Jolyon Patten explains why local authorities cannot act as insurers
In a landmark two-part judgment (Risk Management Partners Ltd v Brent London Borough Council and others [2008] All ER (D) 226 (May)) which will have far-reaching implications for the insurance industry and for local authorities, the High Court has found that Brent LBC had no power to participate in London Authorities Mutual Limited (LAML), a mutual insurer for London borough councils. It also found, in principle, that no local authority can participate in such a mutual if it does so to save money on its insurance. In additional (obiter) comments, the judge held that there might be circumstances in which a local authority could do so, but that there was no evidence that LAML could bring itself within those circumstances.
A second judgment in the same case addresses for the first time in the UK the so-called Teckal exemption to EU rules on public procurement. Here, it was found that Brent did not have the necessary control over LAML to bring itself within the exemption and accordingly was
