ Seymour QC had ordered be consolidated with the existing claim.

I have appended to the judgment a list of the various abbreviations used in this judgment and a dramatis personae.

In order to understand the context and detail of many of the disputes which arose during Mrs Laird’s time at CBC it is necessary to have an appreciation of the statutory background.

The conduct of elected members of a local authority is regulated by Part III of the Local Government Act 2000 (“the 2000 Act”) and regulations. Section 57 created the SBE. Section 58 (but now section 57A) gives any person the right to complain of a breach of the statutory code of conduct (“the Code of Conduct”) which all local authorities must adopt and all elected members must sign as a condition of taking office.

The SBE may, inter alia, refer a complaint of breach of the Code of Conduct to an ESO under section 58(1)(a), for investigation. Under section 59, after investigating the ESO may decide that there has been no breach of the Code of Conduct; or that there has been a breach but no action need be taken; or may refer the matter to the authority’s monitoring officer; or may refer the matter for adjudication by a tribunal.

In the most serious cases referred to an independent case tribunal, that tribunal may impose various sanctions including requiring a written apology, requiring the councillor to undergo training, or disqualifying a councillor from holding office for up to five years.

A holder of a “politically restricted post” may not become a member of a local authority: Local Government and Housing Act 1989 (“the 1989 Act”) section 1 (unless granted a special exemption under what is now section 3A). Those disqualified from being local authority members include the head of paid service, the monitoring officer and the statutory chief officers (section 2).

By section 4 of the 1989 Act a local authority must designate one of their officers as “the head of their paid service” and must provide that officer with such staff, accommodation and other resources as are, in his or her opinion, sufficient to allow his or her duties under section 4 to be performed. The head of paid service is the statutory term for the person who is usually known as the authority’s chief executive or managing director – in this case Mrs Laird.

Under section 4 of the 1989 Act the head of paid service must report to the authority in writing setting out his or her proposals on the manner in which the discharge by the authority of its different functions should be co-ordinated; the number and grades of staff required by the authority for the discharge of its functions; the organisation of the authority's staff; and the appointment and proper management of the authority's staff.

By section 5 of the 1989 Act the authority must designate one of its officers as the “monitoring officer” who may not (in the case of most councils, including CBC) be the head of paid service. The monitoring officer is charged, under sections 5 and 5A, with the statutory duty to ensure that the authority and its executive comply with the law, and to report contraventions of legal obligations or cases he considers to be maladministration. The monitoring officer at CBC at the material time was Mr Ford.

By section 151 of the Local Government Act 1972 “... every local authority shall make arrangements for the proper administration of their financial affairs and shall secure that one of their officers has responsibility for the administration of those affairs.” This is the statutory chief finance officer, commonly known as “the section 151 officer” or more colloquially, “the 151”. The monitoring officer at CBC at the material time was Mr David Perry.

Under the Local Authorities (Standing Orders) (England) Regulations 2001 (SI 2001/3384) (“the 2001 Regulations”) the power to approve the appointment or dismissal of the head of paid service must be exercised by the authority itself (regulation 5). Under regulation 7, where a question of discipline arises in relation to the head of paid service, monitoring officer or chief finance officer, the authority must appoint a DIP (either by agreement or in default of agreement, nominated by the Secretary of State) to investigate and report on whether any disciplinary action should be taken. In this case the DIP was Mr Adrian Lynch QC.

The DIP has various powers including that of continuing any temporary suspension of the relevant officer. The authority’s powers are correspondingly circumscribed. In particular, it may not suspend the relevant officer for more than two months without a direction from the DIP (schedule 3, para 3 and regulation 7(3)); and it may not dismiss the officer or take any other disciplinary action except in accordance with a recommendation from a DIP made in a report under regulation 7.

A head of paid service (since 1993) and (since 7 November 2001) a monitoring officer and statutory chief finance officer, are therefore given statutory protection against dismissal. The purpose is, manifestly, to protect them against dismissal by elected members for political reasons, or where the officer’s duty to uphold the law and act properly requires him or her to confront elected members. In practice, the likelihood of dismissal is much diminished by these provisions and the likelihood of a departure on agreed terms much increased.

Under the former Local Government Pension Scheme Regulations 1997 (SI 1997/1612), as amended (“the 1997 Regulations”), detailed provision was made in relation to the pensions of local government employees. The 1997 Regulations were replaced with effect from 1 April 2008 with other regulations, without major changes to the substance of the law. The 1997 Regulations governed local authority officers’ pensions during the material period.

Regulation 27(1) of the 1997 Regulations provided that where

The preconditions of the entitlement of Mrs Laird to an ill health pension and grant at the material time were therefore: (i) that she must leave a local government employment; (ii) that it must be more likely than not that she will be incapable until her 65^th birthday of discharging efficiently the duties of her (or comparable) employment; and (iii) that she must leave a local government employment by reason of that incapacity.

Mrs Laird’s contract of employment incorporated, with some modifications, the JNC terms and conditions. The most relevant provision for present purposes is clause 16 which deals with “Procedures for Redundancy, Capability and Discipline”. It provides as follows:

the joint secretaries of the Joint Negotiating Committee.

If at any stage it is felt appropriate, the chief executive may (subject to whatever consultation or approval may be required under the authority’s standing orders) be suspended from duty by the council or appropriate committee or sub-committee acting under delegated powers on full pay pending further investigation. Written notice stating the reasons for any such suspension shall be given. The suspension may be for a maximum of two months only and shall be subject to any direction of the independent person, appointed under paragraph 16.15, who may direct the authority to terminate the suspension, to continue it, or to vary the terms upon which it has taken place.

If the authority wishes to extend the period of suspension beyond two months this must be approved b y the independent person.

It is the duty of the independent person appointed in accordance with the 1993 Regulations to prepare a report. The report will be produced following a comprehensive investigation into any allegations. The chief executive should be given not less that ten working days notice of the commencement of the investigation and should at the same time be given full details of the allegations made against him/her. Within that time the chief executive has the right to request:-

further details of the allegations made and

a postponement of the investigation for a period to be agreed between the parties, or in default of agreement, for a period not exceeding 14 days.

In order to ensure all the relevant factors are considered the independent person shall, at his or her discretion, have power at any stage in the proceedings at which he/she considers appropriate:

to direct that no further steps (whether by the authority or any committee, sub-committee or officer of theirs) should be taken in respect of their disciplinary action proposed or contemplated;

to direct that any suspension shall end, and the chief executive shall be reinstated;

to direct that no steps towards disciplinary action or further disciplinary action against the chief executive, other than steps taken in the presence or with the agreement of the independent person, are to be taken before a report is made in accordance with paragraph 12.21 below:

to inspect any relevant documents in the possession, or under the control, of the authority, and any other documents which any person is prepared to show to him/her;

to require any employee of the authority to answer questions concerning the conduct of the chief executive providing that if any such employee has not been called to give evidence the person presenting the complaint on behalf of the authority and the chief executive (or his/her representative) may question the employee (in an appropriate forum) on the answers given to the independent person.

The report of the independent person shall be presented to the council or the appropriate committee of the council acting under delegated powers and shall:

state his/her opinion as to whether (and if so the extent to which) the evidence he/she has obtained supports any allegations of misconduct against the chief executive;

recommend the disciplinary action (if any) or range of actions which appear to him/her appropriate for the authority to take against the chief executive. The appropriate course of action will be drawn from the following list:

recorded oral warning

written warning

suspension on half pay or no pay for a specified period

relegation (i.e. a reduction in salary) for a specified period

an invitation to resign or accept retirement

dismissal with notice

Alternatively the independent person may recommend that the parties explore other alternatives, e.g.

early retirement

secondment

The independent person shall at the same time send a copy of his report to the chief executive.

Before the council or appropriate committee as the case may be considers the report or the recommendations of the independent person the chief executive or his or her representative has the right to address the council or committee, but, unless the council or committee consents, has no right to call witnesses.”

The parties were largely agreed as to the essential issues to be determined which can be summarised as follows:

How the Court should approach the construction of the wording of the medical questionnaire and was it seeking only statements of subjective and honestly held belief?;

Whether the representations made by Mrs Laird in answering the medical questionnaire (“the Representations”) were false;

If false, whether Mrs Laird honestly believed the Representations to be true;

If false, whether the Representations were made (i) fraudulently (in the sense articulated in the authorities on the tort of deceit), (ii) negligently (at common law), and/or (iii) without reasonable grounds for belief in their truth, for the purposes of section 2(1) of the Misrepresentation Act 1967;

Whether CBC’s remedy for any alleged misrepresentation was restricted to terminating Mrs Laird’s employment, rather than suing for damages;

Whether the Representations were made to CBC for the purposes of the Misrepresentation Act 1967 (“the 1967 Act”), section 2(1);

Whether CBC relied on the Representations and/or was induced by them to enter into the Employment Contract;

If no misrepresentation had been made and Mrs Laird had disclosed her full medical history, whether CBC would have been in breach of duty under the Disability Discrimination Act 1995 (“the DDA”) had it refused to employ her;

Whether CBC and/or GCOHS unreasonably failed to seek details of Mrs Laird’s medical history from her GP, and, if so, with what consequence, if any.

Mounting and failing to protect Mrs Laird against (and investigate) a campaign of alleged harassment; and seeking to have her employment end; and otherwise failing to protect her health;

Failing to engage in mediation/conciliation with Mrs Laird;

Failing to have and then to implement properly and fairly and with the correct results a Grievance Procedure;

Bringing and launching allegedly unfounded (and whether in fact and/or in law, and including as to whether or not, if made out, they would have justified dismissal or other disciplinary action) allegations and a disciplinary process (under “the JNC Procedure”) against Mrs Laird, and then running the JNC Procedure in an allegedly biased and unfair manner, and with it reaching allegedly wrong and unfounded conclusions;

Suspending Mrs Laird;

Unlawfully searching and taking material from Mrs Laird’s private possessions;

Delaying and refusing to accept Mrs Laird’s application to retire on grounds of ill-health, and then her ill-health pension;

Bringing this Claim.

Remoteness and legal causation/scope of the duty/tort;

Duty to act reasonably in mitigation;

Entitlement to recovery of the costs of the grievance and JNC procedures; the reasonableness and justification of them;

Entitlement to recovery of the costs of the ill-health pension and the basis for calculating such loss (and including if and to what extent any transfer value from Mrs Laird’s previous entitlements should be taken into account);

Whether Mrs Laird can rely on alleged financial benefits to CBC deriving from her employment in relation to (i) the Local Authority Social Housing Grant (“LASHG”), (ii) Arms Length Management Organisation (“ALMO”) funding, (iii) savings from restructuring, (iv) the “Save a Pound scheme, (v) Car Parking charges, and/or (vi) the Brewery Development, and, if so, whether CBC would have been (and to what extent) better or worse off financially had it not employed Mrs Laird and instead (and if so when) employed someone different.

Before considering the individual issues to be determined it is necessary to place them in context by setting out some of the history of Mrs Laird’s employment and making various findings in relation thereto.

The full history of Mrs Laird’s employment would fill many volumes. Aspects of it are already covered in a 36 page Grievance Panel report and a 144 page SBE report. At the trial I heard evidence from 30 witnesses of fact whose witness statements ran to some 650 pages. I shall here set out the most salient features of that history only. Certain aspects of the history will be further addressed in relation to the individual issues.

In 2001 CBC had a Conservative administration led by Cllr Duncan Smith. In the light of the 2000 Act various changes to the running of CBC were made in autumn 2001. These included replacement of government by individual committees with government by a central cabinet headed by a leader, the cabinet being made up of representatives of the majority party.

It was planned that these changes should be followed by a major restructuring of CBC. Central to the restructuring plan was the appointment of a new managing director who was going to formulate and implement the intended changes.

The task of handling the recruitment process for the managing director was given to the Structural Review Committee (“the SRC”), headed by Cllr Duncan Smith. They appointed the South West Provincial Employers, which is associated with the South West Regional Assembly (“SWRA”), to provide human resources advice and assist it in the administration of the recruitment process.

In early November 2001 CBC advertised for the post of managing director, its most senior officer, and head of paid service for the purposes of section 4 of the 1989 Act. The advertisement stated, inter alia, that CBC was “seeking a high calibre manager with proven experience of step change to work with the Council to change the structure and culture of the organisation” and that the successful candidate would be “a natural leader with the ability to inspire a dedicated team of professionals”.

CBC supplied prospective candidates with an application pack which included: Recruitment information for the post of Managing Director, a Job Description, a Personnel Specification Form, and a Job Application Form.

The Job Description included the following statements in relation to the job’s requirements:

The Personnel Specification included the following statements as to the personal qualities required:

Mrs Laird was supplied with an application pack. On 6 December 2001 Mrs Laird sent to SWRA a completed Job Application Form dated 29 November 2001 (“the Application Form”), a supporting statement, and a covering letter.

Mrs Laird’s application was reviewed, references were taken up and she made it through to the shortlist of candidates. In early January 2002 she was invited to Cheltenham for interview. The timetable for the interview process was managed by SWRA, and in particular its chief executive, Ms Bryony Houlden.

Interviews took place between 2 and 4 January 2002. On the evening of 2 January 2002 a buffet supper was held at which the six remaining candidates were given the opportunity to talk to members of the council. Each of the candidates circulated round the various tables, giving them the chance to meet and discuss issues with different members.

On the morning of 3 January 2002 Mrs Laird made a presentation to the SRC, followed by an interview. Later in the afternoon she met with Ms Houlden and was told she was in the final three. During that discussion she raised with Ms Houlden the fact that the recruitment pack referred to the appointment being on NJC terms and conditions, whereas chief executives were meant to be appointed on JNC terms and conditions for CEOs. Ms Houlden expressed surprise at this and agreed with Mrs Laird that JNC terms and conditions were more apposite.

On the morning of 4 January 2002 Mrs Laird had a meeting with Cllr Duncan Smith at which the need for change at CBC and the fact that it might prove unpopular was discussed.

A little while later Mrs Laird was informed by Ms Houlden that a problem had arisen with her application in connection with the circumstances of her departure from the CIH. The reference provided by the chief executive of Derby City Council had said that “Her departure from the Institute was well chronicled at the time. Don’t be put off by that particular episode”. The SRC had asked Ms Houlden to look into this and she had spoken to a local government contact who had told her that there had been serious personality clashes between Mrs Laird and the CIH Board.

Mrs Laird explained that she had been dismissed from the CIH after she had raised issues concerning members approving substantial projects without proper authorisations. She said that the fact that the CIH recognised they were in the wrong was reflected in the Compromise Agreement reached which involved a substantial payment being made to her. The SRC asked to see a copy of the Compromise Agreement. Mrs Laird agreed to this, provided that it was returned since it was meant to be confidential. The SRC were apparently satisfied with the explanations given.

That afternoon Mrs Laird and the other two remaining candidates made a presentation to and were asked questions by the council. Mrs Laird assumed that the full council was present, although in fact six of the forty one councillors were absent. There is nothing unusual about this, especially given that the meeting was being held over the holiday period.

The council vote came down to a straight race between Mrs Laird and Mrs Isobel Garner, the other candidate being eliminated in the first round of voting. The vote ended in favour of Mrs Laird by a majority of one vote, the voting being 18:17. There was then a resolution passed that Mrs Laird be offered the job, and, if she did not accept, that it be offered to Mrs Garner.

Following the council meeting Mrs Laird and the other candidates were rung by Ms Houlden and Mrs Laird was told she was being offered the job. She was asked to come to CBC’s offices to discuss terms.

Back at CBC’s offices Mrs Laird was met by Cllr Duncan Smith and Ms Houlden who offered their congratulations. There was then a discussion about salary levels and it was eventually agreed that Mrs Laird would be appointed on a salary of £75,000 which would increase to £79,000 subject to the satisfactory completion of specific objectives to be agreed. There was also a discussion about the giving of notice to her present employers with Cllr Duncan Smith expressing the desire for a reduced period to be agreed so that she could start as soon as possible.

There was no discussion at this stage of all the elements of the financial package, such as leave entitlement or car allowances, although relocation costs of up to £7,500 were agreed. Nor was there any discussion of the detailed terms of the contract. Ms Houlden told Mrs Laird that she would need to contact Mr Ford to discuss finalisation of all the details of the offer and Cllr Duncan Smith said words to similar effect.

Following this discussion Mrs Laird shook hands with Ms Houlden and Cllr Duncan Smith, at which stage Ms Houlden left. An agreement in principle had been reached and it was assumed by all that the required formalities would be sorted out satisfactorily.

The terms of a press release were then discussed and agreed between Mrs Laird, CBC’s press officer, Miss Katherine Gunn, and Cllr Duncan Smith. Mrs Laird then went to Cllr Duncan Smith’s office where they had a discussion of the changes that might be made to CBC and savings that could be achieved. Cllr Duncan Smith explained that there was some urgency about this as the CBC budget was due to be considered in February 2002 and was currently adrift from target by about £250,000. There was a discussion about staffing savings and Cllr Duncan Smith said that documentation would be sent over to Mrs Laird so that she could begin thinking about such issues. She was also asked to return to CBC on 9 January 2002 to spend the day there.

On 7 January 2002 a press release was issued. It stated that Mrs Laird had been appointed as the new managing director “subject to medical and reference formalities”. On the same day Mr Perry sent Mrs Laird various documents relating to the budget proposals and Mr Ford wrote to Mrs Laird “to confirm the Council’s offer to you of the appointment of Managing Director”. The letter further stated that the offer was “conditional upon medical clearance being obtained from our Medical Adviser” and asked Mrs Laird to complete the enclosed medical questionnaire.

On 8 January 2002 Mrs Laird completed the medical questionnaire, which she sent to GCOHS, as requested.

On 9 January 2002 Mrs Laird spent the day at CBC where she met various officers, including the departing chief executive, Mr Lawrence Davison.

On the same day she replied to Mr Ford’s letter saying she was “pleased to accept the post of Managing Director on the terms and conditions outlined in your letter” and that she had “returned the medical questionnaire, as requested, to the Council’s Medical Adviser”.

On 10 January 2002, GCOHS’s representative signed a form, which was sent to the council, stating that “[b]ased on the information given on the health questionnaire, the applicant has been found to be ... fit”.

On 14 January 2002 CBC wrote to Mrs Laird informing her that the medical clearance certificate had been received and that “we can now proceed with your appointment”, and giving a start date of 4 February 2002. On the same day Mrs Laird gave formal notice to RCT.

Prior to her start date, Mrs Laird made a further visit to CBC and did a considerable amount of work on the budget and on her restructuring proposals, but she did not formally start working at CBC until 4 February 2002.

Mrs Laird presented her plans for phase 1 of the restructuring process at a council meeting on 15 February 2002. Those plans involved reducing the number of directors from five to four, and replacing the heads of service with a considerably smaller number of assistant directors, whose responsibilities would be structured on a themed basis. The council approved the plans for phase 1, and delegated the task of approval of the plans for phase 2 to the SRC.

Cllr Duncan Smith, the leader of the Conservative administration, had played a major role in the appointment of Mrs Laird. They enjoyed a close working relationship and a shared desire to achieve the restructuring agenda which had been outlined at the time of Mrs Laird’s appointment, an agenda which she firmly believed in.

In May 2002 control of CBC changed to the Liberal Democrats, led by Cllr McKinlay. A change in political control is a commonplace in local government and should not give rise to undue difficulties, but in this case it did. For her part, Mrs Laird was saddened that she would no longer be working alongside Cllr Duncan Smith pursuing their shared agenda and was keen to carry on with that agenda so far as she could. On the Liberal Democrat side, there was from the outset a degree of wariness of Mrs Laird given her close working relationship with the previous administration.

The first intimation of the difficulties which lay ahead occurred even before the elections. On or about 25 February 2002, at a time when Cllr McKinlay either had been or was about to be made leader of the Liberal Democrats, he visited Mrs Laird together with Cllr Stuart-Smith. The purpose of the visit was to raise certain concerns that the Liberal Democrat group had in relation to the restructuring plan, bearing in mind that they considered it a real possibility that they would become the majority party following the upcoming elections. Although the Liberal Democrats were not opposed to restructuring, they did have concerns about how it was to be implemented. Specifically they had concerns about regeneration, which had long been an important issue for the Liberal Democrats. There had previously been a regeneration department and it was unclear how that area of work was to be covered under any restructuring. They wanted these concerns to be take into account in the proposals to be made for the implementation of the restructuring since they wanted to avoid being in the position of seeking to reverse what had just been done, should they take control of the council. Should that happen then they would wish to review the implementation of the restructuring proposals and in the meantime they did not want anything irreversible done.

At the meeting the councillors raised these concerns. Mrs Laird interpreted these concerns as being indicative of opposition to the restructuring plan generally and an inappropriate attempt to interfere in decisions already taken by council. Her response was in effect to tell the councillors that this was none of their business. The plan had been decided upon by the council and it was her job to implement council decisions. She made it clear that no councillor had the authority to countermand, amend or ignore a resolution of the council.

Cllr McKinlay was exasperated at this response to the concerns which they had been seeking to raise and may have become angry, but I do not accept that he behaved in an intimidating manner, as Mrs Laird alleges. Whilst it may be that Mrs Laird felt threatened by the difficult position in which she felt that Cllr McKinlay was putting her, I do not accept that she was threatened. It was a frustrating meeting which left both parties annoyed with each other, but no more than that.

There was a further meeting between the same parties on 2 April 2002 at which Cllrs McKinlay and Stuart-Smith made a further attempt to make Mrs Laird take on board their concerns, but with no more success than at the first meeting. At one stage Cllrs McKinlay and Stuart Smith left the room to discuss whether it was worth continuing with the meeting given the lack of progress they seemed to be making. I do not accept Mrs Laird’s evidence that this occurred at the first meeting, nor that they left the room to calm Cllr McKinlay down because he had become so angry. He was more exasperated than angry and although he may have expressed his frustration at the lack of progress being made, I am satisfied that he did not do so in an inappropriate or intimidating manner.

On 2 May 2002 the elections took place and the Liberal Democrats became the controlling party. The following morning Cllr McKinlay visited the offices as the new leader and looked in on Mrs Laird. He says that Mr Ford was present in her office at the time. This was denied by Mrs Laird and I accept that there was a meeting between Mrs Laird and Cllr McKinlay alone that day. At that meeting there was a discussion about the new cabinet and the restructuring was again talked about. Mrs Laird made it clear that she would strongly resist any changes to her report on restructuring and said that, as head of paid service, the responsibility for the report was hers alone. Cllr McKinlay made clear in a firm manner his disagreement with the suggestion that the restructuring proposals were solely her province and said that things would be different now that there was a new administration.

At the time of the meeting Mrs Laird was tired and distressed. She had been up most of the night dealing with the election and she was disappointed that she was no longer going to be working alongside Cllr Duncan Smith and the Conservatives. This may have caused her to be more upset by the meeting than was warranted. Firm disagreement had been expressed by Mr McKinlay but not in an aggressive or intimidating way.

Over time the importance and the upset caused by the meeting appears to have assumed greater significance in the mind of Mrs Laird. She produced a handwritten note of the meeting which was typed up in November 2002. I do not accept that it was contemporaneous and find that it was written up shortly before the typed up file note was made, by which time her relationship with Cllr McKinlay had significantly deteriorated. The note and Mrs Laird’s evidence was to the effect that at the meeting Mr McKinlay had accused her of being a “Tory nark” and said that he did not trust her and did not feel obliged to honour her appointment. Whilst it is probably true that Mr McKinlay regarded Mrs Laird as being too closely associated with the Conservatives and he may well have indicated this at the meeting, I do not accept that he used these words.

This meeting, together with the two earlier unproductive meetings which had taken place, meant that from the start the relationship between Mrs Laird and Cllr McKinlay was difficult and beset with mutual wariness. Matters were not helped by the outcome of the first council meeting held by the new administration on 10 May 2002. By the time of the meeting the structure of the new administration had not been decided upon and the opposition made life difficult for Cllr McKinlay by asking questions which suggested that he had no clear grasp of matters. They forced him to withdraw the nomination of Cllr Lloyd as a cabinet because he was also Mayor. They then asked him a question which he asked Mrs Laird to respond to, but she said she could not do so without breaching political neutrality rules, leaving Cllr McKinlay open to opposition taunts of being unable to answer questions without assistance. Rightly or wrongly, he felt let down by Mrs Laird both in terms of preparation for the meeting and in the conduct of the meeting, and the Liberal Democrats’ displeasure was made clear to Mrs Laird by Cllr Stuart-Smith in robust terms after the meeting.

Meanwhile, rumours were circulating that Mrs Laird would not be staying in her post. The editor of the local paper, the Gloucestershire Echo (“the Echo”) approached Mrs Laird about this and there was a proposal that a joint press statement be issued by all four Group Leaders dispelling these rumours. Cllr McKinlay did not agree to do so as he thought it might simply make matters worse, but Mrs Laird interpreted this as demonstrating a lack of support.

There were also reports coming back to Cllr McKinlay of Mrs Laird being rude about the competence of the new administration and stating to officers that the divisions amongst the Liberal Democrats meant that it should effectively be regarded as a “hung council”.

Further, in relation to restructuring there continued to be disagreements. Mrs Laird was adamant that none of the approved proposals should be changed and took the stance that this was a staffing matter which was her responsibility as head of paid service, rather than that of the cabinet. The relative roles and responsibilities of the managing director and the cabinet were therefore also in issue.

Even before the end of the first month of the new administration the collision course between Mrs Laird and the Cllr McKinlay and the new administration was clearly set and mutual wariness was fast turning into mutual antipathy and distrust.

In a later reported conversation in August 2003, Cllr McKinlay was noted as saying in relation to Mrs Laird that: “She thinks she can take on the world. She always thinks she is right, which from my point of view is sodding infuriating”. Mrs Laird is a perfectionist who insists that things are done in a certain way. In her approach and manner she can appear inflexible, superior and dismissive of others. She regarded Cllr McKinlay and the new Liberal Democrat administration as being inexperienced and not very competent and she was somewhat contemptuous in some of her dealings with them. I have no doubt that this did “infuriate” Cllr McKinlay, who possesses a fairly short fuse and was inclined to distrust and dislike Mrs Laird from the beginning. This made for an increasingly combustible relationship.

On 6 June 2002 there was a meeting between Mrs Laird and Cllr Jordan representing the Liberal Democrat group in order to discuss restructuring issues. Mrs Laird claimed that during this meeting Cllr Jordan said that as he had not been involved in her appointment he did not feel able to support it and that he shared Cllr McKinlay’s views about her. This is similar to the comments previously attributed to Cllr McKinlay which I do not accept were made and I am not satisfied that they were made on this occasion either.

In June 2002 a further issue arose which was to be a further catalyst in the deteriorating relationship between Mrs Laird and Cllr McKinlay. This concerned Mr John Webster, who was a council official who had recently agreed to take early retirement. On 15 June 2002 he wrote to Cllr McKinlay making various allegations against Mrs Laird. In particular he alleged that Mrs Laird had claimed that he had leaked information to the press about CBC’s restructuring proposals and that she knew this because his phone had been “bugged”.

Cllr McKinlay considered that Mr Ford should be instructed to investigate the allegations made and so informed Mrs Laird. She took umbrage at this suggestion. Her view was that there was nothing to the allegations and that Mr Webster, as a former employee who had signed a compromise agreement with CBC, had no right to have complaints internally investigated. She also regarded Mr Webster as being a friend of Cllr McKinlay as well as a fellow Liberal Democrat, and that accordingly Cllr McKinlay should not have been dealing with the matter. As she said, the meeting “did not end amicably”.

On 26 June 2002 a letter was received from Unison on behalf of their union members expressing concerns about the restructuring and the climate of “fear and uncertainty” it had allegedly created. There followed a meeting at the beginning of July 2002 between Mrs Laird and Cllrs McKinlay and Stuart-Smith at which this letter and the restructuring were discussed. At the meeting Mrs Laird was instructed not to go ahead with the restructuring for the moment and to address the management issues raised. If she did so then Cllr McKinlay would send a memo to senior staff saying that the cabinet supported her.

Mrs Laird claimed that at this meeting Cllrs McKinlay and Stuart-Smith told her that she should think very carefully about her position, which she interpreted as an attempt to force her to resign. This was denied by Cllr McKinlay who said that it was Mrs Laird who asked whether she needed to consider her position to which they replied that she did not. Indeed it was his evidence that this was a positive meeting that cleared the air and led to an improvement in relations. I am not satisfied that Cllrs McKinlay and Stuart-Smith made comments in the terms alleged. However, it is correct that no written memo of support was sent round despite the agreement to do so, although I accept that a statement of support was made orally by Cllr McKinlay at a meeting with heads of service a few days later.

Mrs Laird was away on holiday from 12 August to 2 September 2002 and shortly after her return she had an interim performance appraisal at which a pay rise was agreed with Mrs Laird agreeing to undergo personal skills training. Cllr McKinlay was a member of the appraisal panel.

Shortly thereafter issues concerning Mr Webster’s complaint were to flare up and cause a significant further deterioration in relations. Whilst Mrs Laird had been on holiday Mr Webster had written another letter of complaint to the effect that he had been unaware at the time of the compromise agreement that there were outstanding disciplinary matters concerning him. He requested that SWRA investigate the matter, ensure that correct procedures were carried out, identify any allegations made against him and prepare a statement of what had happened. Having consulted Mrs Pitman, Cllr McKinlay had written back agreeing to do so.

When Mrs Laird heard this she became extremely angry and upset. She understood this to relate to the original complaint made involving allegations against her which was being investigated by Mr Ford. She regarded any attempt to involve outside bodies in such an investigation as unconstitutional and unjustified. She severely reprimanded Ms Pitman in relation to what had been done and then forcefully repeated her concerns at a meeting with Cllr McKinlay on 16 September 2002. She accused him of a range of breaches of the Code of Conduct.

On the following day there was a further meeting between them. In her own words she told him that “in advancing his friend’s complaint so resolutely it was impossible not to question his motives for doing so or to believe he was not abusing his position” – a serious allegation. Mr McKinlay’s evidence, which I accept, was that she threatened him with the SBE and legal action and even mentioned the possibility of imprisonment.

It is clear that at these meetings Mrs Laird was angry and threatening towards Cllr McKinlay – in colloquial terms she “lost it”. In her mind the reference of Mr Webster’s complaint to the SWRA was all part of a plan on Cllr McKinlay’s part to undermine her and favour his friend and this made her furious. However, in truth this was an over reaction on Mrs Laird’s part. The original complaint was being investigated by Mr Ford and indeed he reported on 16 September 2002 effectively dismissing the complaint. The request to involve the SWRA arose out of a further complaint which had been made by Mr Webster that did not involve allegations being made against Mrs Laird personally. The SWRA were not being asked to go over exactly the same ground as Mr Ford. The upshot of these two heated and confrontational meetings was an almost complete breakdown in their relationship. As Mr McKinlay put it, “it is from this point on that my relationship with Mrs Laird deteriorated markedly”.

Further disagreements emerged at a council meeting on 30 September 2002. At the meeting Mr McKinlay claimed that there had been an increase in staff departures and sickness absences in the last year and asserted that this was due to the restructuring initiated by Mrs Laird. Mrs Laird then produced statistics which did not support this claim. After the meeting Mr McKinlay berated Mrs Laird for having contradicted him during a council meeting and shouted at her.

On 6 November 2002 there was a meeting between Mrs Laird and Cllr Hay, the only female cabinet member, at which the issues between Mrs Laird and Cllr McKinlay were discussed. This led to an arrangement whereby it was agreed that there would be regular Friday meetings between Mrs Laird and Cllr McKinlay to discuss CBC business and also a face to face meeting to discuss their difficulties.

Prior to the face to face meeting Mr McKinlay took advice from Ms Houlden of SWRA and was told to be open minded and honest. In following this advice at the meeting Mr McKinlay told Mrs Laird that he often felt physically sick as a result of the stress she put him under. This was interpreted by Mrs Laird as a statement that the sight of her made him sick – i.e. as an insult rather than a statement of fact. This interpretation was later repeated by Mrs Laird to a number of staff and opposition councillors as an example of his abusive behaviour. The clear the air meeting therefore ended up making matters still worse.

Towards the end of 2002 and in early 2003 rumours started circulating that the cabinet was seeking advice as to how to terminate Mrs Laird’s employment. There was some substance to these rumours as the cabinet had consulted Ms Houlden as to what the options were in the light of the apparent breakdown in the relationship between Mrs Laird and Cllr McKinlay. Her advice was that there should be a private conversation between Mrs Laird and Cllr McKinlay about how they saw the future. If it was the view of the leader and cabinet that current arrangements were not working then that should be made clear to Mrs Laird and she should be asked for her views as to how it might be resolved. If there was agreement that the problems were insoluble then there could be a mutually agreed parting of company. If her view was that the problems were soluble, but they disagreed, then they could pursue a disciplinary action against her if they had evidence of misconduct. Alternatively they could consider a restructuring which meant that the post of managing director was no longer needed. This advice over the telephone was followed up by a meeting between Ms Houlden and various Liberal Democrats including Cllr McKinlay at Cllr Hay’s house on 5 February 2003 at which the various options were further discussed.

One possibility which was considered at around this time was for Cllr McKinlay to step down as leader. This, however, was rejected by the cabinet who indicated that they shared a number of the leader’s concerns about Mrs Laird and thought that he should stay in place.

Meanwhile differences and disagreements between Cllr McKinlay and Mrs Laird continued. Each would interpret the other’s statements and actions in a suspicious light and assume a hidden agenda. There were disagreements about Mrs Laird’s role in relation to a major local development scheme; about the performance of Mr Ford and what should be done about it; about the preparation of the budget, and various other issues.

An example of the degree of mutual distrust that had been reached is provided by a questionnaire which had been sent out to members relating to staffing of committees in February 2003. Cllr McKinlay was angered by what he saw as the slanted nature of the questionnaire and commented as follows in an email sent to other members of the Liberal Democrat group:

In fact the questionnaire had been prepared by Mr Ford whilst Mrs Laird was away on sick leave and so, whatever the merits or demerits of the questionnaire, Cllr McKinlay was wrong to assume that it was down to Mrs Laird.

The result of the discussions between the cabinet and SWRA was that it was decided to approach Mrs Laird to see if there was any room for an agreed parting of ways. The job of approaching Mrs Laird was deputed to Cllr Stuart-Smith who visited Mrs Laird on the afternoon of 5 March 2002.

The plan had been to have an off the record conversation but it does not appear to have been handled very well by Cllr Stuart-Smith. Instead of agreeing at the outset that it was to be an off the record meeting he did not raise this until the end, when he said that the meeting should not be discussed and that he would deny that it had taken place. Further, his opening gambit had been to ask Mrs Laird “what would it take for you to go?” This was repeated later in the conversation to which Mrs Laird replied that it would be more than CBC could afford and that if she had to put a figure on the cost it would be £1 million.

Mrs Laird was clearly shocked at this turn of events and regarded it as being an attempt to dismiss her. However, I accept that it was meant to be only an informal, exploratory discussion, although this should have been agreed before anything was said and the discussion could and should have been handled more adroitly by Cllr Stuart-Smith.

On 7 March 2003 Mrs Laird wrote to Mr Ford in relation to the approach which had been made to her, alleging that she had been constructively dismissed and demanding that he address the issue in his statutory capacity as monitoring officer.

On 10 March 2003 Mrs Laird informed the other three directors about what had happened. On 13 March 2003 Cllr McKinlay wrote to her in the following terms:

Stop making these unsubstantiated comments or

Make a formal complaint against me, so that my name can be cleared by an independent investigation.

On 17 March 2003 Mrs Laird replied to Cllr McKinlay’s letter refuting his claims. On 19 March 2003 Mrs Laird met with the opposition leaders and told them of her concerns and her belief that she had been bullied by Cllr McKinlay. Despite Cllr Godwin and Mrs Laird’s evidence to the contrary, I do not accept that Cllr McKinlay was invited to this meeting. Indeed, it would have made little sense for him to be invited given that the purpose of the meeting was for Mrs Laird to air her concerns about him. However, after this meeting with Mrs Laird the opposition leaders sought an urgent meeting with Cllr McKinlay, to which he refused to agree.

Mrs Laird had meanwhile involved her union, ALACE, and Mr Richard Penn of the union had sought a meeting with the cabinet to discuss the issues raised. The meeting took place on 25 March 2003 but at Mrs Laird’s request it was attended by representatives of the cabinet rather than the entire cabinet; in the event Cllrs Hay and Fidgeon. At the meeting they claimed that she was difficult to work with and was disliked by staff.

On 31 March 2003 there was an article in the Echo stating that a “massive rift” had erupted between Mrs Laird and Cllr McKinlay, that trust had completely broken down, and that they will only communicate by letter or if a third party is present. This was one of a number of articles appearing in the Echo during this period which was obviously based on leaked CBC information.

During early April 2003 a further dispute blew up between Mrs Laird and Cllr McKinlay regarding a report to council concerning a LAHSG grant.

Mrs Laird had had this report amended partly to reflect legal implications raised by Mr Ford and partly to cover her own position, as in order to secure the grant she had made the decision to proceed to exchange of contracts in relation to a property before all the usual steps were in place. She had therefore asked for the words “who exercised the necessary powers on the council’s behalf” to be added in relation to her. Cllr McKinlay interpreted this as being an attempt to enhance her role and he also considered that Mrs Laird had sought to mislead as to the need for the matter to be brought to council’s attention by means of a report. In relation to this latter point, I find that Cllr McKinlay’s concern was understandable in the light of the contemporaneous documents but was not in fact correct. Cllr McKinlay then asked for the report to be withdrawn as it was in his name, but Mrs Laird nevertheless circulated it.

This episode provides an illustration of both parties being at fault, refusing to back down, and building up an incident out of all proportion. In particular, Cllr McKinlay was at fault for reading too much into the amendments made by Mrs Laird to the report and interpreting it as unjustified self promotion; whilst Mrs Laird was at fault for failing to follow Cllr McKinlay’s ultimate instructions in relation to a report that was in his name.

On 15 April 2003 ALACE received a letter from SWRA advising that Cllr McKinlay intended instituting disciplinary proceedings against Mrs Laird unless “mutual resolution” could be agreed. There had and continued to be discussions between Mr Penn of ALACE and Mr Richard Payne of SWRA to see whether a resolution was possible. On 17 April 2003 Cllr McKinlay was advised by Mr Payne that Mr Penn had contacted him to say that Mrs Laird might be interested in an offer. Cllr McKinlay instructed him to find out what figure she was interested in and there was a discussion between them as to what figure might be appropriate, the suggestion being 2/3 of Mrs Laird’s salary. Cllr McKinlay also said that if any offer was to be accepted it would be best if Mrs Laird left straight away.

There then followed a discussion between Mr Payne and Mr Penn. Mr Payne’s instructions were to discuss the parameters of what offer might be acceptable rather than to make a formal offer, but the figure of £63,000 was mentioned by him as well as the intention that she should leave straight away should any offer be accepted. This was interpreted by Mr Penn to be an offer and this was relayed back to Mrs Laird on 19 April as an offer of £63,000 to leave immediately and not return to work the following Tuesday.

As the managing director is a council appointment Mrs Laird considered that any such offer made on the instructions of the cabinet to be unlawful and she reported what had happened to opposition leaders and formally to the monitoring officer, Mr Ford. However, in fact no formal offer had been made. In the context of ongoing negotiations a proposal had been put forward, but that had been subject to approval by others, and specifically the District Auditor, the section 151 officer and the monitoring officer.

On 22 April 2003 Cllr McKinlay emailed Mr Ford raising complaints against Mrs Laird and requesting that a JNC Panel be established. On 24 April 2003 he made a formal request by letter and he wrote to Mrs Laird the same day informing her that he was so doing. In his letter to Mr Ford Cllr McKinlay summarised his complaints as being that “Mrs Laird had intentionally mis-informed me as Leader of the Council and Cabinet colleagues” and that she been “intentionally seeking to undermine position of myself as Leader, other Cabinet members, and indeed Officers”.

By letter dated 23 April 2003 Mrs Laird informed Mr Ford that she would be making a formal complaint to the SBE. She summarised her concerns as follows:

Failure to treat people with respect, including attempts to prevent those who work for the Authority from being unbiased.

Damaging the reputation of the Office of Leader and potentially the Council as a whole.

Using the position of Leader improperly to someone’s disadvantage.

Misusing the Authority’s resources.”

On 28 April 2003 the leaders of the opposition made a complaint to the SBE complaining of the cabinet’s conduct, principally in relation to the “offer” made to Mrs Laird and the cabinet’s involvement in staffing matters.

Following Cllr McKinlay’s formal request Mr Ford took steps to set up a JNC Panel and on 28 April 2003 invited Mrs Laird’s comments on the composition of any such panel. Mrs Laird’s position was that the JNC Panel could only be appointed by the full council rather than the leader. This continued to be a major bone of contention. Mr Ford took counsel’s advice which supported his position, whilst Mrs Laird took advice from Wragge’s and Berwin Leighton Paisner to contrary effect. Eventually at the end of June 2003 counsel changed his advice and it was accepted that the JNC Panel would need to be appointed by the council. A meeting to consider doing so was called for 28 July 2003.

Another bone of contention during this period was the lack of information provided to Mrs Laird about the nature of Cllr McKinlay’s complaints. In his letter to Mr Ford of 24 April 2003 Cllr McKinlay had summarised his complaints, but he had asked Mr Ford to keep the allegations confidential and Mr Ford had acted accordingly.

Mrs Laird not surprisingly wanted to know the details of the allegations being made and this was the subject of frequent requests to Mr Ford. Mr Ford was eventually advised by counsel that the “gist” of the complaints should be made known to Mrs Laird. Cllr McKinlay was so informed and on 18 July 2003 he wrote a letter which stated as follows:

This was a very generalised “gist” and Mr Ford told Cllr McKinlay that he did not think it was sufficiently detailed. Eventually on the day of the council meeting of 28 July 2003 a more detailed document was provided by Cllr McKinlay, setting out his main concerns.

Meanwhile, on 24 July 2003 Mrs Laird’s union wrote to all councillors complaining that it was still not known, despite repeated requests, what the substance of the allegations being made actually were, four months after they had first been raised.

On the same day Berwin Leighton Paisner wrote threatening legal action if the proposal to appoint a JNC Panel was adopted. The letter also raised allegations of sex discrimination, victimisation and harassment, breach of the Public Interest Disclosure Act 1998 and constructive dismissal and highlighted that there was no cap on compensation.

In the light of Berwin Leighton Paisner’s letter, and the late production of more detailed complaints by Cllr McKinlay, it was resolved that it would not be possible to proceed with the resolution to appoint the JNC panel. Trenchant criticism was made by a number of opposition councillors of the late provision of detail of the complaints made against Mrs Laird and of this treatment of her.

Further, shortly before the meeting anonymous letters had been placed in every councillor’s post tray concerning Mrs Laird. The letter drew attention to the alleged circumstances in which Mrs Laird had left the CIH. As soon as this was brought to the attention of Mrs Laird efforts were made to retrieve any still unopened letters.

The strain of recent weeks and of the events of 28 July 2003 had meanwhile taken their toll on Mrs Laird and she suffered a break down. Her GP advised that she was suffering from acute anxiety and depression and insisted that she be signed off work immediately.

Mrs Laird returned to work briefly on 30 July 2003 to brief her fellow directors on what needed to be done in her absence. She was distressed to discover that the contents of the anonymous letters had been circulated by email to every councillor via an email address called “Daphne – Townsend @ excite.com”.

Mrs Laird then went to the police to raise her concerns about the anonymous letters, the emails and her conviction that her computer was being accessed without her consent. The matter was then handed over to the SBE who advised that it fell within their jurisdiction.

Meanwhile on 4 August 2003 a long discussion took place at CBC’s offices between Cllr McKinlay and Ms Marie Fallon, Group Director for Environment and acting managing director in the absence of Mrs Laird. The conversation covered a number of CBC matters including Mrs Laird and Cllr McKinlay’s relationship with her. During the course of the conversation Cllr McKinlay was rung on his mobile phone. He sought to reject the call as he did not want to be interrupted and put his phone back in his pocket. Unfortunately it appears that he had in fact answered the call and so the phone remained on. On the other end of the line was a reporter from the local paper, the Echo, who listened in and made a transcript of much of the ensuing conversation.

When it was learned what had happened Wiggin & Co were instructed by CBC and they wrote to the Echo seeking to prevent publication of any details of the conversation. This was unsuccessful and on 8 August 2003 an article appeared under the heading “Breaking point – Leader says he and the MD can’t go on – and the council is grinding to a halt”. An edited transcript of the overheard conversation was set out. It included the following statements by Cllr McKinlay (certain other comments were edited out):

The edited out comments included the following:

Mrs Laird was warned by the editor of the Echo shortly before the article was published but was understandably distressed by it. The article was syndicated nationally and Mrs Laird was pressed by reporters asking for her comments.

Shortly thereafter CBC hired Mr Patrick Brady to assist them on a consultancy basis. Mr Brady was a former solicitor who had been Chief Executive, head of paid service and monitoring officer at High Peak Borough Council. He was brought in to assist Mr Ford, although Mrs Laird interpreted his appointment as being made in order to help get rid of her. At this stage CBC also started seeking advice from Mr Timothy Kerr QC.

It had been agreed that Mrs Laird be given the opportunity to have an input in the instructions to be provided to Mr Kerr QC, although she complained that insufficient time for this had been given to her for this purpose and that the existing instructions were partial. For this she blamed Mr Brady and from that time on she believed that he was biased against her. This snap judgment was unfair on Mr Brady, but reflected the fact that Mrs Laird’s state of mind by this time was such that she would readily assume people were working against her. In fact, Mr Brady carried out his task in an even handed manner, although over time he formed an unfavourable view of Mrs Laird, as is reflected in some of his contemporaneous messages and indeed the intemperate terms of passages in his witness statement, as was acknowledged by him in evidence.

Following the receipt of Mr Kerr QC’s advice in late September 2003 Cllr McKinlay and five other councillors wrote to the Mayor requesting an extraordinary meeting to consider Cllr McKinlay’s complaint against Mrs Laird and the establishment of a JNC panel. On the same day Mr Ford wrote to Davies and Partners informing them of the meeting. Davies and Partners were now acting for Mrs Laird personally and had asked Mr Ford to correspond with them rather than Mrs Laird directly. They had also written a number of aggressive letters to CBC, threatening claims and making criticisms of Mr Ford’s performance of his duties as monitoring officer.

Mrs Laird returned from a holiday on 10 October 2003 and learned of the extraordinary meeting which had been called by reading about it in the press, notwithstanding that she had understood from her union representative that a “truce” had been called which meant that no meeting would be called while she was away. She also learned that one of the issues raised in Mr Kerr QC’s advice was possible termination of Mrs Laird’s employment due to medical incapacity. She had also received a letter from Mr Huckle asking her to direct requests made by her whilst off sick for information or work from staff through him, as these requests were causing difficulties and disruption. However, she interpreted this as an attempt to cut her off from council activity. The combination of these matters caused her to become very distressed and to suffer a severe panic attack that led to her being taken to hospital.

Deciding that attack was the best means of defence, Mrs Laird then resolved to submit her own grievances against Cllr McKinlay and other Liberal Democrat councillors and to seek to have this determined before Cllr McKinlay’s complaint was to be considered. On 15 October 2003 the opposition leaders advised the Mayor that they required an extraordinary council meeting to hear Mrs Laird’s grievances on 23 October 2003. On 16 October 2003 Mrs Laird served a grievance setting out six complaints against Cllr McKinlay. Some of the complaints involved other Liberal Democrat councillors, namely Cllrs Thornton, Fidgeon, Hay, Stuart-Smith, Surgenor, Lloyd, Jordan and Franklin. In summary, Mrs Laird’s complaints were as follows:

There had been a breach of implied duty of trust and confidence by leader and members of cabinet;

There had been a failure of the leader to comply with the contractual requirement to offer and undertake an annual appraisal for Mrs Laird;

There had been an attempt to terminate Mrs Laird’s employment without the lawful consent of the council;

Mrs Laird had been repeatedly defamed and undermined by the leader;

There had been a failure of the leader and cabinet to comply with Mrs Laird’s contractual rights in respect of the JNC procedure or to follow internal management practices when pursuing complaints about her; and

In convening the meeting of the 27 October 2003 the leader and others failed to have regard to Mrs Laird’s privacy and health and acted in a way that caused distress and harm (“Grievances 1 to 6”).

For the purpose of the 23 October 2003 meeting, Mr Ford had prepared a report about Mrs Laird’s grievance. He recommended that the grievance be received and arrangements made to deal with it. The report contained one inaccuracy regarding the involvement of the Joint Secretaries which was an error. Mr Ford explained in an addendum about the inaccuracy and that it did not affect the substance of his recommendations.

On 22 October 2003 Mrs Laird sent an email to a number of people, including the Mayor, Mr Ford, Ms Pitman, Mr Perry and the group leaders, making reference to the lack of “truthfulness” shown by Mr Ford’s error, to CBC’s “risk exposure” and to members’ potential personal liability.

On 23 October 2003 Mrs Laird circulated what she called “A Grievance Matter – Erratum Notification to Council” to the monitoring officer’s report under cover of a letter to all councillors. Although recognising at the start of the covering letter that she had a personal interest in the matter, Mrs Laird later stated that she was writing the letter as head of paid service and sought the exclusion of Mr Ford and Mr Brady from the meeting.

The 23 October 2003 meeting proved to be a highly charged and upsetting event for many concerned. Since Mrs Laird was officially still off sick, and the meeting was being held to hear her own complaint, Mr Huckle considered that he should assist the Mayor in chairing the meeting. Mrs Laird, however, insisted that she should sit in her usual place and objected to the presence of Mr Huckle, who eventually sat at the back of the room. As stated above, Mr Ford had prepared a report for the meeting as monitoring officer but was aggrieved to find that Mrs Laird had amended his report, purporting to do so as head of paid service. He regarded this as undermining his position, especially as the amended document had been circulated by letter to all members. She was also overbearing towards him at the meeting and, through her solicitor, alleged that he had been partial and that Mr Brady, having worked closely with Mr Ford, might also be “tagged with bias”.

The end result of the meeting was that it was resolved that a panel of members be appointed to hear Mrs Laird’s grievances. Following the meeting, Mrs Laird’s husband, Mr Hugh Laird, sent an email to Mrs Becky Robinson of Mrs Laird’s secretariat in the following terms:

On 27 October 2003 the extraordinary council meeting was heard to consider Cllr McKinlay’s complaint. It was resolved that a disciplinary matter had been raised and that a politically balanced JNC Panel be appointed to conduct a preliminary investigation into Cllr McKinlay’s complaints and to report back to council with its findings. The panel was to consist of Cllrs Seacome (Conservative), Jones, Britter and Ledeux (Liberal Democrat) and Cllr Mrs Hale (Labour).

There was an issue as to whether Mrs Laird attended the CBC offices on that day. In a statement made to the JNC panel Mr Grahame Lewis said that he had been told by Mr Michael Redman that he had met her in the basement corridor of CBC’s offices around midday on 27 October when she had told him that the council meeting that day would not take place because opposition members would not be attending. He said that they had found this to be an extraordinary statement to make and had checked for themselves if opposition members attended, which they did. Mrs Laird denied having this conversation and said that she was at home all day. She produced email records showing that she was at home around midday and swipe card records indicating that she was not at the offices then. Mr Redman’s evidence was that he had such a conversation with Mrs Laird on the pavement to the rear of CBC’s offices in the early afternoon. A swipe card record indicating Mrs Laird entered the first floor of the building at about 17.08 that day was also produced.

The unusual nature of the reported conversation, and Mr Redman and Mr Grahame Lewis’s stated reaction to it, suggests that it is unlikely to have been made up. Further, Mrs Laird had received an earlier email from Cllr Godwin indicating that his group might not be attending the meeting. I find that Mrs Laird did have a conversation along the lines reported by Mr Lewis with Mr Redman in the late afternoon of 27 October outside CBC’s offices and that she did enter the offices at around 17.08 that day when she met with Ms Pitman.

On 10 November 2003 the three group directors, Mr Huckle, Ms Fallon and Mr Perry, wrote to the Mayor raising concerns about Mrs Laird’s conduct and the effect the dispute was having on the running of council business and staff morale. They summarised their concerns as being:

“ We are very concerned about staff morale. We believe that the delays in resolving the current dispute are making the problem worse.

Despite our best efforts, the Council is in danger of not adequately discharging its duty of care to staff, particularly those who are to an extent “caught in the crossfire”.

We believe that Mrs Laird’s approach to some staff could be seen by them as intimidating and harassing, and has undermined the professional role of the Monitoring Officer and the Assistant Director Human Resources.

Mrs Laird has, in our opinion, obstructed our efforts to manage her requests for information from staff at a time when she has been off work sick and suffering from stress.

Much of the cost and time expended so far has arisen as a direct result of Mrs Laird’s reluctance when there were straightforward and relatively inexpensive courses of action available to her to demonstrate her innocence of the complaints made against her.

Staff are concerned about getting involved in the dispute and in particular at giving evidence either to the Standards Board or the internal panels, for fear of possible reprisals from the Managing Director or members.

We consider that Mrs Laird has failed at times to adequately separate her role of Head of Paid Service from her own personal position.”

On 11 November 2003 Mr Ford wrote to Ms Pitman raising his own grievance against Mrs Laird. He said that he had become increasingly troubled by “the unacceptable way” that he had treated by Mrs Laird, that he would accept whatever grievance process she determined and that he wanted to see “the unacceptable manner in which I had been treated recognised and to receive an appropriate apology”. The main alleged actions about which complaint was made were:

“Suggesting in a number of places and ways that I have been other than impartial in undertaking my statutory duties in connection with her dispute with the Cabinet.

Instructing or allowing her solicitor, Mr Simon Collingridge, to write a series of disrespectful letters to and about me such as would not normally be expected between solicitors.

Submitting a document to the extraordinary council meeting on 23 October which purported to amend or correct my professional report to the Council.

Submitting a letter and a report to members at that same meeting calculated to discredit me in my statutory role.

Instructing or allowing her solicitor to accuse me at that same meeting of a bias.

Promoting her point of view in such an authoritative manner as to be oppressive.”

On the same day Unison wrote to Mr Huckle raising a grievance against Mrs Laird. They alleged that:

On 12 November 2003 Mrs Karen Watson, Mrs Laird’s former personal assistant, lodged a grievance against her with Ms Pitman alleging that Mrs Laird had discriminated against her because she was a mother with young children; that Mrs Laird had prevented her from doing her job properly, and that Mrs Laird had bullied and harassed her.

By the middle of November 2003 it was therefore apparent that it was not simply a case of there being issues between Mrs Laird and Cllr McKinlay and the cabinet. There were now issues between Mrs Laird and directors, officers and staff and the protracted and bitter dispute between the managing director and the leader was taking its toll on staff morale generally. Of particular significance was the fact that Mrs Laird’s fellow directors had felt it necessary, as Mr Huckle put it, to “put their heads above the parapet” and to record their concerns in writing.

Mrs Laird rejected all the directors’ complaints and formed the view that the directors were acting out of self-interest and to protect their position. However, I find that the concerns raised by the directors were genuine and understandable. In particular, there can be no doubt that staff morale was suffering and that this was being exacerbated by the length of time it was taking for the disputes involving Mrs Laird to be resolved. It is also correct that Mrs Laird found it difficult to recognise the distinction between her personal interests and those of CBC. Thus, on a number of occasions she would intervene in her capacity as “head of paid service” in relation to matters in which she had a personal interest, such as the JNC process.

In relation to Mr Ford, there is no doubt that Mrs Laird and others, such as Cllr Duncan Smith and Cllr Godwin, had long had concerns about his competence. Earlier in the year there had been a meeting between group leaders to consider this issue, but Cllr McKinlay, who was a supporter of Mr Ford, had effectively prevented matters being taken further. As the year had progressed and the disputes had escalated Mrs Laird had been increasingly convinced that he was biased against her in the dispute with Cllr McKinlay. I do not accept that this was the case. Mr Ford may have been somewhat disorganised, indecisive and slow in responding on certain issues, but he was scrupulously honest and at all times sought to perform his job to the best of his ability.

As to the quality of Mr Ford’s legal advice, there are only two matters in relation to the dispute in relation to which it might be said that Mr Ford’s advice was wrong, and on both occasions he was relying on counsel. The first was the question of who should appoint a JNC panel: initially he thought the leader should. Counsel, Mr Fletcher, at first thought so too; Mr Ford relied on counsel’s initial advice. The second is that he did not quarrel with Mr Fletcher’s view that the cabinet members were not obliged to declare a prejudicial interest at the full council meeting on 27 October 2003. The ESO subsequently regarded that as a mitigating factor that meant no action need be taken despite what he regarded as strictly speaking a breach of the Code of Conduct and, in any event, the cabinet members withdrew before the vote and did not vote on the issue

In relation to Mrs Watson, Mrs Laird’s had had concerns about her performance as well, but she had also formed the view that she was very much on Cllr McKinlay’s side. Given that at one stage she was their shared PA this created difficulties. Mrs Laird was also convinced that Mrs Watson was having a relationship with Cllr McKinlay, and indeed eventually they moved in together and later married, although Cllr McKinlay claimed that they did not become intimate friends until later on. I did not hear evidence from Mrs Watson and do not feel able to put any weight on the allegations made by her.

Meanwhile the Grievance Panel procedure was going ahead. Mr Peter Lewis, a solicitor in CBC’s legal services department, had the task of making the administrative arrangements for the Grievance Panel. A detailed grievance procedure was set out in a letter to Mrs Laird’s solicitors dated 24 October 2003. Specialist training was provided by an external human resources consultant to the Grievance Panel members.

When the Grievance Panel met, it was advised by Mr Peter Lewis (in respect of procedures and the law) and by the independent human resources (“HR”) consultant, Mr Tim Rothwell (in respect of HR principles, policies and best practice).

The Grievance Panel hearing took place over 4 days: 13, 14 and 27 November and 2 December 2003. With regard to legal representation at the grievance hearing, Mrs Laird had the assistance of her solicitors throughout and Ms Melanie Tether (of Counsel) was instructed on behalf of CBC in relation to Grievances 1 and 4.

On 20 November 2003 the Staff and Support Services Committee (“SSSC”) resolved to refer the further complaints made against Mrs Laird to the JNC Panel.

On 10 December 2003 Mrs Laird returned to work.

On 11 December 2003 the JNC Panel had its first meeting. Mrs Laird was not invited to be there and was not present. Cllr Seacome was appointed as chairman and the JNC Panel were assisted and advised by Mr Brady and Ms Sarah Farooqi, a solicitor with CBC. Having considered the complaints made they decided that there was sufficient evidence for an investigation to be carried out into whether there was a case to answer. It was resolved that further information in relation to the complaints should be obtained by 19 December 2003, that the information should be forwarded to Mrs Laird by 23 December 2004 and that Mrs Laird should respond by 12 January 2004.

On 12 December 2003 Mrs Laird wrote to CBC concerning the medical referral they had been requesting since 21 October 2003. She was mistrustful of this request because she perceived it as a ruse to enable CBC to retire her on medical grounds. However, it was necessary for this to be done if CBC was to be in an informed position to be able to discharge its duty of care. In her letter she stated that she was willing to consider a medical “in principle” but there would be conditions and her solicitor would write to say what they were. Mrs Laird was also reluctant to agree to the risk assessment which CBC was requesting be carried out.

On 16 December 2003 the Grievance Panel issued a 30 page report. They upheld Grievance 2 in part (relating to the annual appraisal). Grievances 3 and 4 were adjourned pending the report of the SBE and (in the case of the allegations of defamation) a Court judgment. Grievances 1, 5 and 6 were dismissed.

On 18 December 2003 the Grievance Panel report was adopted by the council.

On 22 December 2003 Mrs Laird was provided with information relating to the JNC complaints. Further information was provided on 23 December and 31 December 2003. Given the deadline given to respond by 12 January 2004, Mrs Laird spent much of the holiday period working on her response to the JNC Panel.

On 5 January 2004 she asked for further time to respond to the allegations, and on the same day she attended a return to work interview.

On 12 January 2004 Mrs Laird nevertheless put forward a substantial response to the JNC Panel, accompanied by some 600 pages of supporting documentation.

The JNC Panel met on 15 January 2004 to consider the position. Mrs Laird attended with her solicitor and a trade union representative and a representative of the Employers Organisation. During the course of the meeting Mrs Laird became distressed and had to leave the meeting.

The meeting continued with her solicitor and trade union representative present. The JNC Panel accepted Mrs Laird’s contention that the paperwork was complex and potentially difficult to understand and resolved that Mr Brady should assemble the paperwork, present it in an appropriate form and submit a report to the JNC Panel which would then be provided to Mrs Laird for her response.

On 16 January 2004 Mrs Laird reported her distressed departure from the meeting the previous day as a health and safety incident. In the report she stated that he had subsequently seen her GP and that he would be writing a letter. In fact Mrs Laird had seen her GP on 13 January 2004 and he had agreed to write a letter following that consultation. The GP’s letter dated 16 January 2004 expressed concerns about “the potential harm that could be caused by subjecting someone, returning from an episode of severe anxiety depression to a prolonged and intensely stressful hearing”.

On 29 January 2004 Mrs Laird’s solicitor wrote to Ms Farooqi outlining a number of concerns regarding the procedure adopted by the JNC Panel, Mr Brady’s involvement in the JNC process, the calling of meetings and the SBE investigation. Ms Farooqi replied by letter on 2 February 2004. The concerns raised were considered by the JNC Panel at a meeting on 4 February 2004. Mrs Laird was present for part of that meeting but did not make representations. The JNC Panel resolved to continue with its work and reconvene on 11 February 2004.

On 3 February 2004 Mrs Laird issued proceedings in the Northampton County Court against CBC seeking repayment of legal fees allegedly incurred on its behalf - Claim No. 4QZ03830. In the short hand summary of the claim on the front of the claim form she stated that: “Council passed a resolution on 18/12/03 to reimburse the claimant”. The resolution in fact instructed the s.151 officer to settle the claim “in so far as he is satisfied that it relates to advice taken to the benefit of the Council”. In negotiations with Mrs Laird the s.151 officer had indicated that he considered that there should be a partial reimbursement of the fees. The effect of the resolution was therefore the authorisation of reimbursement of Mrs Laird, although the resolution did not state so in terms. In all the circumstances, I do not consider that this was a attempt to mislead the Court, as CBC contends.

On 4 February 2004 Mrs Laird set out the conditions under which she would be willing to have a medical assessment. Mrs Laird had understandable concerns about confidentiality, but the effect of her suggested conditions would have been that no one who actually mattered would be able to see the medical report, as Ms Fallon pointed out in her reply of 6 February 2004.

On 10 February 2004 there was a further incident involving Mrs Laird and Cllr McKinlay. On her return to work she had requested that Cllr McKinlay stay away from the secretariat. He had refused to agree to this although he generally ensured that he would only go there when Mrs Laird was not in her office. On 10 February he had gone there to wish Browen Ball a happy birthday. While he was there Mrs Laird came into the room and asked him to leave, which he refused to do. His presence there meant that as far as Mrs Laird was concerned she could not leave her office, but he did not take steps to physically prevent her from doing so.

The following day the JNC Panel reconvened and decided that the “statement of concerns” which had been prepared by Mr Brady should be sent to Mrs Laird. She was invited to respond by 5 March 2004 and was given a choice of 10, 11 or 18 March 2004 as dates when she could appear before the JNC Panel, if she wished.

On 17 February 2004 Mrs Laird wrote to Ms Farooqi objecting to the JNC Panel, to the new timetable, and to the need to deal with revised charges and evidence. In that letter and in a further letter of 20 February 2004 Mrs Laird stated that she had no confidence in the JNC process. The JNC Panel considered the correspondence at a meeting that day and decided to reconvene after there had been a meeting between the Chairman, Ms Farooqi and Mrs Laird to discuss the JNC proceedings and Mrs Laird’s concerns. That meeting took place on 24 February 2004. At the meeting Mrs Laird handed over a letter in which she explained that she considered that the best way of ensuring that she received a fair hearing and natural justice would be if a DIP was appointed without delay.

On 26 February 2004 Mrs Laird issued a court claim against Cllr McKinlay alleging harassment and seeking an injunction - Claim No. 4CN00734.

On the same day Mr Collingridge of Davies and Partners wrote to Mr Ford asserting that there was no contractual requirement to submit to medical examination, and stating that Mrs Laird would only do so with a view to ill health retirement.

On 4 March 2004 Mrs Laird served a further response to the JNC Panel statement of concerns together with over 100 pages of supporting documentation. On 11 March 2004 Ms Farooqi wrote to Mrs Laird’s solicitors setting out five draft charges.

On 15 March 2004 the JNC Panel met and heard from Mrs Laird’s representatives. Mrs Laird was represented by both her solicitor and counsel, who made written and verbal submissions on her behalf.

The JNC Panel considered the submissions made by Mrs Laird and her counsel and trade union representative to the effect, among other things, that: the JNC Panel should allow Mrs Laird further time to respond to the draft charges sent to her on 11 March 2004; an independent investigator should be appointed by the JNC Panel to make sure that the concerns that Mrs Laird was being asked to respond to were investigated independently; when this investigation had been completed a report be given to Mrs Laird so that she could respond; Mrs Laird did not have confidence in the process of the JNC so far and that she was unable to fully answer the concerns that had been outlined in the report to the JNC that was submitted to her in February 2004; and the preliminary investigation that had been conducted by the JNC Panel was not complete and, therefore, an investigator should be appointed to conduct an investigation and to prepare a report for the JNC Panel.

Despite the effect that further delay would have upon all of the parties involved in the process, the JNC Panel decided to agree to Mrs Laird’s requests and to appoint an independent consultant to overview the work. A provisional timetable was set that required the investigator to be appointed by 29 March 2004 and then one month allowed for the consultant to conduct his or her overview and a week to prepare a report. The JNC Panel would then have a week to consider the report. The JNC Panel would meet thereafter to hear the final submissions of Mrs Laird following any additional material being put to her. The parties agreed that the timetable would become clearer once the consultant had been appointed. That consultant was Mr Coopey, a human resources consultant, who was instructed on 26 March 2004.

A council meeting had been called for 19 March 2004 to consider the JNC Panel proceedings. Mrs Laird was concerned this meeting might lead to her suspension. These concerns had been raised with Ms Farooqi who had informed her solicitors that the JNC Panel had no plans to make any such recommendation but that the council retained that option. About an hour before the meeting was due to take place Mrs Laird was visited by two Conservative councillors, Cllrs Garnham and Melville-Smith, who advised her that regardless of the JNC Panel’s recommendations they intended to move a resolution to suspend her at the meeting. She told them that they had prejudged the matter, that this was a breach of the Code of Conduct which she would have to report to the head of legal services and suggested that they report themselves. They said they would not do so and that it would be her opinion against theirs.

Following this meeting, and in the light of her concern about possible suspension, Mrs Laird sent an email instruction timed at 1422 hours to Mr Adrian Thompson, an administrator in central services, which was to be of importance in relation to her subsequent suspension. The email stated that:

At the 19 March 2004 council meeting the recommendations of the JNC Panel report were adopted and there was no motion to suspend Mrs Laird, although the issue was discussed and the council was advised generally by Alastair McGregor QC.

On 24 March 2004 Mr Rothwell, the HR consultant engaged by CBC, advised that Mrs Laird was now prepared to agree to an independent medical assessment without the previous conditions, but with some conditions still. The agreed position was set out in a letter from Mr Rothwell to Mr Collingridge dated 31 March 2004, which included certain safeguards in respect of confidentiality and the dropping of Mrs Laird’s demand that the purpose of the medical assessment should be confined to ill health retirement.

Following Mr Coopey’s appointment Ms Farooqi was engaged in providing documentation and assistance to him. On 21 April 2004 Mr Coopey issued a draft report recommending that various further tasks be undertaken. Mrs Laird’s solicitors were so advised.

On 6 May 2004 the JNC Panel met and considered Mr Coopey’s report. It was resolved that the report and accompanying paperwork be forwarded to Mrs Laird’s solicitors by 11 May 2004 and that the JNC Panel would reconvene on 25 May 2004.

On 11 May 2004 Ms Farooqi wrote to Mrs Laird’s solicitors and supplied a copy of the JNC Panel’s minutes of 6 May 2004 and Mr Coopey’s report. The report expressed the view that the style and format in which the concerns and supporting documentation had been presented was appropriate. It set out minor reservations in relation to the grouping of the allegations and the setting out of the supporting evidence. The report set out 6 principal allegations with particulars provided of each. It summarised the evidence, Mrs Laird’s response and set out comments. Ms Farooqi’s letter invited Mrs Laird to submit any final written material by 4.00 pm on 21 May and also invited her and her representatives to attend the meeting of 25 May 2004.

On 19 May 2004 Mrs Laird’s solicitors wrote to Ms Farooqi stating that they were working through Mr Coopey’s report but would not be ready for the 25 May 2004 meeting. On the following day they threatened an injunction if the meeting was not adjourned. Ms Farooqi replied that she had no authority to agree an adjournment and suggested that application be made to the JNC Panel itself.

The JNC Panel met on 25 May 2004 and the meeting was attended by Mrs Laird, her solicitor and her counsel. Counsel for Mrs Laird made, among other submissions, a submission that the decision made by the council on 27 October 2003 to establish the JNC Panel was invalid as certain members had failed to declare an interest and that Mrs Laird should be given more time to respond to the allegations that were laid against her. The JNC Panel considered all of the representations made on behalf of Mrs Laird and resolved to continue as it considered that the Panel was validly constituted and that Mrs Laird had had sufficient time to respond to the allegations.

The JNC Panel then invited Mrs Laird to make any representations that she might have before the JNC Panel made its final report to council. Mrs Laird declined to do so.

After the meeting on 25 May 2004 the JNC Panel prepared a report to the the council recommending the appointment of a DIP. A copy of the report was forwarded to Mrs Laird’s solicitor on 27 May 2004

The charges which it was recommended in the report that the DIP be appointed to hear were as follows:

On 1 June 2004 Mrs Laird’s solicitors informed Ms Farooqi that Mrs Laird would be seeking an injunction to prevent the council from considering the JNC Panel’s report. CBC responded by undertaking not to implement any resolution to appoint a DIP until after the inter partes hearing of the injunction application.

On 2 June 2004 Mrs Laird received a copy of the draft report of the SBE, which dismissed most of her complaints.

On 3 June 2004 there was a council meeting which considered the JNC Panel’s report and resolved to appoint a DIP. Mrs Laird’s solicitors were informed by Ms Farooqi of that decision.

On 4 June 2004 Mrs Laird issued Claim No. 4BS50323 in the High Court challenging the JNC Panel and seeking an injunction to prevent the council implementing its recommendations. On the same day Mr Peter Lewis wrote to Mrs Laird informing her that the council would meet on 11 June 2004 to consider her possible suspension.

Also on 4 June 2004 Mrs Laird suffered a severe panic attack, and was signed off sick from work by her GP. She was never to return to work.

On 11 June 2004 Mrs Laird’s interim injunction application against CBC was dismissed and Mrs Laird was ordered to pay CBC’s costs on an indemnity basis.

Following the dismissal of the injunction application the council met on the evening of 11 June 2004. Mrs Laird’s solicitor had submitted a letter regarding the question of Mrs Laird’s suspension prior to the meeting. At the meeting the council resolved to suspend her in view in particular of the evidence that Mrs Laird had, in anticipation that she might be suspended at the meeting called for 19 March 2004, given instructions to Mr Thompson to delete materials from her computer.

Mrs Laird was informed of her suspension by telephone by Mr Peter Lewis. Following receipt of the news she suffered a particularly severe panic attack, collapsed on the floor and hurt her shoulder. She was found unconscious and hyperventilating by her husband who called the emergency services.

Although it is possible that a less severe reaction might have occurred had the news been broken to her in a different manner, I find that it was reasonable for Mr Peter Lewis to consider that the most important thing was for Mrs Laird to be informed of the position straight away, rather than run the risk of learning of it from third parties, or indeed the press. I also find that there were other reasons for Mrs Laird’s distress and in particular, the draft SBE report, the outcome of the Court hearing on 11 June 2004 and the results of the elections which had just been held, which meant Cllr McKinlay remaining as leader.

Following her suspension, Mrs Laird’s office was secured. However, in light of the concerns highlighted regarding Mrs Laird and the use of her email account it was decided that Mrs Laird’s email account should be opened. Ms Farooqi thought it was highly likely that there would be emails in Mrs Laird’s account that were either legally privileged or emails that she should not see. She therefore instructed counsel to access a CD-ROM containing Mrs Laird’s email account and remove those emails that counsel believed were legally privileged or otherwise inappropriate for her to see. She wrote to Mrs Laird’s solicitor on 25 June 2004 and informed him of her proposals regarding Mrs Laird’s email account.

On 5 July 2004 CBC instructed Dr Phillip, a consultant occupational health physician to assess whether Mrs Laird was medically fit to continue in her role as managing director, if she was unfit whether she was likely to become medically fit within a reasonable time and whether or not Mrs Laird was permanently unfit to undertake her role and should be considered for retirement by reason of being permanently incapable of discharging her duties of her employment or comparable employment. From April 2004, Ms Pitman and Mr Rothwell had been trying to agree arrangements with Mrs Laird for her to see an Occupational Health Consultant who would undertake an examination of her. Mrs Laird saw Dr Phillip on 17 July 2004.

On 30 July 2004, Mr Peter Lewis, wrote to Mrs Laird’s solicitor regarding access to her office. In his letter, Mr Peter Lewis indicated that he would like to access Mrs Laird’s office and he invited a representative from Mrs Laird’s solicitor to be present when this happened. Mr Peter Lewis also explained that personal documents, excluding those that were legally privileged, that were relevant to the investigation could be copied and he offered Mrs Laird’s solicitor the opportunity to be present. Mrs Laird’s office was accessed by Ms Farooqi and Mr Peter Lewis on or around the 4 or 5 August 2004. Mrs Laird’s remaining personal items were gathered together and placed in boxes. The documents that were found in Mrs Laird’s office were also placed in marked boxes.

On 2 August 2004 Mr Lynch QC took up appointment by the council on the nomination of the Office of the Deputy Prime Minister to act as DIP and issued his first report extending Mrs Laird’s suspension until 1 September 2004.

On 23 August 2004 the JNC Panel made representations to the DIP seeking continuation of Mrs Laird’s suspension. On 2 September 2004 the DIP extended Mrs Laird’s suspension to 1 October 2004. On 29 September 2004 the first oral hearing before the DIP was held and he decided to proceed with his investigation. On 30 September 2004 the DIP ordered the continuation of Mrs Laird’s suspension until 1 November 2004.

Meanwhile, on 24 September 2004 Dr Philipp reported by letter. He was not prepared to certify that Mrs Laird was entitled to ill health retirement, because he said that if the legal issues were dealt with and Mrs Laird then had clinical support for say six months, she could be back at work. In his penultimate paragraph he dealt with occupational health advice in the event of a return to work: he did not rule out a return to work.

On 26 October 2004 Mrs Laird’s claim against Cllr McKinlay in Claim No. 4CN00734 was struck out by District Judge Frenkel as having no real prospect of success and Mrs Laird was ordered to pay Cllr McKinlay's costs.

On 4 November 2004 SBE issued its final report into the complaints against Cllr McKinlay and the other Cabinet members. The SBE report ran to 144 pages. It considered 36 different allegations. The allegations made were in summary that members failed to treat others with respect, compromised the impartiality of council employees, disclosed confidential information, brought their office or authority into disrepute, improperly secured an advantage or a disadvantage, misused the authority’s resources, failed to give reasons for executive decisions, failed to report a suspected breach of the Code of Conduct, failed to disclose a personal interest and took part in a meeting in which they had a prejudicial interest. It was concluded that in relation to all the allegations there was either no evidence of a failure to comply with the Code of Conduct or that no action needed be taken.

On 16 November 2004 DIP declined Mrs Laird’s request that he stay his investigation and directed the parties to seek joint advice from Dr Phillip on the risk of Mrs Laird committing suicide if preliminary steps in the investigation were taken. On 23 December 2004 Dr Phillip issued a further report on Mrs Laird suggesting that a consultant psychiatrist advise on the issue of suicide risk.

On 28 January 2005 Mrs Laird discontinued her claim No. 4BS50323 against CBC (and was subsequently ordered to pay £46,000 in costs).

On 11 February 2005 the DIP issued a further report directing that an independent consultant psychiatrist should be appointed to report on Mrs Laird.

On 24 February 2005 Mrs Laird’s claim against CBC for legal fees Claim No. 4QZ03830 was struck out as disclosing no reasonable grounds.

On 3 March 2005 DIP issued further reports requesting that the parties seek a consultation for Mrs Laird with Dr Paul Aylard, consultant psychiatrist, as soon as reasonably practicable. On 14 March 2005 DIP issued a further report addressing the contents of the brief to be put before Dr Aylard and on 11 April 2005 a Joint letter of instruction issued to Dr Aylard.

On 15 April 2005 the DIP issued a further report extending Mrs Laird’s suspension.

On 4 May 2005 Dr Aylard issued his report on Mrs Laird., stating that in his view Mrs Laird was unfit to go through the DIP investigation and was permanently incapable of undertaking a senior management position. His report advised that:

On 20 May 2005 the DIP issued a further report requesting the parties’ submissions on whether an investigation could be conducted. Having received various submissions and issued a number of further reports, on 4 August 2005 the DIP issued a report concluding that it was impracticable for him to hold a substantive investigation into the allegations against Mrs Laird.

On 9 August 2005 CBC wrote to Mrs Laird’s solicitors informing them that in the light of the DIP’s conclusion it considered Mrs Laird’s contract of employment to be frustrated. The letter stated that:

On 6 September 2005 Mrs and Mr Laird applied to CBC for an ill-health retirement pension. CBC replied to Mrs Laird’s solicitors on 1 November 2005 CBC stating that an occupational health physician would be instructed to assess Mrs Laird for eligibility for an ill-health retirement pension. On 24 January 2006 Gloucestershire County Council (“GCC”) confirmed to CBC that Mrs Laird was permanently unfit for work and that her application for ill-health retirement would be supported. On 13 March 2006 the SSSC resolved to release Mrs Laird’s ill-health retirement pension back dated to 10 August 2005 and Mrs Laird was so advised on 29 March 2006.

In the meantime, on 7 November 2005 Mrs Laird presented Claim No. 1402006/2005 to the Bristol Employment Tribunal alleging disability discrimination and unfair dismissal. CBC filed its response on 16 November 2005. Eventually, on 27 October 2006 Mrs Laird’s claim was dismissed following withdrawal.

Having been alerted to Mrs Laird’s medical history by Dr Aylard’s report CBC were meanwhile seeking to inquire further into it. On 16 November 2005 CBC requested of GCOHS disclosure of Mrs Laird’s medical questionnaire. On 12 December 2005 GCOHS declined to disclose the questionnaire without Mrs Laird’s consent. On 2 May 2006 CBC wrote to Mrs Laird’s solicitors requesting that she provide consent to disclosure to CBC by GCOHS of her questionnaire. On 21 July 2006 HHJ Havelock-Allen QC sitting in the High Court Bristol District Registry ordered pre-action disclosure to CBC against RCT, GCOHS and Mrs Laird. On 31 August 2006 GCOHS disclosed to CBC the medical questionnaire.

Having considered the position CBC eventually resolved to bring the present proceedings against Mrs Laird. On 4 May 2007 CBC issued Claim No. 7BS90328 against Mrs Laird and RCT (alleging negligence). On 15 December 2008 CBC issued Claim No. HQ0804978 against Mrs Laird (alleging fraud).

Dr Aylard has been called as an expert by CBC in these proceedings. In relation to the risks to Mrs Laird involved in the prosecution of the proceedings he advised as follows:

In the light of this and other evidence I directed that before Mrs Laird gave evidence a medical assessment of her fitness to do so be carried out and recommendations be made as to what supportive measures could be provided whilst she was giving evidence. Such an assessment was carried out by Mrs Laird’s expert psychiatrist, Professor Lader, and the supportive measures he recommended were provided.

CBC contends that, as one would expect with any major appointment in local government, the offer of employment made to Mrs Laird was subject to there being a satisfactory medical report. This was spelt out in the recruitment documentation and in Mr Ford’s letter of 7 January 2002 in which it was stated in terms that the offer was “conditional upon medical clearance being obtained from our Medical Adviser”.

CBC further contends that this was expressly accepted by Mrs Laird who replied to Mr Ford’s letter on 9 January 2002 saying that she was “pleased to accept the post of Managing Director on the terms and conditions outlined in your letter”. Having received medical clearance from GCOHS, CBC wrote to Mrs Laird on 14 January 2002 informing her that “we can now proceed with your appointment”. CBC say it is not until then that a contract was concluded, the condition of a satisfactory medical having been satisfied.

Mrs Laird contends that the employment contract was made on 4 January 2002 by direct negotiation between Mrs Laird and the then leader of the council, Cllr Duncan Smith, with the assistance of Ms Holden, the chief executive of SWRA. She contends that that agreement was made without mention of or provision for a condition of a medical questionnaire or health clearance. In those circumstances she contends that the medical questionnaire is irrelevant as being after the event. Further, she contends that there was no council resolution authorising Mr Ford to raise the issue of the medical questionnaire, and that Cllr Duncan-Smith and Ms Houlden had failed to make mention of such a requirement during the recruitment process.

The recruitment process was conducted by CBC through the SRC and its recruitment advisers, SWRA acting mainly through Ms Houlden. The original documentation included:

An Introduction.

Advisory Notes.

A Job Description.

A Personnel Specification Form.

An Information for Prospective Employees Form. Under the heading “Medical Examination” this stated:

A Job Application Form, including a “NB” in bold just below the signature section of the Form stating that the candidate “will be required to complete a detailed medical declaration before appointment”.

Mrs Laird signed and dated her application just above the note in bold about a medical declaration before appointment and her supporting statement concluded with a paragraph starting “I enjoyed reading the Council’s appointment pack ....”.

The documentation, and in particular the Application Form and the Information Form, therefore included express reference to the requirement of a medical declaration/report.

Following the interview process and the offer of a job made to Mrs Laird on 4 January 2002, on 7 January 2002 Mr Ford wrote to Mrs Laird “to confirm the Council’s offer to you of the appointment ...”. The offer was stated to be “conditional upon medical clearance being obtained from our Medical Adviser”. The same letter also stated: “When we have your medical clearance and Rhondda Cynon Taf Council’s consent, we can agree your start date.” A press release issued the same day announced the appointment “subject to medical and reference formalities”.

On 8 January 2002 Mrs Laird completed the medical questionnaire, which she sent to GCOHS.

On 9 January 2002 Mrs Laird replied to CBC’s letter saying she was “pleased to accept the post of Managing Director on the terms and conditions outlined in your letter” and that she had “returned the medical questionnaire, as requested, to the Council’s Medical Adviser”. No issue was taken as to the terms in which Mr Ford’s letter had been expressed, the requirement to fill in the medical questionnaire or the stated conditionality of the offer made.

On 10 January 2002, GCOHS’s representative signed a form, which was sent to the council, stating that “[b]ased on the information given on the health questionnaire, the applicant has been found to be ... fit”.

On 14 January 2002 CBC wrote to Mrs Laird informing her that the medical clearance certificate had been received and that “we can now proceed with your appointment”, and giving a start date of 4 February 2002. On the same day Mrs Laird gave formal notice to RCT.

CBC say that it was only then that any contract was concluded and that throughout the process the formation of the contract had been made subject to receipt of a satisfactory medical report.

As CBC submits, a contract may be subject to the happening of an event as a condition precedent to the existence of the contract: see Chitty on Contracts (30th ed.) Vol. 1 at 2-148 to 2-157. “Undeniably, it is possible for an employer to make an offer conditional on something to be objectively determined (for example, the passing of a medical examination)”; per Mustill LJ in Wishart v National Association of Citizens Advice Bureaux Ltd [1990] ICR 794, CA, at 801C; cf. per Ralph Gibson LJ at 805C-E.

In the present case the condition of a satisfactory medical report was spelt out in the Information Form which formed part of the application for the job made by Mrs Laird. The requirement to complete a medical declaration before appointment was re-iterated in the Application Form itself. It was confirmed by Mr Ford’s letter of 7 January 2002, the terms of which Mrs Laird accepted. On the documents the conditionality of a satisfactory medical report is clear.

Further, it would reasonably be expected that an appointment of this nature would be subject to a satisfactory medical report. This was a major post and CBC would be expected to be satisfied that an applicant was medically fit to carry it out before committing itself to any contract of employment, quite apart from considerations relating to its own duty of care.

That this was usual practice in local government was borne out by the evidence of a number of witnesses, such as Ms Houlden, Cllr Hale and Mr Ford.

Mrs Laird disputed that this was the case in relation to JNC appointments and indeed it appears that the medical questionnaire she filled in for her job at RCT was dealt with after the contract had been made. However, on the evidence as a whole I am satisfied that usual and reasonably expected practice in local government is for appointments generally, including JNC appointments, to be subject to a satisfactory medical report. It would also be usual and reasonably expected practice for contracts for such appointments, and in particular appointments at the level of chief executive, to be concluded in writing rather than orally.

It would also be unusual for an employee to enter into a contract of employment prior to agreeing or giving notice of termination of an existing employment contract, as Mrs Laird’s case contemplates. The nature of the contract with CBC was said to be “a contract by an employee of one employer with a new employer to take steps to determine the existing employment and to commence a new employment with the new employer following that first determination”. Whilst it would no doubt be possible to conclude such a contract, it would not be usual.

Despite the documentary position, and what I find to be usual and reasonably expected practice, Mrs Laird nevertheless contends that the contract of employment was made orally prior to and without reference to medical clearance. She contends as follows:

the appointment resolution stated that the offer was to be on terms agreed by the SRC which acted through and approved what was done by Cllr Duncan Smith and Ms Houlden.

the appointment was agreed on 4 January 2002 when all the terms were agreed between Mrs Laird and Cllr Duncan Smith and Ms Houlden (the persons tasked with this by full council resolution).

there was no mention then of a medical questionnaire or any conditionality.

the agreed publicity at that point made no mention of a medical questionnaire.

Ms Houlden had agreed that the published NJC terms were inappropriate and could not apply (and had therefore effectively accepted that the earlier written documentation emanating from the council, including all references to medical questionnaires, was irrelevant and inapposite).

Mrs Laird would never have allowed her acceptance to be unconditional or to be publicised (and so that RCT, her then employers, learnt of it) and effectively resigned from RCT, and would not have withdrawn her other application, had she known that the offer was conditional. Her later steps were after all these matters had occurred

Mr Ford had no authority to insert this condition in these circumstances. In fact Mr Ford was not told by Cllr Duncan Smith of what had been agreed with Mrs Laird on the evening of 4 January 2002 and subsequently had to modify the terms of the written contract when it was explained to him as to the agreements which had then been made.

The mere fact that an oral agreement is subsequently reduced to writing does not prevent the oral agreement being final and binding.

As to (1), the appointment resolution stated that Mrs Laird “be offered the position of Managing Director, Cheltenham Borough Council, on terms to be agreed by the Structure Review Committee”. Whilst it is correct that it does not refer to conditionality or the need for medical clearance, one would not expect it to do so. That was a matter of detail to be dealt with by others. The council was dealing with who should be offered the appointment, not its terms. The terms had been and would be continued to be dealt with by the SRC. Whilst the SRC acted principally through Cllr Duncan Smith and Ms Houlden in agreeing the main terms of the contract with Mrs Laird, the detailed terms of the contract, including required formalities, would reasonably be expected to be and were left by the SRC to CBC’s legal department, as borne out by Mr Ford’s letter of 7 January 2002. Further, I accept the evidence of Ms Houlden that she told Mrs Laird that she would need to contact Gerald Ford to discuss finalisation of all details and that Cllr Duncan Smith said words to similar effect.

As to (2), it is not correct that all terms were agreed on 4 January 2002. The main terms, and in particular salary terms, were agreed, but there remained a number of matters to be finalised, such as leave entitlement and car allowances. Even if the JNC terms and conditions had been agreed as the underlying contract terms, that did not in itself mean that all terms had been agreed. One would expect there to be negotiation as to the appropriate adaptation of such terms to fit this appointment, as indeed subsequently occurred. In summary, there was an agreement in principle at that stage, but no binding contract, still less an abandonment of expressly stated contractual pre-conditions, such as the requirement of a satisfactory medical report.

As to (3), it is correct that neither Cllr Duncan Smith nor Ms Houlden made any mention of a medical questionnaire. That is hardly surprising since this was a matter which was already dealt with in the documentation provided, and which would in any event be expected to be dealt with by Mr Ford as part of contract finalisation. No doubt their expectation was that the need for medical clearance would not prove to be any obstacle, but that does not mean that this important formality was still not required to be met. Further, although no express statement of conditionality was made, it was made clear to Mrs Laird that the finalisation of the contract was a matter to be dealt with between her and Mr Ford.

As to (4), the only press release in evidence was one dated 7 January 2002 which stated in terms that the appointment was “subject to medical and reference formalities”. Mrs Laird’s evidence was that the press release was agreed by her was on 4 January 2002 and was issued that day. She said that that press release did not mention this “subject”. I accept that the press release was agreed on 4 January 2002, but I do not accept that it was in different terms to that dated 7 January 2002. There is no good reason why the terms of the press release should change in this respect and it is inherently unlikely that it would do so. It is far more likely that in agreeing the press release Mrs Laird was concentrating on the quotations set out from her and Cllr Duncan Smith, rather than the more routine parts of the press release, and that she simply did not pick this point up, and I so find.

As to (5), Mrs Laird did raise with Ms Houlden the issue of the inappropriateness of the NJC terms and Ms Houlden did express general agreement with her. However, this did not mean a requirement such as a satisfactory medical report, which would be equally relevant regardless of the terms and conditions used, was also inappropriate, still less that there was an agreement that it be dispensed with. Mrs Laird’s evidence was that since the Information Form referred to NJC terms and conditions and they were inapposite, it followed that the whole Form was irrelevant and could be disregarded. This does not follow. In fact, most of the headings in the Form remained relevant regardless of the terms and conditions of appointment (for example, “interview expenses”, “payment of salary”, “superannuation”, “special leave”, “sickness” etc.). In any event, as Mrs Laird ought to have appreciated, issues such as the terms and conditions to be used would be a matter for CBC itself, not its recruitment advisers.

As to (6), the matters relied upon are equally consistent with a confident expectation of employment rather than actual employment. In any event, it is what a person in Mrs Laird’s position would reasonably have understood rather than what she may or may not have actually understood that matters.

As to (7), Mr Ford was not inserting any new condition. He was simply re-iterating a condition that had been present from the outset. In any event, matters of this kind were within his authority as the person tasked with dealing with the details and formalities of her employment. Just as the SRC Committee through Cllr Duncan Smith could delegate matters to Ms Houlden, it could also delegate matters to the CBC legal department and Mr Ford.

As to (8), this may be correct, but it does not assist Mrs Laird in this case. There was no binding contract made orally.

For all these reasons, I do not accept Mrs Laird’s case in relation to the formation of the contract. The contract was concluded on 14 January 2002 and the making of the contract was throughout conditional on there being a satisfactory medical report. However, I accept that Mrs Laird believed that a binding contract had been concluded on 4 January 2002, as evidenced by the fact that immediately thereafter she withdrew from the Ashford post she had applied for, agreed a notice period with RCT and started on CBC work.

The medical questionnaire provided as follows:

The questions were then set out. The material questions and answers in the medical questionnaire were as follows:

“A) Do you normally enjoy good health” - “Yes”.

“C) Do you have either a physical and/or mental impairment” – “No”.

“D) Have any of your near relatives suffered from… Mental Trouble” – “No”.

“G) Date when you last had medical treatment and reason:” – “Bruising to lower back following a fall at work 17/9/2001”.

“H) Have you any ongoing condition which would affect your employment?” – ““No - nb I get occasional migraine but this does not affect my ability to work or usually require time off from work. (Treated with Zonig)

The name and address of Mrs Laird’s doctor was then given and the form concluded as follows:

It was common ground that this was a poorly drafted questionnaire. The evidence of Dr McNamara, CBC’s occupational health expert, was that it was “very poorly drafted” and “quite inadequate”. He explained that usually such forms are much fuller and clearer, and that they often give examples to assist in answering the questions and provide explanatory notes. He acknowledged that a lay person would be likely to interpret the questions differently to a doctor and that people might interpret the “not particularly well phrased questions” in different ways.

It is also to be noted that there is no sweep up question calling for disclosure outside the questions asked, such as, for example: “Is there anything else in your history or circumstances which might affect our decision to offer you employment?”.

In construing the medical questionnaire Mrs Laird submits that:

CBC cannot seek to go outside the wordings of the questions asked; Mrs Laird is entitled to assume that they ask for the information which CBC desired – see Moore v Hermes [2003] Lloyd’s LR IR 315 at p318-9.

Mrs Laird is entitled to construe the wording in a fair and reasonable way and any ambiguities should be resolved in her favour – see Revell v London [1934] 50 Lloyd’s Rep 114. It was for CBC, which had put forward the form, to avoid ambiguity.

Where the question of whether there is a misrepresentation depends upon a matter of judgment by the representor, the Court should be reluctant to find a misrepresentation. This is because (i) it is dangerous in the context of an exercise of judgment to engage in a microscopic analysis of the words used because that is not the exercise and (ii) there has to be a “misrepresentation” which is a global word with serious consequence - see Avon v Swire Fraser [2000] Lloyd’s LR IR 535 at paras 1-20, and 200.

The wording that says that Mrs Laird acknowledges that “I declare that the statements… are true and given to the fullest of my ability and knowledge and if I have wilfully withheld any material fact(s), I am, if engaged, liable to the termination of my contract of service” is only consistent with the form asking for subjectively true answers i.e. what the relevant person genuinely believes. This is supported by this being a medical questionnaire where the person completing it could not be understood to have professional medical knowledge. The result is that the answer only needs to have been given in good faith i.e. honestly - Avon v Swire Fraser [2000] Lloyd’s LR I R 535 at paras 16-7, and also the line of insurance cases such as Fowkes v Manchester 3 B&S 917, Economides v Commercial [1998] QB 587 at p598-9 and Zeller v British Caymanian [2008] Lloyd’s LR IR 545 (which deals with a medical declaration).

In my judgment:

The medical questionnaire should be construed objectively – i.e. as a reasonable person in the position of Mrs Laird would have done – see, for example, the Zeller case para. 19 at p550 per Lord Bingham.

If the questionnaire is ambiguous, so that more than one meaning might reasonably be given to a particular question asked, then an answer correctly addressing either of those meanings would be true – see Revell v London [1934] 50 Lloyd’s Rep 114.

In considering that issue it is relevant that Mrs Laird is a lay rather than a medical person. She would not be expected to have any technical or specialist understanding of any of the questions raised or terms used.

Since this is CBC’s form it is for CBC to make it clear and unambiguous, and it cannot reasonably expect the candidate to do its job for them. The candidate’s stated duty was to answer the questions asked correctly to the best of their “ability and knowledge” and not wilfully to withhold material facts.

A non-disclosure would only give rise to a right of termination if it related to a material matter which had been “wilfully” withheld. There is no general duty of disclosure and the duty acknowledged is expressed in terms of “wilfully” witholding. “Wilfully” means a deliberate or at least reckless withholding.

As to whether the form was only seeking subjectively true answers I am not persuaded that it is so limited. The form sought various statements of fact, statements which self evidently were likely to be relied upon and therefore liable to cause loss or damage if care was not taken to ensure that the statements were accurate. In the ordinary way a person making such statements would be expected to take reasonable care in so doing. That is their duty at common law, and, where the 1967 Act applies, as a matter of statute law. Clear words would be required to exclude or limit that duty.

The fact that the form is being filled in by someone who does not have professional medical knowledge is reflected in the way in which the form is to be construed. It does not have a bearing on whether reasonable care should be taken by that person in so doing.

Further, none of the cases relied upon by Mrs Laird have a declaration requirement in the same terms as in the present case, and in particular the acknowledgment that the statements are made to the fullest of the maker’s “ability”. The form does not simply require statements to be made to the best of the maker’s “knowledge and belief”. “Ability” would ordinarily include taking reasonable care in the making of a statement. The terms of the declaration in relation to representations is therefore not inconsistent with there being a duty of care and I so hold.

CBC says that various answers in the medical questionnaire were false as Mrs Laird had had past episodes of depression and was taking an antidepressant at the time which she did not reveal. Mrs Laird says that she had had three past episodes of stress-related illness (and not depression) which she understood and which were linked to specific non-recurrent events, and that the relevant stress and illness had ceased and that she was only taking the anti-depressant as part of a “weaning-off” process.

The medical history as revealed by Mrs Laird’s medical notes was materially as follows:

In relation to Mrs Laird’s medical condition I heard evidence from two psychiatrists, Dr Aylard and Professor Lader. Dr Aylard interviewed Mrs Laird on 13 April 2005. Professor Lader interviewed her on 1 September 2008 and on 11 March 2009. I also heard evidence from Mrs Laird’s GP, Dr Mulrenan, and an occupational physician, Dr McNamara.

Based on the GP notes and Mrs Laird’s account of her medical history the expert psychiatrists were in broad agreement as to her medical condition in January 2002. Mrs Laird had suffered three episodes of depression with associated anxiety. These episodes were all associated with periods of stress and were also work related.

The first episode occurred in May 1997 and resulted in her taking just over two months off work on the advice of her GP, from the middle of May until the end of July 1997. She was “burnt out” due to a culmination of stresses, including pressure at work and the strain of constant long haul travelling. She was prescribed an anti-depressant, Seroxat, in a standard GP dosage of 20 mg. She remained low at times following her return to work and in November 1997 the dosage was increased to 30 mg per day. By December 1997 she was reported to be “very well” and to be “weaning off” Seroxat. In January 1998 she was showing no symptoms of stress and in March 1998 she was reported to be coping quite well even though this was the time when she was suspended from the CIH leading to her departure from the job the following month. By this time she was taking Seroxat sporadically, if at all.

The second episode occurred in September 1998 around the time that her stepsister, to whom she was very close, died unexpectedly after a short illness. At the time Mrs Laird was working as a consultant for Chapman Hendy and was paid on the basis of assignments carried out rather than on a regular basis. These were infrequent which meant that it was a time of financial difficulty and worry. Not having a full time job also affected Mrs Laird’s self esteem. This episode was not related to pressures at work, but was work related in the wider sense in that it was linked to the fact that she was not in regular work. She was referred to a counsellor and restarted on Seroxat at 20 mg per day. By the New Year of 1999 she was better, was reported to be “very well”, and had taken on a 9 month job in Cardiff. She was continued on Seroxat.

At the end of 1999 Mrs Laird was very anxious as a result of a unsatisfactory cervical smear test she had had. She was put on to a different anti-depressant, Lofepramine (a trycyclic anti-depressant), at a standard GP dosage of 70 mg. In January 2000 this was increased to 70 mg twice a day, and this continued until at least April 2000. Thereafter no further problems are reported until the middle of the following year and Mrs Laird appears to have come off the anti-depressants. This was not an episode of depression.

The third episode occurred at end of June 2001 when she had problems at RCT, where she was then working. Her chief executive, Mr Ryley, was insisting that she be seconded to carry out a major customer service project within a short time scale and Mrs Laird had major anxieties about her ability to carry this out. She was also having problems with Mr Ryley as he felt she was after his job. These worries led to her taking two weeks off sick on the advice of her GP from 26 June to 10 July 2001. On 9 July 2001, the day before she returned to work, she was prescribed Dothiepin, another trycyclic anti-depressant. By 19 July 2001 she had stopped taking Dothiepin but was told to restart it as she was still feeling unwell. On 9 August 2001 she was still finding work stressful and her dosage was increased to three tablets of 25 mg per day, which was still a standard GP dosage. This prescription was renewed in October 2001 and reduced to 25 mg in January 2002. In fact, Mrs Laird had stopped taking it regularly before then, and she stopped taking it completely by the end of February 2002.

From Mrs Laird’s perspective, her medical history shows that she had had three significant stress related illnesses in the last five years. The main episode had been in May to July 1997, when she had had to take over 2 months off work. Mrs Laird herself described this in terms of being a breakdown. The other episodes had been in September 1998 and June/July 2001, and on the latter occasion she had had to take two weeks off work. Aside from these periods off work Mrs Laird had been able to carry on working, even though at times she found work stressful.

Each of the episodes were work related, although there were also other stressors involved and the work stressors were not all the same. In relation to the first episode it was mainly a combination of the stress of the responsible job she was performing and the cumulative effect of constant long haul travel. In relation to the second episode it was mainly a combination of bereavement and the worry of not being in full time work. In relation to the third episode it was mainly a combination of the workload she was being asked to take on and issues arising out of her relationship with her boss.

From the time of the first episode Mrs Laird had been on anti-depressants for significant periods during the last five years, generally at a standard GP dosage level. When she felt better Mrs Laird would wean herself off the anti-depressants and often stop taking them altogether.

The three episodes of anxiety Mrs Laird had suffered were in fact episodes of depression. She was adamant that she had never been told that she suffered depression in a clinical sense. It is very possible that her GPs did not explain the episodes to Mrs Laird in these terms, although it is likely that the word depression would have been used on occasion. Even if it was, it is likely that Mrs Laird would not have wanted to admit even to herself that she suffered from depression, and to have rationalised her problems in terms of stress or anxiety.

The expert psychiatrists were agreed that it is standard practice for a person recovering from a depressive illness to be maintained on anti-depressants even though the depressive symptoms appear to be fully remitted. This is because it is difficult to be sure that full remission has occurred and because tapering off anti-depressant will lessen the likelihood of withdrawal symptoms.

They were also agreed that although Mrs Laird was taking anti-depressant medication in January 2002 she had recovered from her episode of depression in the summer of 2001, and indeed that she had done so by October 2001.

Professor Lader summarised her condition in January 2002 as follows:

Dr Aylard broadly agreed. Mrs Laird had a “vulnerability” to stress although he considered that Mrs Laird’s depression was not purely reactive and that to some extent she had a predisposition to be depressed as a constitutional attribute. Whilst he agreed that Mrs Laird could function perfectly well when not stressed, he doubted that she was sufficiently robust to withstand the stresses involved in a high pressure job, such as that she was applying for.

Once a person has had an episode of depression there is a significant prospect of them suffering a further such episode, and the risk increases the more episodes of depression there have been. In his report Dr Aylard put that risk at being over 60% in the case of a person with Mrs Laird’s history of three episodes within five years, although in evidence he put it at closer to 70-80%.

Aside from her history of episodes of depression the other aspect of Mrs Laird’s medical history that is of importance is the back injury she suffered in September 2001, as referred to in the medical notes. Mrs Laird had gone on a management course and on 13 September 2001 suffered a back injury, for which she went to hospital, received an intra-muscular injection and an X-ray. She went to see her own doctor about this probably on 19 September 2001 when the back pain was discussed and she was told to keep taking analgesics.

Mrs Laird went back to the surgery on 6 October 2001 for a repeat prescription of Dothiepin. She was not planning to see her doctor but because she was free she went in to see her. The doctor recorded no back pain, prescribed a contraceptive and the continuance of the Dotheipin.

Against that background of her actual medical condition and history I turn to consider whether the answers given in the questionnaire were in fact false, bearing in mind that the questions are addressed to a lay person and are to be understood as a reasonable person in Mrs Laird’s position would understand them:

To the question, “Have you any ongoing medical condition which would affect your employment?”, she replied, “No - nb I get occasional migraine but this does not affect my ability to work or usually require time off from work. (Treated with Zonig)”;

I therefore find that the representations made by Mrs Laird in answer to the medical questionnaire were not false, nor, given the terms of the questions asked, were they misleading.

If, contrary to my above findings, false statements were made I have no doubt that Mrs Laird nevertheless honestly believed that the statements made were true.

For this purpose what matters is Mrs Laird’s understanding of her medical condition rather than her actual condition. Her understanding was that she had suffered attacks of anxiety and stress due to specific events, but not that she had suffered or was suffering from a depressive disorder.

The plausibility of this being her stated of mind is supported by the evidence of CBC’s own expert psychiatrist, Dr Aylard. He explained how people who are in fact suffering from depression are reluctant to acknowledge it and tend to rationalise it in different terms (e.g. stress) and to find reasons to explain it away. This is entirely consistent with Mrs Laird’s state of mind as explained in evidence.

In January 2002 she would have regarded herself as being well and enjoying a good state of health. She had recovered from her last period of depression. Although she was still taking anti-depressants this was because it is standard practice to do so rather than because she needed to do so. Her understanding that it was advisable to be weaned off such medication was entirely correct.

I further find that Mrs Laird’s understanding of her health and medical condition as I have found it to be was a reasonable understanding.

Against the background of that understanding there can be little doubt that Mrs Laird would have believed the answers she had given to be true and correct answers.

Further, in signing the questionnaire Mrs Laird was expressly consenting to her doctor being consulted and she said, which I accept, that she believed this would be done. In such circumstances there would have been no point in lying in the questionnaire, even if she had been inclined so to do, which I find she was not.

CBC place particular reliance on the answers given by Mrs Laird when she applied for the RCT job in April 2000. In that form, she gave the following answers:

CBC submits that this shows that Mrs Laird regarded treatment of mild depression as being “medical treatment” and therefore she must have known that she should have answered the question in the medical questionnaire “Date when you last had medical treatment?” by referring to her treatment for depression. However, for reasons already given, the question in the medical questionnaire was of a more limited nature and was addressing a specific occasion rather than a period of time. In any event, there is no reason to suppose that Mrs Laird could remember or had in mind the questions and answers on the RCT questionnaire when she filled in the CBC questionnaire.

It was suggested that Mrs Laird knew that her treatment for depression was material for her employer to know, as shown by the fact that such disclosure had been made to RCT. It was also suggested that Mrs Laird deliberately kept this quiet because she knew that it would lead to inquiries being made of her GP and thereby threaten her employment with CBC. I reject these contentions. As already found, Mrs Laird in fact expected CBC to take up matters with her GP regardless of the answers given by her. The reason disclosure had been made to RCT was that it was made necessary by a specific question addressed to what medication she was currently taking. This apparently had not concerned them so, if anything, Mrs Laird’s experience with RCT would have led her to believe that disclosure of these matters would not be problematical. Moreover, Mrs Laird in fact thought that she already had employment with CBC, which is a yet further reason why she had no reason to fear disclosure or to lie.

I have taken into account the fact that I have not accepted Mrs Laird’s evidence on certain issues in the case, but for the reasons outlined above she had no particular reason to fear disclosure or lie in relation to the medical questionnaire, still less to do so in the Machievellian way suggested by CBC. Moreover, she was not desperate for the CBC job. She was currently employed; her own preference was for the Ashford job she had applied for; even if neither Cheltenham or Ashford had led to an appointment there were likely to be other job opportunities forthcoming. I accordingly find that Mrs Laird honestly believed the representations made to be true.

The leading authority on the essentials of the tort of deceit remains Lord Herschell’s judgment in Derry v. Peek[1889] 14 App Cas 337 at 376:

The standard of proof required in relation to an allegation of fraud is that of the balance of probabilities. The fact that fraud is a very serious allegation may be relevant to the inherent probabilities of its occurrence, but it does not affect the standard of proof.

In Re H (Minors)[1996] AC 563 Lord Nicholls stated at 586D:

This passage was considered by the House of Lords in Re B (Children) (Care Proceedings: Standard of Proof) [2009] 1 AC 11 and most recently by the Court of Appeal in Dadourian Group International Inc & Others v Simms & Others is [2009] EWCA Civ 169 in which the position was summarised by the Court as follows (per Arden LJ at para 32):

Directing myself in accordance with the authorities, in the light of my findings above I have no doubt that the representations were not made fraudulently, even if false. I also have no doubt that there was no wilful withholding of material matters.

As to whether, on the assumption they were false, the representations were made negligently, there is considerable overlap with the issue of how a reasonable person in Mrs Laird’s position would have understood the questions.

Even if, contrary to my findings, the questions are not to be reasonably understood as I have held, the interpretation I have set out is at least a plausible interpretation of ambiguous questions and I am quite satisfied that it would not be negligent so to interpret them.

Given the ambiguity of the questions asked and Mrs Laird’s reasonable understanding of her medical history, as I have found it to be, it was not negligent of her to answer the questions as she did.

I find that Mrs Laird filled out the medical questionnaire as a reasonable layman might, as Dr McNamara was inclined to accept. She had proper grounds and reasoning for each of her answers. Accordingly she took reasonable care, and did not complete it as no reasonable person would have done (the usual test for negligence). Equally she had reasonable grounds for believing in the truth of the answers she had given.

CBC places particular reliance on Mrs Laird’s evidence that she found some of the questions difficult to understand but did not consult her doctor or GCOHS as the form suggested. However, her doctor was part-time and unavailable; CBC had no human resources department of appropriate personnel to deal with, and all that was given for GCOHS was an address with no telephone number. In any event, she ultimately reasonably concluded that she could complete the form unassisted.

If I had found there to have been an actionable misrepresentation I would not have held that CBC’s remedy was so restricted.

Mrs Laird relies on the wording in the form: “I declare that the statements… are true and given to the fullest of my ability and knowledge and if I have wilfully withheld any material fact(s), I am, if engaged, liable to the termination of my contract of service”. She contends that this amounts to an agreement that the only remedy available is termination.

In my judgment clearer language than this would be required to exclude the remedies that would ordinarily be available as a matter of law for actionable misrepresentation, let alone for fraudulent misrepresentation. This wording is spelling out the potential consequences of misrepresentation or deliberate withholding of material facts, but it is not circumscribing such consequences.

Section 2(1) of the 1967 Act provides that:

Mrs Laird submis that because the medical questionnaire was for the use of CBC’s medical advisor, GCOHS, rather than CBC itself the statements made therein were not made “to” CBC within the meaning of the 1967 Act, GCOHS being a separate entity “acting under some independent role”.

In my judgment this is too narrow an interpretation of the 1967 Act and of the purpose of the representations made. Although the immediate representee was GCOHS, the ultimate representee was CBC since it was for its benefit that the questionnaire was being filled in. GCOHS had no independent interest in assessing Mrs Laird’s medical condition. It was doing so for the benefit of the CBC. In such circumstances I consider and find that the representations were being made to CBC, albeit through the filter of GCOHS.

Further, the words “to him” in section 2(1) do not narrow the class of persons who would be representees in law. There is little doubt that at common law and in equity, the representee did not necessarily need to be the person to whom the false statement was made. As stated in Chitty on Contracts. Vol. 1 at 6-028: “[E]very man must be held responsible for the consequences of a false representation made by him to another, upon which a third person acts, and so acting, is injured or damnified, provided it appear that such false representation was made with the intent that it should be acted upon by such third person in the manner that occasions the injury or loss”; per Lord Cairns in Peek v Gurney [1873] LR 6 HL 377, at 413. It is most unlikely that Parliament intended in the 1967 Act to narrow the class of representees to those to whom a representation was directly addressed. “The Act of 1967 does not ... alter the rules as to what constitutes an effective misrepresentation”: Chitty on Contracts Vol. 1 at 6-001. No good reason has been advanced as to why such an alteration should have been intended and the consequence would be an illogical fissure between the position under the 1967 Act and at common law.

Whether CBC relied on the Representations and/or was induced by them to enter into the Employment Contract;

The representations made in the medical questionnaire led to Mrs Laird being declared fit for employment, on the strength of which CBC decided to proceed with Mrs Laird’s appointment. This is borne out by the correspondence and the formation of the contract as I have found it to be.

It was not until 14 January 2002, after Mrs Laird had been declared fit for employment, that CBC wrote to Mrs Laird informing her that the medical clearance certificate had been received and that “we can now proceed with your appointment”, and the contract was made.

The evidence of CBC’s expert, Dr McNamara, was that if Mrs Laird had disclosed that she had a history of depression, or even that she was taking anti-depressants, then she would very likely have been called in for a consultation with an occupational health advisor, that this would have drawn out the details of her medical history and that her GP would probably have been consulted. The history as reflected in her medical notes would thereby have come out and it was his view that, given the stressful and highly pressurised nature of the job she was applying for, she would probably have been declared not medically fit for the post. The possibility of reasonable adjustments for the purpose of the DDA would have been considered, but it would have been concluded that such adjustments were not practicable given Mrs Laird’s history and the demands of the job.

Mrs Laird did not call any expert occupational physician to counter Dr McNamara’s evidence and I largely accept that evidence. I find that GCOHS would essentially have acted as Dr McNamara suggested. I consider that, rather than concluding that she was unfit for the job, GCOHS would have concluded that she may be fit to carry out the job, but that given her history there were risks in her so doing. However, whichever conclusion was reached there is little doubt that the council would have concluded that it was not appropriate to offer her the job.

Given the closeness of the vote in favour of Mrs Laird over Mrs Garner it is apparent that any doubts raised as to her medical capability to fulfil the job would be likely to have made a real difference, as was indeed the evidence of a number of CBC witnesses.

The minutes of the council record that:

the vote between Mrs Laird and Mrs Garner recorded a majority of only one vote (18 votes to 17) in Mrs Laird’s favour;

therefore if only one member out of 35 would have changed his or her vote, the result would have been a tie;

if only two members out of 35 would have changed their vote, the post would have been offered to Mrs Garner and not Mrs Laird;

the council resolved that Mrs Laird be offered the post; and

the council resolved that if Mrs Laird did not accept the position, it should be offered to Mrs Garner.

It is sufficient for CBC to prove that the representations made were one of the inducing causes of the contract. It is not necessary to show that it was the sole inducing cause.

I am satisfied that CBC have discharged that burden. Mrs Laird submits that it was necessary for CBC to prove what it would have done if the false representation had not been made. I do not accept that this is necessary, but, if it is, I find that CBC would have employed another managing director. Whether, as CBC contends, that would have been Mrs Garner, is considered further below.

Mrs Laird further contends that in considering the issue of inducement one should have regard to the fact that if she in fact had an “impairment” and had made a misrepresentation in stating otherwise it follows that CBC would have been in breach of duty under the DDA if it refused to employ her, and that this makes it likely that she would have been appointed regardless. Even if it was right that CBC would have been in breach of its duty under the DDA in refusing Mrs Laird employment, which, for the reasons discussed further below I find not to be the case, I do not accept this would have materially influenced CBC’s decision. This was too important a job for CBC to take on someone with a significant impairment, even if refusing to do so would have involved a breach of the DDA and a potential liability to pay compensation. I therefore do not consider that this affects the issue of inducement.

In order to establish a claim under the DDA, the employee would have to be “disabled” within the meaning of the DDA; the employer would have to know the facts establishing the disability; the employer’s treatment of the employee by not employing her would have to be unjustified; and the job would have to be reasonably capable of adjustment; see Hammersmith and Fulham LBC v. Farnsworth[2000] IRLR 601, EAT; Quinn v. Schwarzkopf Ltd[2002] IRLR 602, Court of Session (Inner House); Malcolm v. London Borough of Lewisham[2008] 1 AC 1399, HL.

In her witness statement at para 870 Mrs Laird stated, after mentioning the statutory test for disability: “I first became disabled and therefore entitled to the protection of the Disability Rights Act [sic] in March 2004, during my employment with the Claimant”. Thus it is her own evidence that she was not disabled within the meaning of the DDA in early 2002 and this accords with the views of both sides’ experts.

In such circumstances, it is doubtful that it would be open to Mrs Laird to contend otherwise, and ultimately it was common ground that she was not “disabled” at that time and therefore that there would have been no breach of duty.

After the close of the hearing Mrs Laird sought to raise a further argument that even if she was not disabled in early 2002, she would or may have had a “past disability” within the meaning of the DDA. It is too late for this further argument to be raised and it is not open to Mrs Laird. In any event, it was not explored in the evidence and has not been proven.

In the light of the answers given in the medical questionnaire I find that it was not unreasonable of CBC and GCOHS to fail to seek further details of Mrs Laird’s medical history. The answers given did not suggest that she suffered from any serious medical condition and in those circumstances there was reasonably considered to be no need for further inquiry.

This issue turns on whether, if Mrs Laird fraudulently misrepresented her medical history in her answers to the medical questionnaire, CBC could with reasonable diligence have discovered the fraud by 16 December

There was a major factual dispute as to whether and if so to what extent Mrs Laird made verbal disclosures to individuals at CBC about her past state of health. She claimed that she had informed various individuals about her earlier mental breakdown in 1997 whilst at the CIH. None of the identified witnesses could recall this. I find that she had discussions with various work colleagues about job stresses and work/life balance and mentioned that she had been unwell whilst at the CIH, but I am not satisfied that she specifically told anyone that she had suffered a breakdown until some considerable time into her employment and certainly after 16 December 2002. The first mention of this fact in any document does not occur until considerably later.

Even if she had mentioned her breakdown at an earlier stage, I am satisfied that she did not do so in terms that should have put CBC on inquiry. It is to be noted that Mrs Laird does not allege that she told anyone at CBC that she was or might be medically unfit, that she suffered from depression or that that she was taking anti-depressants.

In the above circumstances, I find that CBC was not put on notice of any facts which ought to have alerted it in 2002 to the likelihood that the answers given in the questionnaire were false and fraudulent. Even if, contrary to my findings above, Mrs Laird made CBC aware that she had had a mental breakdown or other psychiatric or psychological problems in the past, CBC had no reason in 2002 to suppose that its new managing director had made false representations to GCOHS.

Further, even if CBC had been on notice, as events later showed, it would have required a Norwich Pharmacal order to obtain the medical questionnaire. However, CBC could not have obtained a Norwich Pharmacal order against GCOHS by 16 December 2002. The application would have to have been made by about September 2002, but there was nothing remotely resembling a potentially litigious dispute at that stage.

By the same reasoning such an application, even if it could have been made in about September 2002, would not have been granted; especially as it would require a breach of GCOHS’s duty of confidentiality: cf. Koo Golden East Mongolia v Bank of Nova Scotia[2008] QB 717, CA, per Sir Anthony Clarke MR at paras 34-38 and 49-51.

Finally, Mrs Laird contends that CBC is to be imputed with knowledge of what its alleged agent, GCOHS, had been told by Mrs Laird. I reject this contention. GCOHS had no duty to communicate the contents of the questionnaire to the Council and a court order was necessary to require them to do so later. CBC had no right to see the completed questionnaire without a Norwich Pharmacal order.

Mrs Laird contends that CBC made misrepresentations to her at the time of her engagement, in failing to inform her that elements of the council were strongly opposed to the introduction of a business culture and associated restructuring and that the council had been split as to her employment. She says that she would not have accepted this employment had she known of such material matters and not been misled by the council’s presentation of the situation to her.

I do not accept that the position was anything like as black and white as claimed by Mrs Laird, or that any representation was made as alleged or at all.

Whilst it is true that the vote to offer the post to Mrs Laird was carried by one vote, I do not consider that there was any duty so to inform Mrs Laird . The vote was carried and the vote was that of the council. How that vote was made up was an internal matter confidential to the council and is not a matter which would ordinarily be expected to be told to a successful candidate. Indeed, all CBC’s witnesses to whom this was put stated that they had never heard of a successful candidate being given the voting figures. Further, following the vote there was a unanimous resolution to offer the post to Mrs Laird.

Moreover, bare voting figures alone would tell a candidate little: a wide margin might mask the fact that there was a small minority that was bitterly opposed to the successful candidate, while a narrow margin would be consistent with all councillors thinking both candidates would do an excellent job.

The suggestion that there was strong opposition to the proposed new business culture and restructuring is an oversimplification. As matters turned out, a number of councillors had reservations as to how the restructuring was to be implemented, but at the time of Mrs Laird’s appointment there was no strong opposition to the principle of restructuring. Even if there had been, and even if this had been widely known, which it was not, I do not consider there was any duty so to inform Mrs Laird.

Further, there is an air of extreme unreality about the case sought to be made. The head of paid service is required to be politically impartial and to support the agenda of whichever party or coalition is in power. The local electorate determines that issue. Elections were scheduled for May 2002, as Mrs Laird knew. As a result of a review of ward boundaries, the whole council was to stand for election. The recruitment pack made this clear and stated the then current political composition of the council. The post for which Mrs Laird was applying was politically restricted under the 1989 Act. If political changes meant changes to CBC’s policy on the issue of restructuring then that is something she would be expected and would have to deal with. It was part and parcel of the job she was taking on.

Finally, Mrs Laird’s case on this issue appears to assume a duty of disclosure but this was not a contract of a nature involving any duty of disclosure. In so far as it was alleged that there was some implied representation, or an implied representation giving rise to a duty to correct it, I do not accept that any relevant or sufficient representation of fact has been established.

In the List of Issues the alleged breaches of duty were stated to be as follows:

Mrs Laird relies on her claim for damages for these alleged breaches of duty in a purely defensive manner. If and to the extent that she was found liable to CBC in damages she seeks to set off her own damages claim to extinguish or reduce CBC’s claim.

In the light of my conclusion on liability, it is therefore not strictly necessary to determine this cross claim. However, in deference to the evidence given and the arguments made I shall express my principal conclusions on her claim.

As set out further below, for the most part I do not accept Mrs Laird’s allegations of breach of duty against CBC.

Further, if and to the extent that Mrs Laird can prove a breach of duty by CBC, she cannot prove that any distinct loss was caused thereby.

Mrs Laird claims that CBC’s wrongdoings have caused or exacerbated her pre-existing psychiatric difficulties. However, no schedule of loss has been provided in support of this contention nor has any evidence been provided which proves a link between such difficulties and any specific breach alleged or established.

Mrs Laird’s approach is to allege that each of the breaches alleged by her have caused or contributed to her loss and damage, without seeking to differentiate between them. If she proved her entire case then such an approach might be sustainable, but as soon as she fails to prove parts of her case then it runs into evidential difficulties.

The major cause of the exacerbation of Mrs Laird’s psychiatric difficulties whilst at CBC was her conflict with Cllr McKinlay and the pursuit by him of his complaints through the JNC process. If Cllr McKinlay’s statements and actions and the pursuit of the JNC proceedings did not involve a breach of duty by CBC then even if breaches of duty in other respects could be proved it would not be possible to establish that any distinct loss and damage had been caused thereby. Similarly, even if some of Cllr McKinlay’s statements or actions did involve a breach of duty, if many or the majority of them did not do so, then again it becomes difficult to prove any loss.

In the light of the factual findings I have made in relation to the history of Mrs Laird’s employment, and as further set out below, I am not satisfied that the JNC proceedings involved any breach of duty on CBC’s part, nor that the statements and actions of Cllr McKinlay involved any such breach of duty. In those circumstances the claim for damages made fails.

Whilst, I shall address Mrs Laird’s allegations of breach, given (1) that she has succeeded on liability and (2) my conclusion that her damages claim fails in any event, I do not propose to do so in great detail. Save where otherwise indicated below, I essentially accept CBC’s case on breach.

In relation to Mrs Laird’s case on breach I indicated during the course of the trial that a number of the allegations made were inadequately particularised and I required Mrs Laird to set out a properly particularised case. A detailed document was then produced which set out a wide range of duties and alleged breaches of duties. CBC took objection to a number of the further detailed factual allegations thereby being made. In so far as the detailed document raised allegations against individuals who had not previously been identified in the pleadings, and therefore who CBC had not had cause to proof or to consider as witnesses, I accept that it is too late for them to be raised at trial.

As far as CBC’s duties are concerned, its main relevant general contractual duties are as follows:

A duty that it will not, without reasonable and proper cause, conduct itself in a manner likely to destroy or seriously damage the relationship of trust and confidence and trust between employer and employee (“the trust and confidence term”).

A duty to take reasonable care for the health and safety of Mrs Laird (“the welfare term”).

Breach of the trust and confidence term is repudiatory – see Morrow v Safeway Stores[2002] IRLR 9. The conduct of the party in breach must therefore be serious, not trivial. Viewed objectively, the conduct must be “likely” either to “destroy” or at least to “seriously damage” the relationship of trust and confidence.

In relation to the duty of trust and confidence Mrs Laird contended for a number of specific consequential duties, such as a duty to treat her with respect, not to act unreasonably towards her, not to leak information to the press, not act so as to undermine her etc. In my judgment these are more properly regarded as instances of alleged breaches of the trust and confidence term, rather than free standing contractual obligations.

In relation to the welfare term, which is the contractual counterpart of the duty of care in tort, Mrs Laird contended for further specific duties such as a duty to use all reasonable care to provide a safe place and system of work in accordance with the Health and Safety at Work Act 1974 (which does not sound in damages) and a duty to use all reasonable care to avoid statutory harassment. In my judgment these are relevant to the general duty of care imposed by the welfare term and the alleged breach thereof rather than being of independent significance.

It has been held that the “trust and confidence implied term means, in short, that an employer must treat his employees fairly” – per Lord Nicholls in Eastwood v Magnox Electric plc[2005] 1 AC 503 at p523G. The duty to act fairly may have particular significance in relation to grievance and disciplinary procedures and I accept that CBC was under a duty to operate those procedures in a fair manner so as not to destroy or seriously damage the relationship of trust and confidence. Mrs Laird contended for a number of further specific duties such as a duty not to include new complaints, a duty to permit Mrs Laird to attend all JNC Panel meetings, a duty to formulate fully particularised charges etc. Again, in my judgment these are more properly regarded as being instances of alleged breaches of the duty to act fairly, rather than free standing obligations, and will be considered in that context.

There were also a number of specific contractual provisions which Mrs Laird alleged to have been breached. These will be considered below in the context of the allegations of breach of duty.

In relation to a number of the allegations of breach of duty one general issue which arises is the circumstances in which CBC will be responsible for the acts of the leader, cabinet or councillors.

In so far as Mrs Laird is relying on a tortious cause of action she must establish that CBC is vicariously liable for the wrongdoing. In the present context, it was accepted that the applicable test is that set out in Moores v. Bude-Stratton TC[2001] ICR 271 per Lindsay J at para. 23:

In essence, there will be vicarious liability where the tortious act of the individual is an act which can fairly be attributed to CBC, on the basis of “Councillors having particular delegated duties in relation to its employees” ibid., para 29.

In so far as Mrs Laird is relying on a contractual cause of action, an individual councillor owes no free standing duty as an individual to observe the employer’s “trust and confidence” obligation: see Lindsay J in Moores at paras 27-29. However, there may be cases in which, “perhaps, Councillors having particular delegated duties in relation to its employees may, in particular cases, be in a different position”: ibid., para 29.

In the present case, the parties to the employment contract are Mrs Laird and CBC which is a statutory corporation. For the purpose of assessing whether there is a breach of (a) the trust and confidence term or (b) the welfare term, the question should be whether the wrongful act complained of can properly be described as the act of “the council”.

What constitutes “the council” for this purpose is a question of fact and degree. In a normal employment case not involving the most senior officer, the council’s more senior managers would or would not personify “the council”, depending on whether they were acting in the course of their employment. Where the employee concerned is the most senior officer, “the council” means “those who direct its mind and will”.

Depending on the circumstances, “those who direct its mind and will” may include the executive, but only when acting as the executive exercising employment functions in relation to the managing director’s employment; and not when acting in a purely political capacity; nor where the expression “the executive” is used merely to describe the sum of each individual member of it. The question is not just as to the identity of the persons under consideration, but also as to the issue being considered.

For example the monitoring officer, though in the present case a subordinate of the managing director, would not by himself normally be considered to be “the council” vis-à-vis the managing director. But the monitoring officer could perhaps personify “the council” if the issue was one which engaged his statutory functions as monitoring officer.

As CBC accepted, in the context of dealing with the managing director’s employment position, “the council” includes the executive where acting as such, and it could in some circumstances include a smaller cohesive political grouping such as the leader, deputy leader and a few key executive members, who may de facto exercise political control over the council via their domination of its executive. But “the council” would not normally include opposition leaders, nor individual subordinates of the managing director.

Against the above background, each of the alleged breaches of duty will now be addressed in outline terms.

Out of the myriad of allegations raised by Mrs Laird under this heading, the principal matters that in my judgment gave rise to a potential case of breach of the trust and confidence and/or welfare term were as follows:

In setting out the history of Mrs Laird’s employment I have made a number of findings that bear on each of these allegations. With those findings in mind, I shall briefly address and set out my conclusion in relation to each of these allegations.

the meeting between Mrs Laird and Cllr McKinlay on 3 May 2002;

In the light of my findings as set out in paragraphs 88 to 90 above, I do not accept that Cllr McKinlay acted in a bullying, intimidating or inappropriate manner at this meeting. This was a vexed meeting at which firm disagreement with Mrs Laird’s position was expressed by Cllr McKinlay and at which he may well have indicated that he regarded her as being too closely associated with the Conservative party, but I do not accept that he spoke in the terms set out in the note relied upon by Mrs Laird and in her evidence. I accordingly do not find any breach of duty proved in relation to this meeting. Nor do I find any such breach of duty proved in relation to the earlier meetings between them on or about 25 February 2002 and 2 April 2002, which are addressed at paragraphs 84 to 87 above. In any event, at the time of such earlier meetings Cllr McKinlay was not leader of the council and was not acting in an employer role.

In the light of my findings at paragraphs 100 and 101 above, no breach of duty in relation to this meeting has been proved. Cllrs McKinlay and Stuart-Smith did not tell Mrs Laird that she should consider her position and although they did not send round a written memo of support, as had been agreed, Cllr McKinlay did express such support orally to the heads of service.

In the light of my findings at paragraphs 98 to 99, 103 to 106 no breach of duty has been proved in relation to this matter. However unjustified Mr Webster’s complaints may have been, they needed to be addressed and it was sensible for them to be referred to Mr Ford. Whilst it may not have been necessary to involve SWRA in investigating Mr Webster’s further complaint, I do not find, as was alleged, that this was done by Cllr McKinlay as part of a vendetta against Mrs Laird in support of his friend. Cllr McKinlay rightly considered that an investigation was required if these complaints were ever to be put to rest, as ultimately they were. Nor do I find that Cllr McKinlay spoke inappropriately to Mrs Laird at their meetings concerning these matters; if anything, it was the other way round.

I refer to my findings at paragraphs 108 to 109 above. Whilst it would have been preferable if Cllr McKinlay had avoided saying anything about feeling physically sick, what he said was a statement of fact rather than an insult. If it had been an insult, it would have been a breach of the trust and confidence term, but I do not find that to be the case.

I refer to my findings at paragraphs 115 to 117 above. In my judgment it was a breach of the trust and confidence term for Cllr Stuart Smith to meet with Mrs Laird and to open that meeting by asking “What would it take for you to go?”. In the context of mutual ongoing discussions about the future of Mrs Laird’s employment such a comment might have been justifiable, but this statement was made before it was agreed that there should be any such discussions. At the time Cllr Stuart-Smith was acting with delegated authority on behalf of the cabinet and thereby CBC. However, I do not find that any loss has been proved as a result of this breach.

I refer to my findings at paragraphs 126 to 128 above. The offers that were made were exploratory offers in the context of ongoing discussions, rather than formal or binding offers. As such, I do not find that any breach of duty was involved either in making them or in their terms.

This was a matter of serious concern throughout Mrs Laird’s employment. Confidential matters concerning council business would frequently end up in the Echo. It is fair to say that this appears to have been done by supporters as well as opponents of Mrs Laird. If it could be established that such leaks were being carried out to undermine Mrs Laird by named individuals who could be identified with CBC then that would be a breach of the trust and confidence term. However, there are real difficulties of proof.

In her pleadings Mrs Laird did not identify named individuals, and to the extent that she sought to do so during the course of the trial I do not consider that to be open to her. This means that it is not possible for vicarious liability to be proved. Unless one knows who is doing the leaking and the circumstances in which it is being done, it is difficult if not impossible to determine whether an act of the council is involved.

The closest one comes to identification of any individual is in relation to the letters and emails referred to in paragraphs 139 and 141 above. It was alleged that this was done by Cllr Fidgeon who was involved with Mr Nigel Jones MP’s office, from where the “Daphne-Townsend” emails were said to have come. However, this was not pleaded, Cllr Fidgeon was not called and it was therefore not possible for this issue to be explored properly.

In the light of the generalised nature of the pleaded case and the evidence I am not in a position to make any findings of breach of duty in relation to these matters.

I refer to my findings at paragraphs 143 to 146. If this conversation had been deliberately allowed to be overheard by Cllr McKinlay then that would be a breach of the trust and confidence term. However, quite properly on the evidence, no such case was put to him.

CBC accepted vicarious liability for Cllr McKinlay’s careless mistake in failing to switch off his mobile phone but I do not consider that mere carelessness in this context suffices to establish a breach of the trust and confidence term.

As to the content of the discussion. Cllr McKinlay was speaking to Ms Fallon in her capacity as the most senior director available and acting managing director. It was a frank and frustrated expression by Cllr McKinlay of his views, done in an attempt to find some way forward, rather than to undermine.

I do not find the alleged breach of duty proved either in the content or the allowed overhearing of the conversation.

Mrs Laird alleged that Cllr McKinlay made bullying and/or undermining comments to her on a number of occasions. As set out in my findings, I accept that he spoke to her forcefully from time to time, and that on occasion he overstepped the mark, as for example following the meeting of 30 September 2002, referred to in paragraph 112. However, I do not find that there was any campaign of bullying or harassment, or a sufficient course of conduct to constitute a breach of the trust and confidence or welfare term.

Mrs Laird also alleged that Cllr McKinlay spoke critically of her to staff and thereby undermined her position. I accept that on occasion he was critical of her, just as she was of him, as, for example, in her reported comments referred to in paragraph 93. However, I am unable to find specific examples of such comments that would be sufficient to constitute a breach of the trust and confidence term.

CBC had a contractual responsibility for arranging Mrs Laird’s appraisals. It is the fact that appraisals were not arranged in 2003 and 2004. However, I accept CBC’s case that it made genuine attempts to arrange an appraisal in February 2003 until those attempts were overtaken by events which rendered any such appraisal impracticable and of little value. I also accept that Mrs Laird’s interest in the appraisal had a tactical element, because she thought her defences against disciplinary process was impregnable as long as the 2003 appraisal had not been done. Moreover, on 5 January 2004 Mrs Laird expressly waived her right to an annual appraisal in 2003. In relation to 2004, in so far as Mrs Laird was at work it was for the purpose of dealing with the JNC proceedings and an appraisal would have served little purpose. I am not therefore satisfied that CBC acted unreasonably or unfairly in relation to Mrs Laird’s annual appraisals, or that the failure to have such appraisals involved any breach of the trust and confidence or welfare term.

In relation to all the other matters relied upon by Mrs Laird under this general heading I do not find any breach of duty proved and accept CBC’s case in relation thereto.

This was alleged to be a breach of CBC’s duty of care and of its duty to operate the JNC procedure fairly.

Recourse to mediation is not a contractual right of the employee. It is an option but not an obligation. It takes two to mediate and very often one party will take the view that it would serve no useful purpose. In this case there were reasonable grounds for taking that view. In particular mediation could reasonably be considered to be inappropriate given: (1) that the breakdown in relations between the elected leader and cabinet and the chief executive was reasonably regarded as being irretrievable; (2) the need to protect subordinate staff who were suffering or could suffer stress (principally Mr Huckle, Ms Fallon, Mr Perry, Mr Ford, Mrs Watson and Ms Pitman) or who had made allegations in good faith against the chief executive; (3) that complaints to the SBE could not necessarily be withdrawn and, even if they could in practice be withdrawn, there was no indication that Mrs Laird would be willing to withdraw them.

Failing to have and then to implement properly and fairly and with the correct results a Grievance Procedure;

The contract provided no specific grievance procedure. However, there is no contractual obligation to have any grievance procedure. There is a statutory obligation to produce a written statement of particulars of employment within two months of the start of employment: section 1(1) and (2) of the Employment Rights Act 1996. By section 3(1)(b)(ii) and 3(2) the statement is required to include a note specifying by description or otherwise a person to whom the employee can apply for the purpose of seeking redress of any grievance relating to her employment, other than a grievance relating to health or safety at work.

The only remedy for breach of the obligation is that by section 11 the employee may apply to an employment tribunal during the employment or within three months after it has ended, requesting the tribunal “to determine what particulars ought to have been included or referred to in a statement so as to comply with the requirements ...” (section 11(1)). Thus, Mrs Laird could have obtained a tribunal decision on the point, but did not do so. Further, her written contract dated 2 August 2002 contained a provision deeming that contract to be the statutory written statement of particulars.

In so far as Mrs Laird sought to suggest that the grievance procedure later provided was not proper or fair, I reject that contention. On the contrary CBC was scrupulous in the setting up and carrying out of the hearing of her grievance and acted with commendable despatch.

After Mrs Laird brought her grievance on 16 October 2003, Mr Peter Lewis devised an ad hoc procedure which was fair and detailed as set out in his letter to Mrs Laird’s solicitors dated 28 October 2003. The panel members went on a training day before sitting. The procedure was operated fairly and, significantly, without dissent.

The grievance was heard fully over four days in the period from 13 November to 2 December 2003. Mrs Laird was represented by her solicitors and was able to question witnesses and make submissions both personally and through her solicitor. The proceedings were transcribed. The Grievance Panel was chaired by a solicitor and Conservative councillor, Cllr Melville-Smith.

The Grievance Panel produced a written report of its findings dated 18 December 2003 which was presented to the full council. The Panel recommended dismissal of three complaints, upholding one in part, and deferring two others until the SBE investigation was completed or Mrs Laird had pursued a claim for defamation. The full council adopted the findings of the Grievance Panel. There was nothing unfair or unlawful about the conduct of the grievance proceedings.

There is no basis for the suggested obligation on a Grievance Panel to reach the “correct results”. The Grievance Panel’s function was to consider and determine the grievance in good faith and not for an ulterior purpose; and this was not a free standing contractual obligation but only a facet of the employer’s general obligation to abide by the trust and confidence term. I am satisfied that they did consider and determine the grievance in good faith and not for an ulterior purpose.

Finally, Mrs Laird contends that the Grievance Panel was not politically balanced. This was not a contractual requirement, but in any event I accept CBC’s contention that the Grievance Panel is to be regarded as being an “ordinary committee” of CBC.

An “ordinary committee” of a local authority is one to which the “political balance” requirements set out in section 15 of the 1989 Act apply. As such, it must be politically balanced in the sense enacted by section 15; see section 15(7), section 16, schedule 1 para 1(a), para 4(1) and Local Government Act 1972 section 102(1).

Broadly, the membership of the committee must be proportionate to membership of political groups represented on the authority as a whole. The Grievance Panel was so proportionate and therefore was “politically balanced”.

There are two main aspects to Mrs Laird’s case in regard to the JNC proceedings. First, that they were unfounded and that CBC was in breach of duty in bringing them or allowing them to be brought. Secondly, that the way in which they were constituted and conducted was unfair and unlawful.

In relation to the merits of the complaints made in the JNC proceedings, the complaints were made by Cllr McKinlay, Mr Ford and Mrs Watson. CBC is not responsible for the raising of those complaints. CBC’s only involvement in the merits of those claims was in deciding that there was sufficient in the complaints to justify the appointment of a JNC Panel, in the JNC Panel’s report itself, and in the decision that, in the light of the JNC Panel report, there was a disciplinary case to answer which a DIP should be appointed to investigate. In the substantive decisions made thereby CBC could only be in breach of duty if it could be shown that the decisions thereby made were made in bad faith or for an ulterior purpose, which I do not find to be the case. I do not accept that they owed any duty in relation to the correctness or otherwise of such decisions.

It is therefore not necessary to seek to make any ruling on Cllr McKinlay’s various complaints and I do not propose to do so, although I have made various findings of fact of relevance to them in relation to witnesses whose evidence I heard. There were a number of other relevant witnesses from whom I did not have evidence.

In relation to the constitution and conduct of the JNC proceedings. CBC owed a contractual duty to comply with the JNC procedures laid down in the contract, namely clause 16 of the JNC conditions. In so far as these contractual provisions were breached CBC would be in breach of contract.

CBC also owed a duty to operate the JNC procedures fairly in the sense already described and the terms of the contractual procedure would be highly relevant to that duty. The duty of fairness is not an absolute and what it requires in any given case will depend on the context in which it arises.

In this case the most relevant context is clause 16 of the JNC Conditions which has already been set out.

It is to be noted that the first reference made in clause 16 to notice being required to be given to the chief executive is once the preliminary investigation has commenced (clause 16.11) – i.e. after the panel to investigate whether a question of discipline exists which could not be resolved informally has been appointed.

In the above circumstances, I consider that in so far as there was anything required by the duty of fairness prior to the appointment of the JNC Panel itself, it would be limited to providing an outline of what the complaints were and giving Mrs Laird an opportunity to state whether there was any clear and demonstrable reason why they did not justify or qualify for the appointment of a JNC Panel.

In relation to the JNC proceedings themselves I consider that the essence of what the duty of fairness required was identification of the proposed charges and an opportunity to address them before deciding whether or not there was a case to answer.

As to apparent bias, the scope of the common law rule against bias and its application to the facts of a particular case depends on what the facts are, as does the content of the obligation to act fairly in a particular case: see e.g. R. v. Avon County Council ex p. Crabtree, CA transcript, 15.11.95, per Neill LJ at pp. 11-12 and 15-19; de Smith’s Judicial Review (6^th edition, 2007), at pp.359-362; Fordham, Judicial Review Handbook (5^th edition, 2008), at pp. 321, 597-602.

Where an investigating body is acting in a policing role, looking into whether suspicions of wrongdoing are justified by what they find, “it is wholly inappropriate for the case to be approached in the same way as one would approach a person performing a normal judicial role or quasi-judicial role; a situation where the person is making a determination”: per Woolf J in R v. Secretary of State for Trade ex p. Perestrello[1981] 1 QB 19, at 35B-C; although an investigating body must act in good faith and not for any ulterior purpose: ibid. at 35E-G.

Further, in the context of planning applications it has been observed that “the test of apparent bias relating to predetermination is an extremely difficult test to satisfy”: per Longmore LJ at para 109 in R (Lewis) v. Redcar and Cleveland Borough Council[2009] 1 WLR 83, CA, recently applied in the different context of a school reorganisation by Forbes J in R (Chandler) v. London Borough of Camden[2009] EWHC 219 (Admin) at paras 62-63.

As to the political composition of the JNC Panel, Mrs Laird alleged that the JNC Panel was not “politically balanced” as required by the JNC conditions. However, the JNC Panel, like the Grievance Panel, was an “ordinary committee” of the council, and as such it was required by statute to be politically balanced in the sense that its composition was required to reflect the proportion of seats held by each political group on the council as a whole. The words “politically balanced” in JNC Condition 16.9 mean the same as in section 15 of the 1989 Act, which is prefaced by the subheading “Political balance on committees etc”.

I have made various findings in relation to the JNC proceedings when dealing with the history of Mrs Laird’s employment.

I find that CBC should have provided details of Cllr McKinlay’s allegations to Mrs Laird earlier than they did. However, sufficient details of the allegations were eventually provided on 28 July 2003. This was three months before the JNC Panel was appointed, which was more than sufficient time for Mrs Laird to respond, particularly bearing in mind that the only question at that stage was whether a question of discipline had been raised.

Once the JNC Panel was appointed Mrs Laird was given ample opportunity to address the charges made. She was provided with the main complaints and the material relating to them by the end of December 2003. The JNC Panel did not finally determine to recommend the appointment of a DIP until 25 May 2004, nearly five months later. During the intervening period Mrs Laird had plenty of time to make such written and oral representations as she wished.

It is true that the charges were revised and that the supporting materials were not initially presented in a helpful manner. However, Mrs Laird was aware of the essence of the allegations being made against her from an early stage and indeed on 12 January 2004 put forward a substantial response to them together with 600 pages of supporting documents. A further response was provided by her on 4 March 2004 together with 100 pages of supporting documentation. Whilst Mr Coopey’s report was not provided to Mrs Laird until 11 May 2004, his report largely consisted of refining existing allegations and evidence with which Mrs Laird was already familiar. She was given the opportunity to respond in writing and orally to that report and I am satisfied that the time allowed was sufficient for this to be done. I reject Mrs Laird’s contention that she should have been given yet further time and that the meeting of 25 May 2004 should have been adjourned.

Mrs Laird was invited to various JNC meetings at which any concerns she had could be expressed, notably on 15 January, 15 March, and 25 May 2004. CBC also went to considerable trouble and expense to ensure that the proceedings were conducted properly, as demonstrated by the involvement of Mr Brady, Ms Farooqi and latterly Mr Coopey.

In all the circumstances, I do not find that any breach of the duty of fairness has been proved.

Nor do I find that any case of apparent bias has been made out. The Panel was “politically balanced” as required by the contract and no case of apparent bias can be made on the basis of the resulting political composition of the Panel. Nor do I accept that the Liberal Democrat members were actually or apparently predisposed against Mrs Laird as alleged or at all. All the Panel members approached their task fairly and conscientiously, including Cllr Hale against whom a specific allegation of pre-determining the issues was addressed, which allegation I reject.

Mrs Laird alleges in effect that she was suspended without good cause. Any suspension must be in accordance with Local Authorities (Standing Orders) (England) Regulations 2001 (SI 2001/3384), schedule 3, para 3 - i.e. it must be for the purpose of investigating the alleged misconduct occasioning the action; and any such suspension must be on full pay and terminate no later than the expiry of two months beginning on the day on which the suspension takes effect.

At its meeting on 19 March 2004 the council rightly refrained from deciding to suspend Mrs Laird (with the benefit of advice from Mr McGregor QC) because it did not then have evidence of a risk that Mrs Laird might interfere with the investigation. However, shortly before the meeting that day Mrs Laird instructed Mr Thompson (in the event that she was suspended) to remove and delete certain emails from her personal computer.

I am satisfied that the council was entitled to conclude that this gave rise to a reasonable suspicion that she might interfere with the investigation into her alleged misconduct. The council wrote to Mrs Laird on 4 June 2004 (with her injunction proceedings pending and having given a temporary undertaking) offering her the opportunity to make written representations as to whether or not she should be suspended and enclosing the relevant documents including the email instruction to Mr Thompson.

Mrs Laird’s solicitor made copious representations in his letter of 11 June 2004, the same day as the failed injunction application. These were considered by the council at its meeting on the evening of 11 June 2004, together with the relevant documents and report. The outcome was that the council decided to suspend Mrs Laird, as recorded in the letter dated 11 June 2004 from Mr Peter Lewis to Mrs Laird. I am satisfied that that decision was lawful and involved no breach of duty by CBC.

Mrs Laird’s suspension was required to be on full pay, and therefore actually protected her against any reduction to half pay or less which might otherwise have resulted from her prolonged sickness absence. She remained on full pay for over a year until the frustration of her contract on 9 August 2005. The DIP repeatedly directed that her suspension should continue, but there appears to be no criticism of his various decisions to do so; nor, understandably, were they opposed at the time.

Mrs Laird alleges that someone invaded, unreasonably and unfairly, her office and searched her handbag and a personal file, and took and copied private and personal materials and documents, and so as to cause her alarm and distress. On the evidence I am not satisfied that any inappropriate search, copying or taking occurred.

In circumstances where an employee is suspended for the purposes of carrying out an investigation into alleged misconduct, the employer’s obligations under the Human Rights Act are discharged by appropriate steps to safeguard the personal possessions of the employee and to ensure that legally privileged documents or genuinely private correspondence or other documents are not inadvertently seen by the employer. That is what CBC did.

On 16 June 2004 Mr Peter Lewis wrote to Mr Laird about his wife’s personal effects. The next day Mr Lewis wrote to Mrs Laird’s solicitors detailing the steps taken and to be taken to safeguard Mrs Laird’s personal possessions and privacy. The steps taken involved: (i) making enquiries into Mr Laird’s allegations; (ii) restricting access to Mrs Laird’s office; (iii) securing it and changing the locks; (iv) ensuring that only Mr Lewis had the keys; (v) instructing junior counsel to peruse and remove privileged or private documents from the CD taken of Mrs Laird’s work – not “personal” - email accounts.

No substantive response to Mr Lewis’ letter of 16 June 2004 was ever received nor was any complaint from Mrs Laird or her solicitors made. By 3 November 2004, Ms Iyengar had removed material from the email accounts which she advised that CBC should not see by reason of privilege or interference with private life. That procedure was sensible and protected Mrs Laird against any invasion of privacy.

In all the circumstances I am satisfied that CBC did not act unlawfully as alleged or at all in relation to Mrs Laird’s private possessions.

The essence of Mrs Laird’s case was that the processing of Mrs Laird’s application to retire early and receive an ill health pension, was unreasonably delayed.

In this connection, it should be borne in mind that where a public body has grounds to believe that disciplinary offences have been committed by a senior officer and the officer wishes to retire early, the body needs to balance the public interest in allowing retirement against the public interest in pursuing the disciplinary proceedings to their conclusion. The employing body is not obliged to dispense with the incomplete disciplinary process and there is a risk of acting unlawfully if it does so without adequate cause: see R (Coghlan) v. Chief Constable of Greater Manchester[2005] 2 All ER 890 per Wilkie J at paras 45, 49, 54 and 62-65; cf. see R v. Chief Constable of Devon and Cornwall ex p. Hay[1996] 2 All ER 711 per Sedley J at 725a-d.

CBC strongly disputed that it unreasonably delayed agreeing to ill health retirement. In this regard I make the following findings in addition to those set out at paragraphs 175, 191, 199, 218, 222, 225, 229 and 231 above :

Mrs Laird sought to limit the source, content and purpose of medical evidence that would be available to CBC and this made it very difficult for CBC reliably to ascertain Mrs Laird’s true medical state until May 2005.

Mrs Laird failed to provide expert medical support (as distinct from Dr Mulrenan, a GP not a psychiatrist) for the episodes of hyperventilation and panic attacks on which she was relying and which she relayed to Dr Mulrenan.

Dr Philipp did not report that Mrs Laird was permanently unfit and therefore met the test for ill health retirement. He recommended in December 2004 that an independent psychiatric assessment and report from Dr Aylard should be obtained.

Mrs Laird was responsible for much of the delay in then obtaining that report. She delayed the process by making repeated submissions to the DIP that his investigation should cease on the basis of Dr Philipp’s report the previous month. She then delayed the process further by not attending the appointment fixed for 4 March 2005. She did not see Dr Aylard until 13 April 2005.

Dr Aylard’s view was fully accepted and was not questioned by CBC. At no point after it was received was any further suggestion ever made that Mrs Laird was feigning or exaggerating her symptoms.

The delays thereafter, from May 2005 to March 2006, principally arose from:

the need to obtain legal advice in unusual factual circumstances;

the ongoing DIP investigation and the initially uncertain effect on it of Dr Aylard’s report;

the summer 2005 holiday period, which coincided with the last phase of the DIP’s investigation and CBC’s letter of 9 August 2005 treating Mrs Laird’s contract as frustrated;

the decision of Mrs Laird to bring an employment tribunal claim under, inter alia, the DDA, on or about 7 November 2005 even after CBC had confirmed on 1 November that it had decided to assess Mrs Laird’s application for an ill health pension by obtaining a statutory medical assessment;

the legitimate efforts of the council – unsuccessfully at that stage – to obtain Mrs Laird’s pre-employment medical questionnaire from GCOHS;

the statutory requirement for an occupational health assessment and the delays in arranging an appointment for that purpose;

the ordinary administrative functions of processing the paperwork and transmitting the proper documents to the administering authority.

In the above circumstances, I am satisfied that CBC did not unreasonably delay in processing Mrs Laird’s claim to be entitled to an ill health pension and so find.

The discrimination alleged is disability discrimination. However, there was no expert evidence before the Court specifically addressing this issue. Mrs Laird sought to introduce such evidence at the close of CBC’s case (and after Dr Aylard had given evidence) but I rejected that very late application, which would have involved a further examination of Mrs Laird, a further report and the need to recall Dr Aylard. I also reject Mrs Laird’s still later contention that she may be able to rely on past disability, which was in any event not explored in the evidence and was not proven.

It was seemingly assumed that since it was common ground that Mrs Laird was sufficiently ill to retire on an ill health pension, it would also be common ground that she was disabled for the purpose of the DDA. However, this does not follow. Retirement for ill health depends on the workplace environment and the person’s ability to fulfil the job in question. DDA disability depends on domestic environment and the person’s ability to carry out normal day to day activities. There was little, if any, evidence directed at this issue and on the material before the Court I find that Mrs Laird has not proven that she is disabled within the DDA.

As to harassment, the alleged cause of action appears to be common law negligence and actionable (i.e. criminal) statutory harassment under the Protection from Harassment Act 1997.

The case put is that the bringing and prosecuting of this claim is unlawful “including in relation to the ill health Pension ... and in relation to CSL’s mental health and so as to create a hostile and intimidating and offensive environment for CSL”.

Mrs Laird consented to consolidation of the recently brought fraud claim and with the pre-existing negligence claim. Both claims appear to be encompassed within her contention. Thus the proposition is that it was illegal to sue Mrs Laird in 2007 for negligence and in 2008 for fraud because this would be harassment under the 1997 Act.

The allegation that bringing the present claims is unlawful is relied upon as a defensive measure. Mrs Laird does not maintain any action for damages for harassment; she only relies upon it (and her other allegations) to reduce or extinguish any liability in damages she may have to CBC. The allegation made is therefore made “on the [disputed] assumption that some wrongdoing and cause of action is proved” (para 53(1) of the Re- amended Defence).

It follows that Mrs Laird’s contention is that she has a defence that the bringing of the claim is unlawful, even on the footing that its merits are good, i.e. that she is guilty of the fraud or negligence alleged against her. In other words, she submits that because the bringing and prosecuting of the claims causes her distress, they cannot be brought even though they would succeed on their merits. This cannot be and is not the law and indeed, if accepted, it would in effect put Mrs Laird above the law.

Mrs Laird seeks to place reliance on Allen v. Southwark[2008] EWCA Civ 14 for the proposition that:

The legal proceedings in Allen which it was held could arguably constitute harassment were proceedings brought without any foundation which were all withdrawn, dismissed or struck out. They are not in anyway analogous to the claim brought by CBC which is clearly a claim fit for trial. I accordingly reject this allegation of breach of duty.

The only breach of duty by CBC which I have found to have been established concerns the meeting at which Cllr Stuart-Smith asked “What would it take for you to go?”. However, for the reasons set out above, no loss has been proven as a consequence of this breach and accordingly Mrs Laird’s claim for damages fails.

In the light of my conclusions on breach of duty CBC do not need to rely on these further matters. If relevant, I would not hold that they preclude Mrs Laird’s claim.

CBC originally contended that the claim made by Mrs Laird by way of equitable set off would be statute barred. However, CBC ultimately acknowledged that equitable set off is a true defence and since the Limitation Act time limit operates by barring the remedy rather than extinguishing the right it does not apply to the defence of equitable set off – see Henriksendns v THZ [1974] QB 233 at 245F-247A, 254G, 264B-C, and Federal v Molena [1978] QB 927 at 973H-975B; Halsburys Laws Vol 42 at 434n3.

CBC nevertheless placed reliance on the doctrine of laches and submitted at a late stage of the trial that in any event the claims raised by Mrs Laird do not give rise to any right of equitable set off. If this latter contention was correct it would mean that for the first time it would matter that Mrs Laird’s claim was expressed as a set off rather than as a counterclaim. Given the lateness of this argument coming forward I therefore gave leave to Mrs Laird to put her claim by way of counterclaim up to the amount of the claim.

Whether the counterclaim could be brought depends on whether I should disapply the Limitation Act time limit.

A personal injury claim relied upon as a defence by way of set-off (under CPR rule 16.6) by a defendant who has not previously made a claim in the action, is deemed by section 35(1)(b) and (3) of the Limitation Act 1980 to have commenced on the same date as the original action. Where the defendant relies on a cause of action which arose more than three years before that date, the claim is statute barred unless the court exercises its discretion under section 33 to disapply the time limit, having regard to all the circumstances and in particular to the factors set out at section 33(3)(a)-(f).

These factors are: (a) the length of and reasons for the delay; (b) the likely effect of the delay on cogency of evidence; (c) the conduct of the other party after the cause of action arose, including responses to requests from the party seeking an extension of time; (d) the duration of any “disability” (i.e. where the party is a child or mental patient, see Civil Procedure (White Book) 2008 vol. 2 at 8-93, p.2070) on the part of the party seeking to disapply the time limit; (e) how promptly and reasonably the party acted once armed with knowledge of the facts; and (f) the steps taken by the party to obtain advice and the nature of the advice.

“In the exercise of the discretion, the basic question to be asked is whether it is fair and just in all the circumstances to expect the defendant to meet the claim on the merits, notwithstanding the delay in commencement” - Cain v Hamlani[2008] EWCA Civ 1451 at para 72. In considering that question, of particular importance will be the effect of the delay and the extent to which it has disadvantaged the defendant in his investigation of the claim or the assembly of evidence and the reasons for the delay.

The present claim in negligence was brought on 9 May 2007. Mrs Laird’s original unamended defence was dated 2 August 2007. It included para 57 in the same form as in the current defence, which is now a defence to the fraud claim as well.

By section 35(1)(b) and (3) of the Limitation Act 1980 Mrs Laird’s claim by way of set-off is deemed to have been commenced on 9 May 2007. To the extent that her cause of action, if any, arose more than three years before that date, i.e. before 10 May 2004, it is statute barred unless either, as Mrs Laird contends, the Limitation Act time limit does not apply to the defence of equitable set off, or the court disapplies the time limit in the exercise of discretion under section 33 of the 1980 Act, after considering the factors set out in section 33(3)(a)-(f).

CBC submits that Mrs Laird’s cause of action, if any, arose before 10 May 2004. This is borne out by the fact that she brought proceedings against Cllr McKinlay on 26 February 2004 seeking an injunction to restrain him from “further harassing, alarming or distressing the Claimant” and from “visiting the first floor of the Council’s Municipal Offices”, as well as damages and interest. In her particulars of claim in that action, Mrs Laird relied on “particulars of harassment” under the Protection from Harassment Act 1997 and pleaded a series of alleged incidents going back as far as 25 February 2002. I accept CBC’s submission on this issue in relation to all matters relied upon before 10 May 2004.

CBC further submits that the court should not disapply the three year time limit, having regard to all the circumstances, including the factors set out at section 33(3)(a)-(f) of the 1980 Act.

Whilst sympathetic to CBC’s position in the light of the fact and nature of the claims already made by Mrs Laird, the difficulty is that essentially all matters raised by her claim have been investigated, evidenced and fought out at the trial in any event and arise under other headings (such as causation) and in such circumstances there is no real prejudice – see Cain v Hamlani at paras 57, 63-72,73,74, 80-1. Further, there is an unfairness involved in enforcing different time limits for the claim and counterclaim. I am accordingly prepared to disapply the time limit.

If so, then it does not matter whether Mrs Laird’s claim does or does not give rise to a right of equitable set off.

Finally, CBC submits that Mrs Laird’s claim, if it were not statute barred and it were otherwise good on its merits, is bad because she relies on her own wrong in bringing it. They relied on the principle set out by the majority in Hewison v. Meridian Shipping Pte Ltd that precludes a claimant from recovering damages which are based on an assertion that he would have committed an unlawful act and where the illegality is neither collateral or insignificant: see Hewison v. Meridian Shipping Pte Ltd[2003] ICR 766, CA, per Clarke LJ at paras 28 and 45; per Tuckey LJ at paras 48-53 (Ward LJ dissenting); Clerk & Lindsell at 3-27. I am not satisfied that that principle applies here. There are clear differences between the cases, and in particular the fact that Mrs Laird is not making a claim based on putative future deception or which involves an assertion of future unlawful acts.

Break in the chain of causation;

This issue only arises if my finding on liability is overturned. In such circumstances, Mrs Laird contends that CBC’s damages claim nevertheless fails because the chain of causation was broken.

First, it is contended that actionable non-disclosure at the point of recruitment of (a) lack of unanimity about the proposed restructuring and change of culture and (b) the closeness of the vote in Mrs Laird’s favour “breaks all chain of causation”.

Secondly, it is contended that the various breaches alleged under Issue (5) above caused Mrs Laird such stress as would have caused anyone to have a breakdown and that accordingly “the chain of causation is broken as CBC’s losses are due to its own fault”.

Where the victim of a tort is alleged to have broken the chain of causation by its own conduct, in general the conduct needs to be wholly unreasonable and of such overwhelming impact that it eclipses the tortfeasor’s wrongdoing. Merely negligent conduct is more appropriately dealt with as a matter of contributory negligence or an unreasonable failure to mitigate loss: see the discussion in Clerk & Lindsell, at 2-96 to 2-104.

In the present case I have found that there was no actionable non-disclosure and for the same or similar reasons there was no unreasonable conduct. Further, the conduct sought to be relied upon is a prior rather than an intervening event. In essence it amounts to saying that had Mrs Laird been given certain information she would not made any representation and therefore any misrepresentation. However, that does not explain or excuse the misrepresentation which she did make, a fortiori if it had been a fraudulent misrepresentation.

I have also rejected virtually all of Mrs Laird’s allegations of breach and so they also cannot found the requisite unreasonable conduct. The only breach that I have found to have been made out has not been shown in itself to have the requisite impact or potency. In any event, it is not losses based on her breakdown that are being claimed, but losses resulting from the fact of her employment.

It may be that in relation to certain of the individual heads of loss claimed issues of causation may arise but I am satisfied that no general case of break in the chain of causation or novus actus interveniens has been made out.

Contributory negligence;

Contributory negligence is not available as a defence to an action for deceit, but is available as a defence to an action for common law negligence or under the Misrepresentation Act 1967 – see Standard Chartered Bank v Pakistan National Shipping Corporation and Others (Nos 2 and 4)[2003] 1 AC 959, HL, per Lord Hoffmann at paras 17 and 18.

In relation to the wording of the medical questionnaire, if and to the extent that it was not very clearly worded that will impact on whether Mrs Laird gave false answers or was negligent in her answers but it is not in itself negligence or “fault” within the meaning of the 1945 Act. Further, if she was negligent notwithstanding lack of clarity in the questionnaire then that was due to her own fault.

In relation to the fact that CBC did not seek advice from Mrs Laird’s doctors, I am not satisfied that this would amount to “fault” within the 1945 Act. In particular:

Any negligence would have been that of GCOHS rather than CBC since it was to GCOHS that the questionnaire was addressed and CBC had no right to see it. GCOHS is not to be identified with CBC for the purpose of contributory negligence - see Clerk & Lindsell on Torts (19^th edition, 2006) at 3-65 to 3-67,

This is further borne out by the fact that GCOHS would have owed no duty of care to Mrs Laird when reporting to the council on whether she was fit or not: see Kapfunde v. Abbey National plc [1999] ICR 1, CA per Kennedy LJ at 6-12; per Millett LJ at 15-16; Clerk & Lindsell (op. cit.) at 8-40.

Moreover, GCOHS was not negligent on the facts because nothing untoward was disclosed on Mrs Laird’s completed medical questionnaire.

As to the alleged breaches of duty, it has not been shown (even if proved) that these were a cause of the losses being claimed, which are premised on the fact of employment of Mrs Laird rather than specific later acts.

This argument is a variant of the argument that the chain of causation was broken by CBC’s unreasonable acts. CBC has committed no wrong material to the claim being made and does not need to and does not rely on its own wrong in order to make good its claim. The holdings made above under the heading of the chain of causation are repeated, mutatis mutandis.

Despite raising this issue CBC was content for evidence on all the relevant issues to be heard in any event. Further, in the light of the findings I have made CBC has no need to rely on these matters. Nevertheless I shall briefly address the arguments raised.

A cause of action estoppel will arise where the cause of action relied on a second claim is the same as the cause of action in the first claim and the first claim has been dismissed, as opposed to merely discontinued, whether or not the two claims are identical in every respect.

Where a High Court claim is discontinued under CPR rule 38.2(1), the court’s permission to bring a fresh claim is not needed (unless the circumstances in rule 38.2(2) obtain). A defendant who, fearing a second action, wishes to have the action dismissed instead of discontinued could only achieve this result by applying under rule 38.4 to have the notice of discontinuance set aside within 28 days after it was served. However, by CPR rule 38.7 a claimant wishing to bring a second action needs the permission of the court if the defendant has filed a defence in the first action, and the second action arises out of the same or substantially the same facts as the first action.

Cause of action estoppel and issue estoppel apply not just to subsequent litigation between the same parties, but also between the “privies” of the same parties; see the discussion of “privies” in Megarry V-C’s judgment in Gleeson v J Wippell & Co Ltd[1977] 1 WLR 510, approved by Lord Bingham in Johnson v. Gore-Wood at 32.

The modern law relating to re-litigation where there is not a strict issue estoppel or cause of action estoppel is found in the speech of Lord Bingham in Johnson v. Gore-Wood & Co[2002] AC 1, at 31:

Mrs Laird has brought three previous claims against CBC and one against its leader. CBC submitted that three of the previous claims should operate to debar Mrs Laird from advancing in this case contentions already advanced in those three previous claims.

On 26 February 2004 Mrs Laird brought a claim against Cllr McKinlay. Mrs Laird alleged that Cllr McKinlay had harassed her since 25 February 2002 “on occasions too frequent to recall with particularity” and relied on 14 alleged incidents during the period from 25 February 2002 to 10 February 2004. She asserted that her health had been adversely affected.

If CBC is vicariously liable for Cllr McKinlay’s actions then CBC are arguably “privies” for the purposes of the doctrine of cause of action estoppel, issue estoppel and abuse of process, applying the principles discussed by Megarry V-C in in Gleeson v J Wippell & Co Ltd (cit. sup.).

District Judge Frenkel struck out the claim with costs on 26 October 2004 on the ground that it had no real prospect of success.

On ordinary principles the dismissal of the claim would mean that Mrs Laird could not bring a subsequent claim asserting a cause of action based on Cllr McKinlay’s alleged harassment of Mrs Laird based on his actions up to 10 February 2004, or possibly 26 October 2004. However, in the present case Mrs Laird’s cause of action is based not just on the actions of Cllr McKinlay but also on the actions of others. Nor, given that the prior claim was made against Cllr McKinlay only, can it be said that she ought to have raised those further allegations in the prior proceedings. In those circumstances I do not consider that there is a cause of action estoppel.

Similar difficulties arise in relation to any claim of issue estoppel. The alleged breaches of duty depend on the actions of Cllr McKinlay together with others. District Judge Frenkel’s judgment decides that the allegations made against Cllr McKinlay alone do not establish the alleged breach of duty by him, but no specific finding of fact in relation to any particular allegation is made. To the extent that the actions of Cllr McKinlay are relied upon as part of a wider case of breach of duty it therefore cannot be said that there is a discrete issue upon which an estoppel arises. Further, the claim against Cllr McKinlay was only under the 1997 Act. It could not and did not assert a contractual or concurrent tortious liability.

For similar reasons, I also do not consider that this is a case of abuse of process. There is overlap between the proceedings but not a sufficient identity between them for there to an abuse or for it to be “unjust harassment”. This is further borne out by the matters set out in paragraph 507 below, which equally apply to the proceedings brought against Cllr McKinlay.

On 20 May 2004 Mrs Laird’s then solicitors wrote to CBC that they were instructed to apply for an injunction to restrain the JNC Members’ Panel from meeting on the ground that it was breaching JNC procedures. Correspondence followed and a meeting of the JNC Members’ Panel took place on 25 May 2004, attended by (inter alios) Mrs Laird’s counsel who made both written and oral submissions. The Panel recommended that the full council should appoint a DIP to consider five charges.

Mrs Laird’s solicitor then stated that he intended to apply to the court to restrain the proposed full council meeting on 3 June 2004. CBC undertook not to implement any decision to appoint a DIP, until after the return date. CBC then resolved to approve the recommendation to appoint a DIP but subject to its undertaking.

The claim form was issued on 4 June 2004 endorsed with full particulars of claim. The pleaded claim purported to be founded on breach of Mrs Laird’s employment contract, and alleged that the decision (in October 2003) to appoint the JNC Members’ Panel, and all the Panel’s subsequent proceedings, were “unlawful and/or in breach of contract and/or in breach of natural justice ... and/or in breach of ... the Code of Conduct”.

Lengthy particulars were then given. The next paragraph alleged that “the workings of the JNC Panel have demonstrated unfairness, breach of natural justice and prejudice”. Further particulars were then given, and it was alleged that Mrs Laird was suffering and would suffer loss and damage, and should have an injunction.

The return date was 11 June 2004. CBC wrote to Mrs Laird on 4 June to inform her that the council would meet on the evening of 11 June to consider again the appointment of a DIP and also to consider whether Mrs Laird should be suspended in accordance with the 2001 Regulations (cited above), and inviting any written representations.

On 10 June 2004 Mrs Laird signed a lengthy witness statement with a 268 page exhibit. The matter was then argued inter partes before HHJ Havelock-Allan QC on 11 June 2004. He refused the injunction, ordered Mrs Laird to pay the costs (since recovered) of the hearing on a full indemnity basis and gave further directions for trial.

Mrs Laird then applied for a stay of her claim for three months on medical grounds. On 17 September 2004 Judge Havelock-Allan QC refused that application, which was opposed, ordered Mrs Laird to pay costs (since recovered) of the hearing, this time on the standard basis, and gave updated directions for trial.

On 29 September 2004 Mrs Laird applied to have the directions “put back” indefinitely for a psychiatric report. After a telephone hearing on 1 October 2004, Judge Havelock-Allan QC ordered that a 21 day postponement of each deadline in the directions order would be permitted provided a psychiatric report was submitted to the court by 13 October. He ordered Mrs Laird to pay the costs (since recovered) of the telephone hearing, on the standard basis.

On 19 October 2004 Mrs Laird made a further application for a stay “for an indefinite period”, again on medical grounds. Judge Havelock-Allan QC dismissed that application at a further telephone hearing on 22 October 2004. He ordered that CBC’s costs (since recovered) be in the case, and fixed the trial of the action for 15-16 March 2005.

On 3 December 2004 Mrs Laird amended her claim to add a claim for damages. On or about 15 December 2004 CBC served its defence. On 28 January 2004 Mrs Laird discontinued the claim.

Given that the claim was discontinued rather than dismissed this is not a case of cause of action or issue estoppel. However, it is potentially a case of abuse of process. In these proceedings Mrs Laird makes a number of claims premised on the setting up and conduct of the JNC proceedings. These are all claims which were or could have been made in the earlier court proceedings.

In the circumstances CBC contends that it would be an abuse of process for Mrs Laird now to be allowed to pursue the following pleaded contentions in her defence in the current proceedings:

The allegation that the JNC Panel “was set up wrongfully and in breach of duty by the Council and to investigate unfounded complaints. Further, the JNC Panel was itself tainted by at least an appearance of bias.”

The further allegation that “the DIP was set up as a consequence of the Council’s wrongs and breaches of duty....”.

The allegation that the chain of causation (in respect of the council’s claim for the costs of the appointment of the DIP) was broken by establishing a tainted JNC Panel.

The allegations that Mrs Laird has suffered loss and damage by reason of breaches of the DDA, the Health and Safety at Work Act 1974 and the Human Rights Act 1998 by reason of matters involving the JNC Panel and proceedings.

There is considerable force in CBC’s contention. However, it is right to point out that:

Mrs Laird is defending, not claiming;

All the evidence has been heard and the matters argued out;

The main reason why Mrs Laird discontinued her claim was illness;

CBC was not then claiming against Mrs Laird. If CBC had been doing so then all matters would have had to have been heard together. It is potentially unfair that Mrs Laird should be disadvantaged by the fact that CBC had not yet investigated and formulated its claims

In these unusual circumstances I am satisfied that it is not an abuse of process for Mrs Laird to be allowed to rely on her complaints concerning the JNC process and proceedings, which complaints I have in any event dismissed.

On 1 November 2005 CBC wrote to inform Mrs Laird’s solicitors that it was assessing her application for an ill health pension and would be obtaining medical evidence in the usual way. Her solicitors responded saying that an employment tribunal claim had been issued but she would consent to a stay. An employment tribunal has no jurisdiction to award a pension or enhanced ill health pension, nor to order employer pension contributions to be paid.

Disputes over whether a local government employee is entitled to an early ill health pension are determined under the statutory scheme which includes recourse to the Pensions Ombudsman and/or, ultimately, the Secretary of State or the Administrative Court on a judicial review. Such disputes are not the province of an employment tribunal.

In the tribunal claim, issued on 7 November 2005, Mrs Laird claimed wrongful constructive dismissal, unfair dismissal and disability discrimination. The allegation of disability discrimination was that CBC treated her contract as frustrated and failed to consult her about ill health retirement. The claim also included a claim for failure to credit Mrs Laird with pension contributions in respect of her role as returning officer.

CBC disputed the claim in all respects. A stay was agreed. It did not admit that Mrs Laird was under a disability within the meaning of the DDA. The question what amounts to such a disability is exclusively one for the employment tribunal, where a claim in that tribunal is brought.

On 23 March 2006 CBC wrote to Mrs Laird’s solicitors informing them that the council had instructed the administering authority (Gloucestershire County Council- “GCC”) to release an ill health pension for Mrs Laird, and that the council had “now done all in its power to ensure that the pension is paid”. It was then paid from late March or early April 2006, backdated to 10 August 2005.

However, Mrs Laird’s solicitors wrote to the employment tribunal on 20 April 2006 making clear that she was still pursuing three other heads of alleged claim, including statutory compensation and contractual notice pay. These were consequent on the claims for alleged wrongful constructive dismissal and unfair dismissal.

Particulars were sought by CBC and two interim hearings by telephone were held, on 18 May 2006 and 26 October 2006. At the second of these, the claim was dismissed. CBC’s application for costs was dismissed. Costs do not normally follow the event in employment tribunal proceedings.

In these circumstances, CBC submits that there is a cause of action estoppel in respect of all issues pleaded in the employment tribunal claim. In addition, following the approach of Lord Bingham in Johnson v. Gore-Wood it would be an abuse of process for Mrs Laird now to be allowed to pursue any contention made in that claim.

In consequence, CBC submitted that the following pleaded contentions in her defence in the current proceedings are not open to Mrs Laird:

The allegation that Mrs Laird’s sickness absence from 2 June 2004 to the end of her employment on 9 August 2005 was

The allegation disputing that the contract of employment was frustrated and purports to plead wrongful dismissal and constructive dismissal, and a failure to make reasonable adjustments under the DDA.

The raising of disputes relating to Mrs Laird’s pension and to rely on them as acts of harassment under the Protection from Harassment Act 1997.

In so far as Mrs Laird was seeking to reopen a claim determined by the employment tribunal I would be inclined to accept CBC’s case. However, Mrs Laird is not pursuing a disability discrimination claim or a wrongful or unfair dismissal claim of the nature advanced before the employment tribunal, and I am not satisfied that the claim made, at least as presented at trial, does reopen the employment tribunal claim, or that it does so in a sufficiently clear or discrete way to found an estoppel or constitute an abuse of process.

The next issue raised in the list of issues is:

Again this issue only arises if my finding on liability is overturned.

There was no substantial difference between the parties about the principles of law applicable to determine the measure of damages. Mrs Laird accepts for present purposes that damage need not be foreseeable if the tort is deceit or “deemed deceit” under the Misrepresentation Act 1967. CBC accepts that damage must be foreseeable if the tort is common law negligence.

Whilst recognising that this Court is bound by the Court of Appeal decision in Royscot Trust Ltd v Rogerson [1991] 2 QB 297 to hold that the measure of damages for misrepresentation under section 2(1) of the 1967 Act is that for fraud rather than that for negligent misrepresentation, Mrs Laird contends that this was wrongly decided and reserves the right so to argue should this case go further.

In my judgment, if and when the Royscot Trust Ltd v Rogerson decision falls for reconsideration by a higher court, there is a real possibility of it being reversed. In particular:

The rationale of there being a special rule for damages in fraud is one of morality and deterrence – per Lord Steyn in Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd [1997] AC 254 at 280. Such considerations do not apply, or at least do not apply to anything like the same degree, in cases of mere negligence.

It can be said to be anomalous and unsatisfactory for there to be major differences in the damages recoverable for negligent misrepresentation under section 2(1) of the 1967 Act and for negligent misrepresentation at law.

The wording of section 2(1) – “if the person making the representation would be liable to damages in respect thereof had the representation been made fraudulently, that person shall be so liable notwithstanding that the representation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up until the time that the contract was made that the facts represented were true” – does not necessarily compel the conclusion that the liability in damages for misrepresentation under section 2(1) is to be the same as that for fraud. These words can be construed as meaning no more than that whereas before the 1967 Act there would only be a liability in damages for pre-contractual misrepresentation if the misrepresentation was made fraudulently, now there is also to be liability where the misrepresentation is made negligently. It can be considered as referring to the existence of liability rather than its extent.

There is strong, if not unanimous, academic criticism of the decision – see, for example, Chitty on Contracts Vol 1at 6-070; McGregor on Damages (17^th edn.) at 41-045-6; Treitel on The Law of Contract (12^th edn.) at 9-063; (1991) 107 LQR 547.

In Smith New Court Securities Ltd v Citibank NA[1997] AC 254, HL, per Lord Browne-Wilkinson at 264-5 (and see also the discussion at 262-5) held as follows:

The measure of damages in an action under section 2(1) of the Misrepresentation Act is the same as in an action for fraudulent misrepresentation, i.e. deceit: Royscot Trust Ltd v Rogerson [1991] 2 QB 297, CA, per Balcombe LJ at 306-7; per Ralph Gibson LJ at 308-9.

The measure of damages in an action for negligence is limited to losses that are reasonably foreseeable.

CBC accepted that a victim of fraud or negligence may not recover damages that were avoided or could have been avoided by the taking of reasonable steps. But “the standard is not a high one, since the defendant is a wrongdoer” - Chitty on Contracts Vol 1 at 26-104. Further:

Expenditure caused by the tort is recoverable, with interest, on application of the above principles: see McGregor on Damages, 17^th ed. at 2-030 to 2-031, 2-049 to 2-051, 17-012 to 17-018 (and corresponding passages in 4^th Supplement, August 2007). In deceit and under the 1967 Act, it is recoverable whether or not it is foreseeable; in negligence, it is recoverable if foreseeable.

The cost of staff time devoted to investigations and addressing the consequences of a tort can be recoverable: Aerospace Publishing Ltd and another v Thames Water Utilities Ltd[2007] Bus LR 726, CA , per Wilson LJ at paras 73-87; R+V Versicherung AG v Risk Insurance Solutions SA (No3)[2006] EWHC 42 (Comm), per Gloster J at paras 54-78; R+V Versicherung AG v Risk Insurance Solutions SA (No.4)[2006] EWHC 1705 (Comm), per Tomlinson J at paras 8-14.

Mrs Laird contends that this principle only applies in relation to a profit making body whose function is to generate revenue, so that it can be established that staff have been diverted from revenue generating activities. Whilst it is correct that these cases did all involve such bodies and that there are statements made in them which support such an approach, I do not consider that the principle is so limited. In particular, if it would not have been unreasonable to employ outside persons to perform the work done by staff, and costs have been saved by having that work done by staff, then such costs should be recoverable on mitigation principles.

Mrs Laird further contends that these costs have nothing to do with the alleged misrepresentations and are not costs of investigating or mitigating the tort. However, on CBC’s case the consequence of the tort was the employment of Mrs Laird and the disputes which followed from that employment, and these costs can properly be regarded as addressing the consequences thereof.

The staff time authorities also show that the obligation on the claimant is not to prove to a nicety the precise amount of time and tasks done by employees in consequence of the tort. It is sufficient if the claimant proves significant disruption to the employer’s business or activities and there is evidence of the activities undertaken by employees in the course of that disruption.

The next issue is:

Entitlement to recovery of the costs of the grievance and JNC procedures; the reasonableness and justification of them;

If liability is for common law negligence, these losses must be foreseeable to be recoverable. CBC’s submission is that they were foreseeable because Mrs Laird had experience of a similar history of conflict when employed at the CIH. She had emerged from that experience with a compromise agreement which included payment to her of compensation (£35,250) and legal costs (£14,000 in total).

However, I am not satisfied on the evidence that there is any similar history of conflict as CBC alleges. As set out in paragraphs 65 and 66 above, the background to Mrs Laird’s departure from CIH was that she had been whistleblowing. She had raised issues concerning the approval of projects without proper authorisations and this had resulted in a dispute with the CIH Board. There is no proper evidence that Mrs Laird’s personality was responsible for that or indeed any other dispute. At the time that she entered the employ of CBC Mrs Laird therefore had no reason to believe that her employment was likely to engender conflict, still less conflict on the scale that then ensued. She had had a long and generally successful employment history. Although she was a forceful and demanding personality, so are many chief executives, and there was no particular reason to suppose that this would be problematical. I am not therefore satisfied that it was reasonably foreseeable at the time that the alleged misrepresentations were made that Mrs Laird’s employment would lead to conflict and costs such as those claimed, which costs, moreover, would not ordinarily be recoverable against an employee. I am not therefore satisfied that the losses claimed were reasonably foreseeable. I shall accordingly address the losses claimed under this heading on the assumption that reasonable foreseeability does not need to be established and that the deceit damages rules apply.

The council’s claim under this heading is as follows:

External legal advice: £96,385.56

Costs of the DIP: £15,775.00

Additional professional support: £175,379.64

Dr Aylard’s report (4 May 2005): £1,800.00

Recovering deleted emails: £4,375.00

Administrative costs: £10,486.61

Management time: £228,585.72

The cost of external legal advice claimed by CBC relates to advice received in connection with (i) Mrs Laird’s grievance (ii) the JNC panel process and (iii) the DIP’s investigation.

Veale Wasbrough: these solicitors were instructed by agreement between Mrs Laird, Cllr McKinlay and Mr Ford to advise on issues arising from Mr Webster’s complaint and his compromise agreement: see Cllr McKinlay’s letter of 2 October 2002 to Mrs Laird. They produced a written report dated 26 November 2002. These costs were the consequence of Mr Webster’s unjustified complaints. They were not the responsibility of or caused by Mrs Laird.

David Fletcher of counsel: he was instructed in relation to various matters concerning the correct process for appointing and conducting the JNC process. He was asked to look at points raised by Mrs Laird herself, notably the question who should appoint the JNC panel; whether absence of an appraisal meant that the JNC process would be stultified and whether Mr Ford was obliged to prepare a “section 5 report” arising from the provisional offer of about £63,000 to Mrs Laird in March 2003; to which his answer was, again, negative. Save to the extent that these costs were increased by reason of Mr Fletcher’s failure to advise correctly initially that the council had to appoint the JNC Panel, I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Peter Oldham of counsel: only £458 is claimed although he charged more than that. He was separately instructed by Mr Perry and Mr Ford to advise on the role and responsibility of the chief finance officer, Mr Perry. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Wiggin & Co, solicitors: they were appointed to advise on issues relating to possible publication of an article in the Echo following the overheard conversation between Cllr McKinlay and Ms Fallon. These costs were incurred as a consequence of Cllr McKinlay’s carelessness. That carelessness was not caused by Mrs Laird. These costs are irrecoverable.

Melanie Tether of counsel : she advised and represented the council at Mrs Laird’s grievance hearing, and attended part of it. There is no evidence that objection was taken to her presence at the hearing. Her particular remit was “duty of care” issues, and in that context she advocated and cross-examined on the point that mediation was not a contractual entitlement of Mrs Laird. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Nabarro Nathanson, solicitors: they were instructed in about April 2004 and advised on the question of declaring or not declaring personal or prejudicial interests under the code. This advice has not been disclosed and so it is not possible to determine whether it was necessary to obtain such advice or whether, as Mrs Laird claimed, it simply confirmed that her position on this issue. I am not in a position to determine whether these costs were reasonably incurred and are recoverable and therefore do not so find.

Alistair McGregor QC: he advised on and around 19 March 2004 in relation to the question of suspension of Mrs Laird. He attended the full council meeting on 19 March 2004 and advised against suspension. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Tim Kerr QC: advised on numerous issues from about September 2003 until 2006; also appeared at various hearings and telephone hearings, and obtained costs orders against Mrs Laird. The present claim excludes costs recovered under those orders and in respect of matters within the scope of the litigation which gave rise to them. Subject to satisfactory proof that such costs have been excluded, I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Harini Iyengar of counsel: she was instructed by CBC to peruse and sift the contents of Mrs Laird’s email account to ensure that emails that CBC should not see would not be seen by officers or members and would not be used. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

The amount claimed, £15,775, are the fees charged by Mr Lynch for the work he did in his capacity as DIP. He wrote upwards of 20 reports before reluctantly abandoning his investigation. I do not accept Mrs Laird’s contention that CBC should have accepted that the DIP procedure could not continue prior to Mr Lynch’s determination to that effect. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

These are as set out below:

SOLACE Enterprises (Patrick Brady): Mr Brady’s services were engaged because of the dispute with Mrs Laird. They were reasonable value for money at £600 per day (only when working), despite Mrs Laird’s suggestion to the contrary. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Tribal GWT (Tim Rothwell): Mr Rothwell was needed to provide additional human resources support to the council because of the dispute with Mrs Laird. He played a significant role in 2003 and 2004 including the delicate negotiations with Mrs Laird over the problem of conditions attaching to her willingness to attend a medical assessment and/or a stress risk assessment. I do not accept that this work could and should have been done by Ms Pitman. Mr Rothwell performed a valuable role and Mrs Laird was far more willing to deal with him than with Ms Pitman. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Equilibrium Consulting, United Bristol Healthcare and Dr L. Horner Baggs: These persons and bodies were appointed to carry out stress risk assessments of various staff and occupational health work in respect of Mrs Laird. These were not risk assessments carried out as a matter of course. They were made necessary by the stresses caused by the dispute with Mrs Laird. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Employers’ Organisation (Martin Coopey): Mr Coopey’s services were obtained in the spring of 2004 at the request of Mrs Laird and her solicitors because of Mrs Laird’s complaint that the JNC process needed independent oversight and because of her attack on the impartiality of Mr Brady. He produced a report which was used in the JNC process.

Cash Friday (additional locum support): Ms Farooqi needed additional locum support because of the time she was having to spend on the dispute. CBC accepted that this could involve an element of double counting given that there is also a claim by reference to the time she spent on the dispute and no satisfactory basis has been put forward for determining the extent of such double counting. This claim has not been proven.

Following the work done by Mr Thompson over the weekend of 20-21 March 2004 on the council’s personal computer used by Mrs Laird, professional support from Vogon International Limited was engaged to recover deleted emails from Mrs Laird’s inbox, at a cost of £4,375.00. Given that the exercise revealed little or nothing I am not satisfied that it was necessary or reasonable to incur these costs.

The cost of Dr Aylard’s first report (£1800) was paid in full by CBC. The cost was not split evenly between CBC and Mrs Laird, even though Dr Aylard was then instructed jointly by them. This is because the report was obtained at the direction of the DIP. I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are recoverable.

Administrative costs in the sum of £10,486.61 are claimed. These relate to additional stationary, couriers, and a stenographer for the grievance hearing. The claim is confined to items in the Schedule of Loss requisitioned for matters arising from the employment of Mrs Laird and thus requisitioned against the “dispute” cost code. The detailed facilities, services and other things supplied were explained by Ms Farooqi in evidence. In the light of Ms Farooqi’s evidence I accept that these costs were reasonably incurred, are sufficiently causally connected to the tort and are sufficiently proven to be recoverable.

CBC puts its claim in two alternative ways. First, on the basis of “estimated time from year to year” costs; alternatively on the basis of “actual time” costs.

The estimated costs were based on a guess-estimate in December of one year as to what might be the corporate time in the next year. The only relationship to the previous year was that the relevant person might (but might not) have brought into account the amount of corporate time which had been spent in the previous nine months of the current financial year. On the other hand they might have considered what the new year would have in store. They were also based on deducting a fixed percentage in relation to what would have been the figure for corporate time otherwise, which is necessarily a guess-estimate. In addition, not all of the relevant persons were called to justify the exercise.

Whilst sympathetic to CBC’s position and mindful of the fact that significant management time was spent dealing with the disputes with Mrs Laird I find that the guess-estimation involved in CBC’s approach is too great to accept that the claim has been proven. I am, however, prepared to accept CBC’s alternative approach based on actual costs derived from documents produced at the time and explained and supported by Ms Farooqi’s evidence.

I therefore accept most but not all of CBC’s claims under this heading. I have not sought to quantify the resulting claim but will do so if it becomes necessary and cannot otherwise be agreed.

The next damages issue is:

CBC claims that the cost to it of Mrs Laird’s ill health pension flowed directly from the tort (whether negligence or deceit), i.e. by Mrs Laird withholding from the council her true medical history. The incurring of that expenditure (which is being paid progressively) is matter of factual history, not expert evidence. The calculation by the administering authority and scheme actuary of the amount charged to the council was done by applying actuarial principles, but the charging of the resulting cost to the council is a matter of fact. The claim made is for £449,885.66.

If foreseeability is required, CBC submits that the cost to it of the ill health pension is a foreseeable consequence of Mrs Laird’s negligent failure to disclose her medical history. She had experience in local government and of the Local Government Pension Scheme, of which she was already a longstanding member. She is always equipped with advice on legal matters where her legal rights are concerned. She cannot have been unaware that ill health retirement with early and enhanced pension rights is a feature of local government service.

Again, in so far as foreseeability is required, I am not satisfied that CBC has made out its case. There is no doubt that Mrs Laird had suffered from earlier depressive episodes and that in consequence she had had to take time off work (two months in 1997 and two weeks in 2001). It was therefore clearly foreseeable that she might have time off work as a result of her vulnerability to depression. However, the claim is not for time off work, it is for the cost of being permanently unable to work. In my judgment that is not merely a difference in degree, it is a difference in kind. There was nothing in Mrs Laird’s prior history to suggest that she would have to seek ill health retirement and I have set out earlier my findings as to what her actual and reasonable understanding of her medical condition. She was an ambitious high achiever who clearly intended and contemplated working for many further years. I do not consider that ill health retirement would reasonably have been considered as even a remote possibility at the time that the alleged misrepresentations were made and she entered CBC’s employment.

I shall accordingly address the losses claimed under this heading on the assumption that reasonable foreseeability does not need to be established and that the deceit damages rules apply.

As to quantification of CBC’s loss: the claim is based on a calculation by the administering authority of the cost to the council of the difference between the cost of early retirement benefits as actually granted and the cost of early retirement on voluntary terms (i.e. not in ill health) as would be available to any member under the Local Government Pension Scheme.

CBC’s case was supported by the evidence of Mr Marshall and the expert evidence of Mr Dick Crease, the actuary instructed by CBC to report on the correctness or otherwise of the calculation. Mr Crease concluded that the amount of £449,885.66 requested by the administering authority from the council “is below the true market value by at least £250,000”.

Mrs Laird submits that CBC’s claim is contrary to the provisions of the Pensions Act 1995 dealing with the inalienability of pensions. However, CBC is not seeking forfeiture of Mrs Laird’s pension. Nor is it seeking to do one of the acts prima facie prohibited by section 91(1) of the 1995 Act. The claim in relation to Mrs Laird’s pension is for damages comprising the additional costs which CBC has been, and will be, required to pay to GCC. CBC does not seek to prevent GCC from paying Mrs Laird her pension and does not seek such relief in these proceedings. Whether Mrs Laird pays any damages awarded out of pension receipts or from other resources is a matter of indifference to CBC.

I accept that CBC is not seeking to do an act prohibited by the 1995 Act, although the effect of its damages claim will be similar. However, I accept Mrs Laird’s submission that she has effectively “earnt” her statutory entitlements, and which include her potential right to an ill health retirement pension, by the totality of her local government service, the vast majority of which was prior to her employment by CBC. Further, Mrs Laird has effectively “paid” for her potential right to an ill health retirement pension (or at least the vast majority of it) by the provision of the transfer value of £249,000 which was transmitted to the GCC fund.

I also agree with Mrs Laird that this could lead to unjust results as she would have had close to the same entitlement if the transfer from the RCT scheme to the GCC scheme had not taken place. The scheme of the statutory structure is that the employee carries with them a bundle of rights against the scheme. There is force in the submission that it would be unfair for the employee to find in these circumstances that they effectively face a financial remedy equivalent to their entitlement when the vast majority of that entitlement is derived from their previous employment.

In my judgment, the vast majority of the ill health retirement pension cost claimed by CBC is not attributable to any wrong done by Mrs Laird, but rather to her accrued entitlements due to her prior local government service and her decision to transfer her accrued entitlements to the GCC fund. These are essentially independent matters or res inter alios acta and it would be wrong in principle and in justice for Mrs Laird to be effectively deprived of the fruits of her historic entitlement.

It may be that CBC could mount a claim for that part of the ill health retirement cost which related to Mrs Laird’s employment at CBC, but no such claim has been advanced or proven. I therefore reject CBC’s claim under this heading.

The next and final issue is:

Where a defendant in a deceit claim, or in a negligence claim, contends that the claimant must give credit against its losses for financial benefits which are alleged to have resulted from the tort, the evidential burden rests on the defendant to show that the claimant has received the benefit: Midco Holdings Ltd v Piper[2004] EWCA Civ 476 per Tuckey LJ at paras 22-6. In order to establish that the claimant received a benefit it is necessary to show that the same or equivalent benefit would not have otherwise have been obtained, and I reject Mrs Laird’s contention that there is a shifting evidential burden in relation to that issue.

In Komercni Banka AS v Stone & Rolls Ltd[2003] 1 Lloyd’s Rep 383 Toulson J considered the difficult question of the scope of the matters which may be taken into account as off-setting benefits. Having referred to Lord Reid’s statement in British Transport Corporation v Gourley [1956] AC 185 at p214 that it excludes matters which are “completely collateral” he stated as follows:

CBC submits that in the present case the relevant venture or transaction is the appointment of Mrs Laird as managing director, not merely the appointment of a managing director, and that financial benefits which it is the job of a managing director to deliver, as part of normal performance of his or her contractual duties, are not generally to be regarded as being intrinsic to the appointment of Mrs Laird.

Intrinsic benefits to an appointment would be if, for example, in a commercial context an appointee brought with them a list of client contacts – i.e. benefits that come with the appointment itself rather than the performance of duties thereafter.

I agree with CBC that benefits which are obtained as a result of the performance of Mrs Laird’s duties as managing director should be regarded as being collateral to her appointment. Those are benefits which derive from the performance of her employment and have been paid for by way of her salary.

Any other approach leads to the need to embark on the speculative and unsatisfactory evidential exercise carried out in this case whereby one inquires into what benefits were conferred through Mrs Laird alone, whether any such benefits would not have been procured by another managing director, and whether another managing director would have procured comparable benefits. This is a necessarily speculative exercise and one which is inherently difficult of proof.

Even if Mrs Laird’s claim was open to her in law, I am satisfied that the evidential difficulties raised by the claim mean that it has not been proved in fact. In particular, even if Mrs Laird could show that only she could have and did obtain a particular benefit for CBC, she cannot show that no other managing director would have procured a comparable benefit.

For example, the most likely alternative managing director was Mrs Garner, the other favoured candidate at the time of Mrs Laird’s appointment. Mrs Garner was an executive of proven calibre, who has held the chief executive post at a large Welsh unitary authority, Wrexham County Borough Council, since May 2003. Her particular speciality was transport, whereas Mrs Laird’s was housing. Whilst it may be that Mrs Laird’s housing knowledge enabled her to obtain benefits that Mrs Garner would not have done, Mrs Garner’s transport knowledge may equally have enabled her to obtain benefits that Mrs Laird would not have done.

Further, in the present case the claim is for unique benefits which would be unmatched by comparable benefits, even though Mrs Laird was off sick, from 30 July 2003 to 9 December 2003, and from 2 June 2004 to 9 August 2005.

Although consideration will be given to each of the alleged benefits claimed by Mrs Laird, my overall conclusion is that, save in two cases, Mrs Laird does not come close to proving that the benefits decisively derived from her performance as managing director. Whilst Mrs Laird made a contribution to the securing of the benefits in question, she did so in conjunction with others and, save in two cases, not in circumstances where it can be said that no benefit would have been secured without her. In any event in every case it has not been shown that no equivalent benefit would have been secured by an alternative managing director.

Mrs Laird claims that CBC received sums totalling about £1.45 million in March 2003 and that it was only through her actions that this was possible.

Mrs Laird submits that these monies were received due to her successful lobbying using her high-level Housing Corporation and Government contacts, and also due to CSL’s preparedness to execute very substantial contracts at short notice without usual safeguards and to persuade the other parties to do so. She submits that an alternative managing director would not have taken either of these two essential steps.

CBC accepted that Mrs Laird played her part in the favourable outcome, but not that she alone secured it. CBC submits that had it not been for the lobbying efforts of others in the political sphere, such as Cllr McKinlay’s and the local MP’s lobbying through the Local Government Association, the transitional arrangements might have been non-existent or less favourable than they were.

However, such lobbying was directed towards transitional relief and not, as Mrs Laird was lobbying for, LASHG underspend for the 2002-3 financial year. Further, such CBC lobbying was at regional level, whereas Mrs Laird was lobbying at national level and it is the national level which takes decisions in relation to the allocation of underspend.

I accept on the evidence that the grant received by CBC reflected underspend for the 2002-3 financial year and is not the transitional relief for which Cllr McKinlay and others had been lobbying. This is consistent with the grant consisting of the provision of such a large amount of monies at the end of the financial year on condition that they be spent at very short notice. I also accept that it was Mrs Laird’s knowledge, experience and contacts that led to the offer of this grant.

I do not accept, however, that the offer having been made, no other managing director would have taken all steps necessary to ensure that it was secured through prompt agreement to exchange of contracts on the Sochi Court project.

I therefore accept that this is a benefit which was procured by Mrs Laird, but not that it has been proven that no comparable benefit would have been obtained by another managing director during the full period of Mrs Laird’s employment.

Mrs Laird claimed credit for receipt by CBC of a sum in the region of £26 million by way of funding for the ALMO, Cheltenham Borough Homes (“CBH”).

The claim as originally made was for the entire benefit, but during the course of the trial it was narrowed to being a claim the funding would have been received about two years after it was actually received, i.e. that CBC would have lost the use of the £26 million for a couple of years or so, and not the £26 million itself.

The Housing Inspectorate carried out an indicative inspection of the council’s housing management function from around early November 2002. The primary point of contact between the Inspectors and CBC was Mr Davies, from whom I heard evidence.

Mr Davies had a “one to one” meeting with Paddy Mooney (the lead inspector) on 14 November 2002. The inspectors had found that 12% of the properties concerned (a bit more than 400 out of 3,500 properties) had not had their annual gas safety service done. Mr Mooney informed Mr Davies that while in a number of areas the service was two or three star the gas servicing issue would “cost you a star”, i.e. limit CBC to one star. Although other weaknesses were identified this was, at the very least, a major factor in the Inspectors’ decision to grade the council’s service as “fair” “one star” at the November 2002 inspection.

The inspectors presented their draft findings on 11 December 2002. The inspectors graded CBC as one star and uncertain prospects of improvement. The latter rating was largely attributable to the weakness of the Best Value Review (conducted by the former Chief Executive’s department) and concern about CBC’s ability to handle two major projects – the creation of the ALMO and the restructuring - at the same time.

Mr Huckle, Mr Davies and Mrs Laird were among those who attended the meeting with the inspectors at which the draft findings were presented. Mrs Laird spoke first and there was a general discussion about the improvement plan that needed to be put in place to which a number of people contributed.

Throughout 2002 Mr Davies had been working with the consultants Ernst & Young on the council’s application under section 27 of the Housing Act 1985 to the Secretary of State to create an ALMO. Mr Davies and his team provided the information that Ernst & Young used to draft the application. Mrs Laird was not involved in that process.

The section 27 application was a substantial document running to 351 pages, including a CBH Delivery Plant running to 149 pages.

The section 27 Application was not available to the Inspectors when they conducted their inspection and presented their draft findings. The full draft report was sent out late by Mr Mooney on 23 December 2002 with the council given until 20 January 2003 to respond. Mrs Laird claimed that the reason given by Mr Mooney was cover for the real reason for the extension to the council’s time for a response, namely her successful covert lobbying of Mr Mooney. She said that during this time she had discussions with Mr Mooney and the Inspectors. However, no one else at CBC was aware of any such discussions and there are no file notes substantiating such discussions.

Following the presentation of the draft findings under the leadership of Mr Davies and Mr Huckle an Improvement Plan was drafted and sent to the Inspectors under cover of a letter from Mr Huckle on 20 January 2003. Mrs Laird was involved in that letter but did not take part in the detailed work that went into preparing the Plan. A substantial amount of documentation was sent as well, including the section 27 Application.

The final report by the Inspectors was issued in March 2003 awarding one star promising prospects of success. The provision of the detailed CBH Delivery Plan contained within the section 27 application and the Improvement Plan had served to allay the concerns that had led the Inspectors initially to grade the service as uncertain prospects of success.

From 1 April 2003 CBH went live and Mr Davies became Chief Executive of CBH .

CBH is prospering at present under the leadership of Mr Davies and his team and has been rated as excellent with excellent prospects of improvement – the only ALMO so graded in the South West.

On the evidence I accept that Mrs Laird played a role in ensuring that in the improvement of the position between the draft and the final report of the inspectors that enabled the ALMO to go ahead. However, the detailed work was done by others and I am not satisfied that her role was critical to the improved prospects obtained or that she is solely or primarily responsible for the ALMO grant or its timing.

Mrs Laird did not invent the restructuring policy which she implemented. She implemented Phase 1, which went live on 29 April 2002, as it was her job to do. Cllr Smith’s regime planned it and consulted on the budget for it from December 2001. The cabinet model of governance was adopted in October 2001. Mr Lawrence Davison, agreed to step down as Chief Executive as the first step in the restructuring and the Directors Messrs. Cliff Ride, Paul Fry and Tony Morgan had already indicated that they were willing to take redundancy before Mrs Laird arrived.

It is clear that the restructuring policy which Mrs Laird implemented did lead to costs savings. However, it does not follow that she is responsible for that benefit.

In the first place, there is no reason to believe that another managing director could not have achieved equivalent or even greater savings.

Mrs Laird’s main point in that regard was that the appointment of another managing director would have involved delay and therefore deferred the benefit of such savings.

I find that if Mrs Laird had been rejected on medical grounds another managing director would have been put in place as soon as possible. That is likely to have been Mrs Garner who I find would have been in place by May 2002. Even if it had been someone else the appointee is likely to have been in place by July 2002.

This may have caused a slight delay in the implementation of the restructuring, but Mrs Garner or an alternative managing director may have found room for additional savings.

In any event, in the intervening period CBC could, in principle, have made the savings some other way, for example by increasing council tax by more than it did, or increasing car parking charges by more than it did. These would have been political and financial decisions to be taken by the regime in power at the time, in the light of the financial position, as reported to them.

In any event there is an artificiality about equating savings with benefits in the context of local council services. If, for example, more money was spent on staff, the staff might, in principle, deliver more for the council in financial terms than under the restructured staff configuration devised by Mrs Laird and the Conservative administration. Even if they did not, Cheltenham’s taxpayers might, in principle, have had a better service delivered.

For all these reasons I reject Mrs Laird’s claim that credit must be given for the “benefits” or accelerated “benefits” of restructuring.

Nor do I accept that Mrs Laird has proved that she uniquely conferred any related benefits due to there being a procurement officer or a “change in culture”. Mrs Garner or any other managing director may have conferred the equivalent or better.

Mrs Laird claims credit for the savings resulting from her “Save a Pound” management initiative in December 2002. This was a scheme whereby members of staff were invited to come up with cost saving initiatives. Mr Sheldon accepted that the “target savings generated from the exercise were £70,000”. He did not accept that any further savings in the following financial year were identified, but Mrs Laird claimed that credit for a recurrent saving should be given.

The savings through the initiative were achieved by such things as (i) removing an ISDN line used only twice a year (£650); (ii) sending all non-urgent post second class; (iii) no longer supplying free newspapers to senior managers; (iv) abolishing free lunches for in house meetings; (v) using the electronic diary and calendar facilities on council personal computers thereby saving the cost of paper diaries, and the like.

I accept that the “save a pound” initiative was a particular scheme of Mrs Laird’s and that another managing director is unlikely to have come up with precisely the same idea.

However, that does not mean that Mrs Garner or a different appointee would have not have come up with different ways of making savings by adjusting the council’s administrative practices. Mrs Garner, for example, might have taken a similar approach to Mrs Laird and advocated ruthless cost cutting. Had she done so, she might have cut the council’s administrative expenditure on post, newspapers, lunches and the like, either more than Mrs Laird did or less than Mrs Laird did. One will never know and because one will never know Mrs Laird simply cannot prove that this was a unique benefit, the equivalent of which would never have been procured by any other managing director.

Mrs Laird claims that she was responsible for £318,000 of extra income generated through increased car parking charges for 2002/3. Her evidence was that there was a problem in agreeing the way forward on this issue at the time of her appointment and that she was responsible for knocking heads together and procuring agreement.

It is not entirely clear on the evidence what the “problem” was in relation to car parking charges for the forthcoming year and Mr Ride could not recollect any particular problem or meeting being held with Mrs Laird to sort it out. He also pointed out that the increased income achieved was not out of line with that achieved in previous years and that it had already been publically budgeted for.

Given that increased income of £325,000 from car parking had been identified in the draft budget put out to the public in December 2001 I am satisfied that some way of ensuring that income was achieved would have been agreed upon prior to the February 2002 budget regardless of Mrs Laird’s input. She may well have helped achieve a satisfactory resolution but this would have had to be and would have been achieved without her.

Mrs Laird also claimed responsibility for benefits allegedly obtained in respect of the old Whitbread’s Brewery site development. Her case is that she was able to intervene and to resolve a dispute between the council’s planning officers and the developers Salmon Harvester thus saving the council the costs of a planning appeal and procuring benefits from the development.

It is questionable whether this is a “benefit” at all. As CBC submits, planning powers exist for public good, not for a council’s financial gain. A planning authority has a duty to abide by national and local planning policy. In making its decisions a planning authority has to weigh up potentially competing considerations – the local environment, traffic levels, economic benefits and amenity for neighbours and the community.

Planning decisions are not about maximising the revenue to the local authority. Indeed a planning authority may well conclude that the benefit to the local community of declining a development which cannot be quantified in pounds and pence outweighs any financial gain.

The first benefit CL claims is saving CBC the costs of defending what she alleges was a hopeless planning decision on appeal. This is not borne out by the facts.

When outline planning consent was granted in 1999 night club use had been specifically excluded from the outline planning permission granted by CBC on 24 June 1999. When the matter was considered by the Secretary of State on “call in” in 2000 night club use was not considered.

The opening hours imposed by the Secretary of State also effectively precluded nightclub use as, except for the cinema, use after midnight was precluded .

For that reason instead of seeking approval of reserved matters Salmon Harvester made a fresh planning application on 18 March 2002.

When the matter came before the planning committee on 10 October 2002 the officer recommendation was refusal because of the nightclub use.

When a duplicate application was made on 28 October 2002, the officer recommendation was again to refuse. The duplicate application again suggested a nightclub.

Berwin Leighton Paisner wrote on behalf of Salmon Harvester to Mr Ford challenging the view of the council’s officers that a nightclub was not included in D2 use and indicating the possibility that they would draw the letter to the attention of the inspector in support of an application for costs on the grounds that the council was acting unreasonably.

On 12 December 2002 the Planning Committee unanimously resolved to refuse permission.

Costs are only available against a party to a planning appeal if they act unreasonably. It is unlikely that the council would have been deemed to be acting unreasonably in the circumstances had it resisted the appeal given that it was at worst unclear at the time whether nightclub use fell within D2 and there was a recent Planning Inquiry in Walsall that had held that it did not.

The fact that Salmon Harvester dropped the nightclub proposal which they had so aggressively pursued rather suggests that they knew they were not on particularly solid ground. Indeed, they floated this as a possibility as early as 4 March 2003. Mr Noel’s evidence was that before the refusal of permission Salmon Harvester had been confrontational, but after they were co-operative. Mr Crohill gave evidence that the refusal of permission itself was the likely reason for the change of stance by Salmon Harvester on the nightclub as the nightclub was the primary reason for refusal.

Mrs Laird claimed that she took overall responsibility for the Brewery site and personally suggested major revisions. However, I accept the evidence of Mr Noel and Mr Crohill as to the respective roles of Mrs Laird and other officers. Mrs Laird was approached by Salmon Harvester and set in motion a series of meetings between them and council officers, primarily Mr Grahame Lewis and Mr Crohill who then negotiated the revisions in the scheme. Mrs Laird attended a couple of meetings.

As Mr Crohill stated, a “familiar planning process” was followed where an unsuccessful major developer approached the most senior officer in the organisation to progress matters. There is nothing to suggest that any other competent chief executive could not have done the same, namely, set in train negotiations between the unsuccessful developers and planning officers.

Mrs Laird stated that she held negotiations with Salmon Harvester which other officers were not aware of. She has provided no corroborative evidence of this, such as notes of those other meetings. The letters that are in the bundle between Mrs Laird and Salmon Harvester do not suggest that anything particularly significant was taking place behind the scenes and not in front of other officers at the minuted meetings.

I accept that the Old Brewery negotiation was a “collective effort”, in which Mrs Laird played a part, but most of the negotiation was done by Messrs Crohill and Lewis.

In relation to the other items claimed (or possibly claimed) under this head:

The sums paid under the section 106 agreement to the council and GCC are to pay for mitigation of the impacts of the development, on eg. traffic, parking, etc, and there is, therefore, no net benefit to CBC.

Under the section 106 agreement the Northern Relief Road sum was paid to GCC, not CBC, and therefore cannot be set off against the damages payable to the council.

Mrs Laird claims an alleged benefit in terms of a community space, but has not been able to establish that this was ever taken up.

Mrs Laird also claims benefits from the Council Tax payable on the residential units. The idea of residential accommodation was raised as early as 17 September 2001, long before Mrs Laird joined CBC.

For the reasons set out above CBC’s claim fails and is dismissed. I further hold that Mrs Laird has not established any entitlement to damages in respect of her contingent counterclaim.

It is over eight years since Mrs Laird joined CBC and much of the intervening period has been spent in bitter dispute before various tribunals, at much personal and financial cost. I very much hope that a line can now finally be drawn, allowing Mrs Laird to get on with her life and CBC to get on with the business of governing Cheltenham.