Appendix 1: Indemnity against court costs and liabilities
1. Where the Firm takes any such action in the discharge of their functions as is described in paragraph 2 below, PSAA will indemnify them against any Expenses (up to a maximum of seventy-five thousand pounds (£75,000)) which may be properly payable and are paid by the Firm if they are not recoverable or recovered from other persons or bodies under the provisions of the Act or the Regulations or by order of the Court, provided that the Firm has acted reasonably and has used all reasonable endeavours to recover such amounts from the relevant third party. Clause 27 of the contract provides full details.
2. The actions to which the indemnity in paragraph 1 applies are as follows (all references are to the Act):
- The consideration of and making of a public interest report or written recommendations under schedule 7.
- The exercise of any function under section 22 in relation to the right to make objections at the audit.
- Any application to the court under section 28 for a declaration that an item of account is contrary to law.
- Any appearance as respondent to any appeal brought under the provisions of subsection (3) of section 28.
- The consideration of and issue of an advisory notice under Schedule 8.
- Any application for judicial review under section 31 or any appearance as respondent to any application for judicial review made in respect of the exercise of the auditors’ functions.
3. Prior to taking such action as described in this paragraph, or on receipt of information about any action against them, the Firm must notify PSAA.
4. A Firm’s reasonable costs of dealing with questions and objections prior to legal action is a charge on the body, as is the initial cost of issuing an advisory notice.