LEGAL MATTERS - Key considerations for contemplating litigation
In an increasingly litigious society, parish and town councils are more frequently finding themselves caught up in litigation. Issues that may lead to legal proceedings, such as property disputes, contractual breaches, employment conflicts, governance concerns, or reputational challenges can be complex and high‑risk.
Here is a framework for councils, clerks and advisers to evaluate whether litigation is lawful, proportionate, and in the public interest, and how to navigate through the process.
Understanding the legal power to litigate
Councils are corporate bodies and may sue and be sued. The primary statutory power derives from section 222 Local Government Act 1972, which states:
“(1) Where a local authority considers it expedient for the promotion or protection of the interests of the inhabitants of their area –
(a) they may prosecute or defend or appear in any legal proceedings and, in the case of civil proceedings, may institute them in their own name, and
(b) 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.”
It is important that councils are able to identify which legal power is relied upon, confirm it applies to the dispute, and record the reasoning.
Although section 222 Local Government Act 1972 may provide a general statutory power to councils to engage in litigation, other powers may arise from contractual arrangements, statutory duties, or land ownership. It is important to ensure the council has the power to bring or defend proceedings, given the importance of avoiding acting beyond its legal power or authority.
Decision-making governance requirements
Councils must also ensure that their internal governance is in order. Decisions regarding involvement in legal proceedings must be taken at a properly convened meeting, with the litigation item clearly listed on the published agenda.
As discussion regarding the preparation, pursuit or defence of legal proceedings is confidential and legally privileged, so press and public must be excluded pursuant to section 1 (2) Public Bodies (Admission to Meetings) Act 1960 when the legal proceedings, or potential legal proceedings are discussed.
It is important for clerks to emphasise to councillors that details of legal proceedings, including potential legal proceedings, and any discussion regarding them must remain confidential.
This point cannot be made strongly enough and is often overlooked. This also applies to any committees that may be delegated authority for handling legal proceedings.
Any decision must be mentioned in the minutes as with any other confidential business. It must be carefully worded to ensure no prejudice to the council’s position in the legal proceedings.
Councils must remember to demonstrate impartiality, absence of bias and predetermination, and proper consideration of officer and legal advice. It is important that any councillor who may be a party to or affected by the legal proceedings absents themselves from any meeting.
Public law considerations and judicial review risk
As public authorities, councils must observe basic administrative law principles when handling legal proceedings. These include:
• rationality (Wednesbury reasonableness);
• proportionality;
• proper purpose and relevant considerations;
• fairness and consistency;
• public sector equality obligations under s.149 Equality Act 2010.
It is important that even though confidential, discussion and reasons for reaching decisions are carefully documented. Documentation should clearly record that the council’s obligations and duties were considered. Well documented decisions may reduce the risk of judicial review or put the council in the best position to successfully defend any application for one.
Legal advice and analysis of the prospects of success
In order for a council to make a robust decision whether to issue or defend legal proceedings, it is essential to obtain independent legal advice. Such advice should be sought at an early stage to ensure no opportunity to resolve the dispute without legal proceedings is missed, and to fully understand what may be involved.
If legal proceedings are issued against a council, it should check to see if the litigation is covered by its policy of insurance. This may give access to early advice, and legal and financial support throughout the process. Early legal advice should still be sought and in most instances should include the prospects of success, remedies available, evidence required, procedural risks and limitation periods, compliance with pre‑action protocols and alternative dispute resolution.
The council should record the advice received, that it has considered that advice, and explain why the legal advice is followed or, if appropriate, why it was departed from.
Financial and budgetary considerations
Councils must not forget to demonstrate prudent financial management. Litigation costs, by their very nature, are often considerable. Costs can exceed initial estimates substantially due to the unpredictable nature of litigation.
At an early-stage, councils must assess the total estimated costs, including solicitors, counsel, and any experts’ fees. They also need to consider the impact on budget, reserves, and potential precept changes, legal expenses, insurance coverage and exclusions, exposure to adverse costs in the event of non-compliance with procedural requirements, or failing to succeed in the claim or successfully defend a claim. Councils also need to consider the long-term financial implications.
If they find themselves wrapped up in litigation, they should be mindful that auditors may review the decisions made to determine whether expenditure was lawful and proportionate. A decision to incur legal costs of £5,000 to recover a contractual debt of £100 is questionable and commercial reality may need to override principle.
A common misconception is that councils need to tender for legal services; they do not, although it is appreciated, they may want to consider more than one estimate to get best value.
The statutory power to incur costs for legal services is by virtue of section 111 Local Government Act 1972 provided such fees are calculated to “facilitate, or [are] conducive or incidental to, the discharge of any of their functions.” As with funds for any other legal services a council may require, it is useful for there to be some provision made in the parish or town council’s budget, even if just for initial legal advice.
It is worth considering delegated authority to the clerk to obtain initial legal advice (up to a certain financial limit). This can save vital time, and streamline processes.
Risk and reputational analysis
Litigation involving councils is often high-profile and can gain interest from media outlets. Residents are likely to show a keen interest, given that legal proceedings will be funded from public funds, as will any payment of damages. When assessing the legal merits and financial considerations, it is important that those risk assessments feature the impact of legal proceedings on the council’s reputation.
The council must be ready to present a robust public front.
Exploring alternative dispute resolution (ADR)
Courts expect parties, particularly public bodies, to consider ADR before commencing or defending legal proceedings. Types of ADR include mediation, structured negotiation and without-prejudice meetings. The importance of exploring ADR is constantly increasing and councils risk cost sanctions if ADR is not explored.
It is important not just to consider ADR prior to legal proceedings; it is also important to review throughout. The strength of the parties’ positions and prospects of success can change and it is important they are kept under review. If a dispute can be resolved through ADR it is likely the overall costs will be lower.
Defamation
The rise of social media and keyboard warriors has made councils susceptible to attack online. It is important for councils to remember that as public bodies they cannot sue for defamation (libel and slander).
Councils must consider alternative tools such as seeking factual corrections, reputation management, protection from harassment or encouraging and supporting individual councillors to seek advice.
Conclusion
Litigation is a serious step for any council, involving not only legal risk but also governance, financial and reputational responsibilities. A robust, well‑documented decision-making process and evaluating all relevant factors, can ensure that any decision to litigate is lawful, justified, and in the public interest.
Kate Jackson is a partner at Surrey Hills Solicitors LLP who provide legal services for local authorities, especially parish and town councils. These services cover advice on all aspects of local government law and practice including contracts, village greens, allotments and litigation, and handles property transfers and leases including community asset transfers.
www.surreyhillssolicitors.co.uk
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Written by Kate Jackson, a partner at Surrey Hills Solicitors LLP
As appeared in Clerks & Councils Direct, January 2026
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