16/05/2008: Judgement in high court case

At the High Court today (Friday 16 May 2008) Lord Justice Stanley Burnton found against Brent Council on two key points and in the council's favour on a number of other points in the second part of a case concerning Brent's participation in the first mutual assurance company to be set up in the UK for over 100 years.

London Authorities Mutual Limited (LAML) is an insurance company set up by a number of London local authorities, including Brent, so that councils could get a better deal in respect of insurance arrangements. It was intended to bring down the costs of council premiums by as much as 15 per cent in a market dominated by just three main providers of insurance.

A private company, Risk Management Partners (RMP), is seeking damages on grounds that Brent, in giving the bulk of its £500,000 annual insurance business to LAML was in breach of the Public Contract Regulations 2006 by failing to complete a competitive procurement exercise beforehand.

Judgement in the first part of the case was handed down on 22 April 2008 when Lord Justice Stanley Burnton declared that the Council did not have the power to participate in LAML. Brent was given permission to appeal against this decision and an appeal has now been lodged with the Court of Appeal.

A spokesman for Brent Council said: "We are disappointed with this outcome and the council is considering whether or not to make an appeal in the second part of this case. This judgement has wider implications for the government's vision for delivering shared services and value for money."