The fiduciary duty of a local governor

• Main Author: Barratt, John Kirkman
• Published: University of Cambridge 2004
• Subjects: 320.8
• Online Access: https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.596405

20^th century assertions of a ‘ratepayers’ trust’ are echoes of the largely-forgotten ‘public trust’ applicable to all public expenditure decisions regulated by law. The dissertation seeks to demonstrate that: 1. Constitutional arrangements have evolved through compromises between central and local powers and have excluded judicial review from issues of administrative merit. Local expenditure’s administrative merits are therefore not controlled judicially, but by local democracy and central administrative processes. 2. Judges, traditionally influenced by government as ‘justice’, have continually defined unlawful decision-making by reference only to lack of authority or of judicious quality. 3. The House of Lords, in 1827, enforced restitution of misapplied public assets as a breach of trust, but did not add new lawfulness criteria. 4. When rates provided most non-prerogative public expenditure, and the regulative Municipal Corporations Act, 1835, brought borough funds within the public trust, ratepayers became frequent relator-litigants. 5. The public trust was never authoritatively confined to rate-funds. 6. No statute has created an additional ratepayers’ trust, and the Local Government Act, 1933, removed all previous ‘ratepayer’ rights as such. 7. Where expenditure is unlawful, but no private right is injured, the breach of public trust can be litigated only by the Attorney-General acting for the general public, by a local government auditor, or by a local authority on behalf of its inhabitants. Ratepayers, as such, have no standing. 8. Except, perhaps, for Lord Diplock in <i>Bromley</i> [1983], there is no judicial authority on which to found a local governor’s fiduciary duty beyond that of the public trust. 9. Despite the abolition of audit surcharge by the Local Government Act 2000, there remains jurisdiction to order local governors to compensate public funds for misapplication. 10. The Attorney-General’s quasi-judicial monopoly of relator actions is inevitably compromised in cases involving misapplication of central funds. The courts have jurisdiction to create an alternative process for compensation.