Council mutual to challenge High Court decision on freedom for boroughs to apppoint it.

The London Authorities Mutual (LAML) is set to appeal a High Court judgment that could limit local authorities’ freedom to appoint it.

Lord Justice Burnton declared on Friday that Brent Council acted unlawfully in side-stepping EU-regulated procurement procedures when signing up to the LAML.

In an earlier judgment handed down last month, Burnton ruled that Brent had acted without authority in participating in LAML.

In a statement, Nathan Elvery, chairman of LAML and director of finance and resources at Croydon council, said: “This is a very disappointing judgment and we intend to appeal because it runs counter to the legal advice of numerous eminent QCs and law firms, both before the creation of LAML and more recently, as local authorities joined the mutual.”

LAML is also appealing the first judgment, which is not expected to be heard until the end of the year.

The case was brought to the High Court after Risk Management Partners (RMP), a company providing insurance services to local authorities, pursued a test case against Brent. It alleged that the council had abandoned the EU-regulated public procurement process in which it, RMP, had participated, and joined LAML, which had not tendered.

Brent council has now obtained temporary insurance outside of the LAML while it appeals the ruling.

The mutual is open to all 32 London boroughs and now has six full participating members, with others set to join over the next three years. Following the judgment, councils will only be able to join LAML under a provision of the Local Government Act 2000, the so-called “well-being” power, if they prove that it is not doing so to save money on its insurance.

Kaz Janowicz, director of RMP, said: “We are delighted at the court’s findings. Our sole aim in this action has been to get back to a level playing-field. We are happy to compete with LAML, or indeed, anyone — all we ask is an equal opportunity to do so, and the court has now given us just that.”