Hussain v Sandwell Metropolitan Borough Council

A local authority may conduct pre-formal inquiries into alleged misconduct to determine whether a prima facie case exists and what action is appropriate. The formal arrangements under section 28(6) of the Localism Act 2011 become necessary when the authority proceeds to deal with an established failure to comply with its code and impose sanctions. The authority may investigate conduct predating the Act, subject to fairness. Powers under the Local Government Act 1972 and the 2011 Act may support investigations and publication where these serve proper financial administration, high standards, openness and accountability. Apparent bias in a preliminary investigator does not invalidate later proceedings where independent review and a fair rehearing eliminate any realistic risk of contamination. Publication of provisional findings may be lawful where the statutory data-protection conditions and the overriding requirement of fairness are satisfied.

The claimant, an elected councillor, sought judicial review of Sandwell Metropolitan Borough Council’s investigation into alleged misconduct concerning public-asset disposals and the handling of family parking tickets. He challenged the Council’s power to conduct pre-formal and formal investigations, investigate historic conduct, continue despite alleged bias and political motivation, and publish the Wragge Report, leading counsel’s Opinion and an Audit Committee report.

The claim followed an earlier refusal of permission and interim relief by Cranston J, after which the Court of Appeal granted permission on the low threshold of arguability. The central issues were whether the Council acted within its statutory powers, whether any procedural defects materially affected the future Standards Committee hearing, and whether publication breached data-protection or Convention rights.

1. Claim dismissed. The stay on the Council’s proceedings was lifted. Safeguards were ordered so that the Wragge Report itself would not be relied upon before the Standards Committee, although the underlying evidence and references to the Report could be used.
2. The Council had power under sections 111, 123 and 151 of the Local Government Act 1972 to investigate alleged financial wrongdoing. Proper financial administration is a statutory function, and an investigation into financial impropriety may also involve standards and employment issues. Section 111 provides ancillary support and is not a free-standing power.
3. Sections 1 and 27 of the Localism Act 2011 supplied alternative powers. Section 28(6) requires formal arrangements once the authority determines upon a formal inquiry into an allegation of code breach, but it does not prohibit proportionate pre-formal inquiries. Section 28(4) concerns how an established failure is dealt with, while section 28(11) confirms that a finding may arise outside the formal arrangements. Historic conduct may be investigated because the relevant trigger is the allegation, not the date of the conduct. The operative code is the code in force when the conduct occurred, subject always to fairness.
4. The Council’s Chief Executive could consult executive members without assuming their responsibility. Regulation 2 of the Functions Regulations allocates responsibility for the decision, not responsibility for every discussion leading to it.
5. The investigator’s objectionable comment could support a finding of apparent bias under the test in Porter v Magill [2002] 2 AC 357, but there was no actual bias in the interviews or Report. In any event, independent review by leading counsel, fresh investigation, and a full and independent Standards Committee hearing removed any realistic causal connection between the comment and the final decision. The reasoning in Competition Commission v BAA Ltd [2010] EWCA Civ 1097 reinforced that apparent bias is fact-sensitive and does not invariably taint a later decision.
6. Publication was within the Council’s powers and satisfied the relevant conditions in Schedules 1 and 2 to the Data Protection Act 1998. It was fair to publish provisional findings where there was a serious prima facie case, a strong public interest in openness and accountability, and publication of the Opinion gave a balanced context. Article 8 ECHR did not outweigh that public interest.
7. Any residual procedural unlawfulness would have been immaterial to the future hearing. The claimant retained full rights of representation, evidence and cross-examination before the Standards Committee.

• High Court (Administrative Court): the claim for judicial review was dismissed. The stay was lifted and safeguards concerning use of the Wragge Report were ordered.
• High Court (Administrative Court), Cranston J: permission and interim relief were refused on 20 May 2016.
• Court of Appeal: permission to seek judicial review was granted on 17 January 2017 on the low threshold of arguability; permission concerning interim relief was refused as academic.