DMFD219 Grenfell Legal Costs

1.1.    Report LFC-23-100y explains that the Grenfell Tower Inquiry’s (the Inquiry’s) evidential hearings concluded in July 2022. Core participants, including the London Fire Commissioner (LFC), provided further submissions to the Inquiry in autumn 2022, which were heard orally in November 2022. It is now anticipated that the Chair of the Inquiry, Sir Martin Moore-Bick, will publish his report related to Phase 2 of the Inquiry in 2024. There is ancillary litigation related to the Grenfell Tower fire. Some of those claims have now been settled and others are ongoing.
1.2.    Deputy Mayor for Fire and Resilience Decision (DMFD) 103 gave approval for the LFC to incur revenue expenditure of £2,953,984 in 2021-22; DMFD150 gave approval for the LFC to incur additional revenue expenditure of £3,480,158 (which includes a 15 per cent contingency) for 2022-23; DMFD190 gave approval for the LFC to incur additional revenue expenditure of £1,542,874 (including a 15 per cent contingency) for 2023-24, for legal costs related to the Grenfell Tower fire.
1.3.    This report is the latest in a series of reports over the past four years relating to authority to incur costs in respect of legal costs arising from the Grenfell Tower fire.
 

2.1.    This decision’s objective is to enable the LFC to continue engaging in legal processes related to the Grenfell Tower fire during 2023-24.
2.2.    It has been necessary for the LFC to engage external legal resource to assist London Fire Brigade’s General Counsel's Department in relation to work arising out of the Inquiry, and ancillary litigation.
2.3.    The nature of the work, and requests made of the LFC by the Inquiry and ancillary litigation, make it extremely difficult to predict accurately the totals for each legal resource, and when that resource will be needed.
 

3.1.    The LFC and the Deputy Mayor for Fire and Resilience (Deputy Mayor) are required to have due regard to the Public Sector Equality Duty (section 149 of the Equality Act 2010) when taking decisions. This in broad terms involves understanding the potential impact of policy and decisions on different people, taking this into account and then evidencing how decisions were reached.
3.2.    It is important to note that consideration of the Public Sector Equality Duty is not a one-off task. The duty must be fulfilled before taking a decision, at the time of taking a decision, and after the decision has been taken.
3.3.    The protected characteristics are: age, disability, gender reassignment, pregnancy and maternity, marriage and civil partnership (but only in respect of the requirements to have due regard to the need to eliminate discrimination), race (ethnic or national origins, colour or nationality), religion or belief (including lack of belief), sex, and sexual orientation.
3.4.    The Public Sector Equality Duty requires decision-takers in the exercise of all their functions, to have due regard to the need to:
•    eliminate discrimination, harassment and victimisation and other prohibited conduct.
•    advance equality of opportunity between people who share a relevant protected characteristic and persons who do not share it.
•    foster good relations between people who share a relevant protected characteristic and persons who do not share it.
3.5.    Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:
•    remove or minimise disadvantages suffered by persons who share a relevant protected characteristic where those disadvantages are connected to that characteristic
•    take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it
•    encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.
3.6.    The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons’ disabilities.
3.7.    Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:
•    tackle prejudice
•    promote understanding.
3.8.    An Equality Impact Assessment (EIA) was undertaken on 27 July 2020 concerning the legal costs related to the Grenfell Tower fire. The EIA found that the impact on those with protected characteristics is likely to be negligible. The EIA has been reviewed and the position is unchanged in this report, on the basis that this report does not propose any change that will impact on either the public or service users. It simply seeks authority to incur additional expenditure in respect of legal costs in relation to the LFC’s response to the Inquiry and ancillary litigation.
 

Workforce comments
4.1.    The Fire Brigades Union is a core participant in the Inquiry and has its own legal representation. In the circumstances, decisions regarding LFC spend on legal representation and advice are not suitable for workforce consultation, and the confidentiality rules preclude any meaningful discussion.
Conflicts of interest
4.2.    There are no conflicts of interest to declare from those involved in the drafting or clearance of this decision. 
 

5.1.    This report recommends that revenue expenditure of up to £2,464,753 plus a 15 per cent contingency of £369,712, totalling £2,834,465 during 2024-25  is agreed for 2024-25 to secure legal advice and representation for the LFC and appropriate individuals in relation to the Grenfell Tower fire.
5.2.    If this decision is agreed the legal costs incurred, and anticipated, to date are as follows:

5.3.    LFC’s annual budget includes an amount of £694,000 for legal costs associated with the Inquiry. It is anticipated that the majority of any additional costs incurred over and above the budgeted sum of these costs will be recovered from the insurers. Part two of this report provides further information on anticipated expenditure.
5.4.    If it is found that the costs recovered from insurers does not cover all future liabilities, LFC will be required to reduce its expenditure and/or find compensatory savings to meet any funding gap.
 

6.1.    Under section 9 of the Policing and Crime Act 2017, the LFC is established as a corporation sole with the Mayor appointing the occupant of that office. Under section 327D of the Greater London Authority Act 1999, as amended, the Mayor may issue to the LFC specific or general directions as to the manner in which the holder of that office is to exercise his or her functions.
6.2.    By direction dated 1 April 2018, the Mayor set out those matters for which the LFC would require the prior approval of either the Mayor or the Deputy Mayor.
6.3.    Paragraph (b) of Part 2 of that direction requires the LFC to seek the prior approval of the Deputy Mayor before “[a] commitment to expenditure (capital or revenue) of £150,000 or above as identified in accordance with normal accounting practices”. Many of the individual items in the table attached as Appendix 1 (LFC-23-000b) in Part 2 of this report do not fall within the category of matters for which prior approval must be sought; they are contracts and arrangements already entered into, or individually fall below the £150k threshold. However, it is considered prudent to provide details of the costs, insurance reimbursement and an overall financial picture, in addition to the reporting through the ordinary budget mechanisms, to seek prior approval of the Deputy Mayor for the avoidance of doubt.
6.4.    The LFC may, under section 222 Local Government Act 1972, where it is considered:
“expedient for the promotion or protection of the interests of the inhabitants of their area … prosecute or defend or appear in any legal proceedings and, in the case of civil proceedings, may institute them in their own name, and … they may, in their own name, make representations in the interests of the inhabitants at any public inquiry held by or on behalf of any Minister or public body under any enactment.” 
6.5.    It is implicit in the above that the LFC may authorise spending and the instruction of outside experts. Notwithstanding this, the powers granted by section 222 of the 1972 Act constitute a function of the LFC and Section 5A (1) of the Fire Rescue and Services Act 2004 (2004 Act) states that a relevant fire and rescue authority may do anything it considers appropriate for the carrying out of any of its functions, or anything that it considers appropriate for purposes incidental, whether directly or not, in relation to its functional purposes. This includes incurring spending in furtherance of the powers under section 222 of the 1972 Act.  
6.6.    The participation by and representation of the LFC in the Grenfell Tower Inquiry, and associated inquiries and legal matters, fall within section 222 of the 1972 Act and section 5A(1) of the 2004 Act.
6.7.    These comments have been adopted from those provided by the LFC’s General Counsel Department in report LFC-23-100y to the LFC.
 

Appendix 1 – LFC-23-100y Part 1 report – Legal Costs Related to the Grenfell Tower Fire.