Examination of Witnesses (Questions 40
- 59)
TUESDAY 30 JUNE 1998
COUNCILLOR STEPHEN
MURPHY AND
MR DAVID
WILMOT
40. So the confidentiality clause was a waste
of time?
(Councillor Murphy) We did not tell them.
41. The confidentiality clause was a waste of
time?
(Councillor Murphy) There was another issue about
the confidentiality clause as well because at the same time that
we were actually in discussion the insurers were looking at two
further cases and one of the comments that was being made at the
time was that they did not want to have publication of the settlement
because that may damage the cases that they were looking at and
any settlements that they may have to make in the other cases.
Mr Corbett
42. But the police proposed the confidentiality,
not the insurers?
(Councillor Murphy) It was a mutuality and that is
the difficulty we have got.
43. Who proposed it?
(Councillor Murphy) It is easy for the insurers to
say that they did not play a part in this. At the end of the day
there was a wide discussion going on at the time.
Mr Winnick
44. Councillor Murphy, would it not be right
to say that every member of the policy authority in Greater Manchester
is aware of the settlement?
(Councillor Murphy) No, I would not say that every
member is aware of the financial settlement.
45. You are aware, are you not?
(Councillor Murphy) No, I am not aware of the final
settlement. I have not seen anything on paper.
46. You are telling us that you have no idea
what the final settlement is?
(Councillor Murphy) Yes, I do.
47. You are answering to a Select Committee
of the House of Commons.
(Councillor Murphy) I do have an idea of what the
financial settlement was. The same as the Chief Constable, if
I am pressed and questioned to give an answer then I would not
refuse to give that answer; I cannot refuse to give that answer.
48. That indicates that you do know but we are
not pressing you to do anything, like we are not pressing the
Chief Constable to give answers which could be held to be in contempt
of court. Clearly you are indicating that you know the answer
as to what the settlement was. Therefore, would it not be true
to say that although perhaps not all members of the police authority,
most of the leading members, if not all of the leading members,
are aware of the figure?
(Councillor Murphy) Certainly the people who sat in
that room with me on those final days were aware of the discussions
taking place and the figures that were being talked about.
49. During the course of the court case and
the rest of it did the Chief Constable keep you aware of what
was happening?
(Councillor Murphy) Did the Chief Constable?
50. Yes. Did he have consultations with you
as the Chairman of the Police Authority?
(Councillor Murphy) I think apart from one of those
meetings, the Chief Constable was probably in attendance at most
of these discussions we had. At one of those meetings he was on
holiday, I think.
51. But as you say in the papers which have
been circulated, Councillor Murphy, the Police Authority were
not a party to the agreement; presumably you knew what was going
to be done over the case? Were you consulted by the Chief Constable?
(Councillor Murphy) We were consulted by the Chief
Constable. We were consulted by the insurers. We were consulted
by the barristers. We were consulted by our own legal people.
We were consulted by our own financial people.
52. So you were kept informed all the time?
(Councillor Murphy) We had to be because at the end
of the day, if this case was going all the way through and we
were not covered for the figures we thought we were covered for,
then as a police authority we would have had to have found the
money to fund the case.
Mr Winnick: Okay.
Ms Hughes
53. Could I ask you, Mr Wilmot, just to clarify
where we are with this status of the agreement. You clearly seem
to be under the impression that it is an order of the court because
you are clearly under the impression that were you to reveal it
today, the figure, you would be in contempt. Other information
sent to us by the insurers and others have used different terminology.
For example, they say that the settlement was submitted to and
approved by the court. This is the question we were trying to
clarify earlier: as to whether this is an order, in which case
you are in contempt; or whether it is simply an agreement that
the judge signed and endorsed, in which case you would not be
in contempt. I do not know whether you have any legal advice with
you today, but can you help the Committee with this? It seems
to me to be quite a crucial question.
(Mr Wilmot) The front sheet of the document of the
agreement, which has a number on it, (which I presume is the court
number for the document), starts off: "Before the Honourable
Mr Justice Owen sitting at Court 1 on 26 June 1995. Upon hearing
leading counsel for the plaintiff and legal counsel for the defendant,
and the plaintiff and defendant having agreed to the terms set
forth in the schedule hereto, it is ordered that..." My impression,
although I am not a lawyer, is that this is a court order.
54. Okay. That is helpful. It may be helpful
if you can clarify that later on. But thank you. That is helpful.
(Mr Wilmot) I repeat, if I am asked a direct question
by this Committee I will answer it.
55. That is why I am trying to seek clarification.
We would not want to put you in contempt of court, Mr Wilmot,
but there seems to still be some slight lack of clarity, although
what you have read out may be helpful. Could I ask Mr Murphy.
You have just implied that the insurers themselves have their
own reasons for wanting the confidentiality clause. You were talking
about other cases that they had in the pipeline, and that they
would not want the figure necessarily to be public. Could I tell
you that in a letter to the Committee on 6 May the insurers said,
in talking generally about these matters and how far confidentiality
clauses were the norm, they said that "... no insurance policy
issued by this Company to any police authority, or indeed any
other public body, has contained any provision or condition involving
the imposition of confidentiality clauses in the terms of claim
settlements." The whole drift, as well as that statement
from the insurers, is that as all parties in the end agreed, this
was not something that either they asked for or was common practice
in terms of their own commercial interests.
(Councillor Murphy) I do not think I would dispute
what you are saying in so far as it is not involving the insurance
policy. The actual comments that I made were in line with the
discussions that we did have on numerous occasions, in private,
in the Police Authority offices. It was the lead-up to whatever
took place at the end of the day. The case was initially leading
towards going to court. Then the case was actually in court up
to a certain element of evidence being given. We were having a
number of discussions with various people. The insurers were part
of that discussion. The legal people representing the insurers
were there and part of that discussion. When we were having that
discussion it was made quite clear when all the discussion went
on to confidentiality clauses, that they were in some difficulty
if there was not a confidentiality clause in there because there
were still a number of cases surrounding these issues which needed
to be settled. They were dealing with those because they were
our insurers on those cases as well. They did not want to have
any figures disclosed which set a precedent for those further
cases. That discussion took place.
56. That is not consistent with certainly the
letter and the tone of all the correspondence we have had from
the insurers who make it clear that the initiative came from Greater
Manchester Police; and whilst they agreed it in the spirit of
trying to reach an agreement, it was neither normal practice nor
was necessarily required in this particular case by the insurers.
(Councillor Murphy) I do not dispute where the initiative
came from. I actually made the comment that it was in the general
discussion that took place: that comments were coming from the
people representing the insurers, who were saying it would be
in their interests not to disclose these figures because of the
other cases that they were having to look at.
57. That is not a view which has been put to
us.
(Mr Wilmot) To support what Councillor Murphy is saying,
on 21 December 1994 the plaintiff, Derek Britton, settled out
of court with the insurers. A similar clause was inserted in that
settlement. That was part of this. There were four plaintiffs
actually.
58. That was after 1994 did you say?
(Mr Wilmot) That was before the Taylor Inquiry but
it was part of this whole series of civil actions against Greater
Manchester Police.
(Councillor Murphy) There were two further later.
(Mr Wilmot) My understanding then was exactly the
same as Councillor Murphy's. That clause was inserted in order
to prevent a public disclosure before the other cases were submitted.
(Councillor Murphy) The company we are talking about
is the MMI. At the time this was going through, the MMI was basically
a frozen company. They were not getting any business in. All that
they were doing was settling out the final claims that they had
as a company. One of the difficulties that they had, and they
expressed it quite openly, was that they needed to make sure that
they were settling their claims as economically as they possibly
could.
59. Just finally, notwithstanding some of those
issues about how and where and why this clause came into being
included in the settlement; Councillor Murphy, what justification
can you give, as the Chairman of the Police Authority, for the
inclusion of the confidentiality clause and for the practice of
not publishing in your annual report, as other police authorities
do, the total damages paid by Greater Manchester Police in any
one financial year?
(Councillor Murphy) I think the only comment that
I can make on that is that wherever you agree to pay out damages
at any stage, any organisation, if they need to pay out damages,
needs to make sure that they can keep those damages as low as
they possibly can. That is common sense for any organisation.
For an organisation like ours, if we were to be seen to be paying
out large amounts of money in compensation through our insurers
or whoever, you then feel you may become a soft touch. We have
to make sure that we are protecting the public interest. The more
compensation that is paid in cases like this, the higher the premiums
are that we have to pay at the end of the day. So whatever you
are doing, you have got to try and make sure you are keeping your
costs down; you are keeping your premiums down. By having confidentiality
clauses in agreements like this, it helps you to do that. So that
is a justification we would have to make. But, as we said, at
the end of the day on this one we were not a party to that confidentiality
agreement. We wanted to make sure that this case went to the end.
The one reason why it did not was simply because of the Legal
Aid system; the way it works; and because the insurers at the
end of the day could not get any recompense if they had won this
case.
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