01 September 2008
Islington has become the seventh borough to join the London Authorities' Mutual Ltd (LAML), despite lingering legal questions over the insurance-buying group.
Mike Curtis, director of finance at Islington Council, said: "We've reduced annual contributions to the insurance reserve by embracing risk management and being prepared to innovate. Collaborating with like-minded authorities to reduce cost and drive savings through pooled insurance risk was what we wanted."
In June the High Court ruled Brent Council could not participate in the group as it had broken procurement rules when it abandoned its tender process to join the mutual. However, this judgment did not prevent other councils joining LAML (News, 19 June).
"There could not be better proof that despite the recent court decision LAML will continue to attract councils that want to cut the cost of insurance premiums," said Nathan Elvery, executive director of resources & customer services at Croydon Council and chair of LAML. "We are challenging that decision in the Court of Appeal in the autumn and are not alone in expecting the lower court's verdict to be overturned," he added.
According to a briefing note from legal firm Eversheds, the judgment "is unlikely to come through the appeal process unscathed". It said the judgment was "unhelpful, poorly argued and would not be supported by the majority of local authority lawyers". It added the Court of Appeal would have to comment in more detail on how councils could justify participation.
No date has yet been set for the appeal.