In this blog series, LGR Practicalities, we break down the practical realities of LGR and how to approach dealing with it. In this blog, we are focusing on how to manage ongoing litigation and disputes when LGR is taking place.

Beyond establishing any new authority, the LGR process will demand a substantial investment of time and resources to ensure the smooth transfer of day-to-day operations and minimise any impact on service delivery. 

Disputes involving local authorities, whether arising from procurement, service delivery, contractual relationships, judicial review, or other areas, will continue to be litigated and initiated during the transitional period. 

Pursuant to the 2007 Act, Transfer Regulations and the SCO, all existing live proceedings and unresolved disputes will transfer to successor councils. Save where there is only one successor authority, a section 16 agreement will also need to be in place to deal with the transfer of disputes. If no agreement is in place, it might be unclear which council is responsible for handling a continuing dispute. This could result in delays, confusion, or blame being passed between successive authorities.

Information sharing

Local authorities undergoing reorganisation should try to engage in early conversations to agree on dispute identification, allocation and management. Early planning and clear agreements will be key to a smooth transition.

In line with the expectations under the Transfer Regulations, predecessor councils must supply to the successor council the details of all relevant contracts, legal action or proceedings and any other information reasonably requested relating to these matters. It is therefore vital that predecessor councils identify unresolved disputes/cases and prepare an accurate record of these. If external lawyers are engaged, then providing access to them will also be important without waiving privilege. Data sharing agreements will be vital.

Section 16 agreements

It is also important that section 16 agreements, which are entered into, contain further dispute-specific provisions and a detailed schedule of all transferring disputes to ensure clarity. Some areas that local authorities should include for each dispute are:

• a risk assessment of the dispute, including the financial exposure and likely duration;
• an agreement on how legal costs and settlements will be funded;
• legal representation details and how these will transfer;
• the reporting and monitoring arrangements for such disputes; and
• where multiple successor councils are involved, a clear allocation of responsibility and potentially indemnity arrangements, where one council will be taking on the dispute.

Engagement and practical steps

Prior to vesting day, predecessor authorities need to be engaging with other parties/their lawyers as well as witnesses and experts with regard to what LGR means for the dispute. This is important in all cases, but particularly in matters relating to individuals.

Where there are contracts in place relating to the litigation/dispute process, then these will transfer like any other contracts.

Consider whether there are witnesses who are currently officers but who will cease to be officers in the successor authority. Their continued support should be confirmed prior to vesting day, especially if witness statements are not yet complete. 

If there is physical evidence, ensure that this is transferred to the successor authority.

There should also be prior engagement with the court to set out that there will be a substituted party. The successor authorit(ies) will need to apply to the court to formally be substituted with effect from vesting day – the CPR are vague on exactly when this should happen, but it could be pre- or post-vesting day. If pre-vesting day, then the predecessor council could make the application with the consent of the successor authority. Authorities will want to make the application sooner where critical stages in the dispute are being reached – e.g. trial is imminent. This application should append the SCO. In adjudication or arbitration, a substitution will also be needed.

The transfer of functions is effected by statutory transfer but as this LGR Practicalities Passle series demonstrates, there is a lot of due diligence and thought needed about how services will be delivered post vesting day to be able to implement LGR successfully. It can be a daunting task and one that has to take place in a short time period to ensure effective transfer. 

Our team at Anthony Collins is well versed in the issues arising from LGR and can assist authorities (whether predecessor, continuing or new) with the process including due diligence and implementation.