The Westminster District Audit Case: Generally Applicable Legal Principles

Author:Mr Andrew Lidbetter
Profession:Herbert Smith

The Westminster City Council district audit case, Porter v Magill [2001] UKHL 67 with its twists and turns has made the headlines on a number of occasions. Most recently the House of Lords has given judgment in favour of the auditor against Dame Shirley Porter and Mr Weeks and certified that a sum of approximately 20 million be paid by them to the Council. The policy of targeting marginal wards for the sale of council housing stock was held by the House of Lords to be unlawful. Lord Bingham stated it was "a deliberate, blatant and dishonest misuse of public power" (para 48). The purpose of this update is to highlight the points of general application for all regulators which emerge from the various judgments.

The relevant administrative law principles

Lord Bingham stated substantive principles which, although set in a local government context, are of application to all regulatory authorities (para 19):-

(1) Powers conferred on a local authority may be exercised for the public purpose for which the powers were conferred and not otherwise; and

(2) Such power are exercised by or on the delegation of councillors. It is misconduct in a councillor to exercise or be party to the exercise of such powers otherwise than for the public purpose for which the powers were conferred.

Looking specifically at the local government audit regime Lord Bingham added that if councillors misconduct themselves knowingly or recklessly it is regarded by the law as wilful misconduct and if this is found to have caused loss to a local authority the councillor is liable to make good such loss to the council. These principles are not new but their application to the facts led to judgment being given against the two councillors.

One particular practical point emerges from the application of the principles in the present case. Lord Bingham referred to the debate about whether the councillors were able to rely on legal advice. He noted that the lawyer concerned had not been given access to all relevant information. He had "received no written instructions and gave no written advice" (para 39). Also, the lawyer had not been asked all the questions which should have been put to him. In this instance he had not been asked whether, if the policy of designating council properties for sale in marginal wards for the purpose of securing electoral advantage was unlawful, would the policy have become lawful if, with the same objective, and in order to conceal the targeting of...

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