Terms of appointment and further guidance 1 July 2021

Appendix 5: Indemnity against court costs and liabilities resulting from challenge work

1. Where the Auditor takes any such action in the discharge of their functions as is described in paragraph 2 below, PSAA will indemnify the Auditor, as specified in the contract, against any Expenses (up to a maximum of fifty thousand pounds (£50,000) which may be properly payable and are paid by the Supplier in so far as the same are not recoverable or recovered from other persons or bodies under the provisions of the 2014 Act or the 2015 Regulations or by order of the Court, provided that the Supplier has acted reasonably and has used all reasonable endeavours to recover such amounts from the relevant third party.  Full details are contained in Clause 28 of the Contract.

2. The actions to which the indemnity in paragraph 1 applies are as follows (all references are to the Local Audit and Accountability Act 2014):

  1. the consideration of and making of a public interest report or written recommendations under schedule 7 of the 2014 Act;
  2. the exercise of any function under section 22 of the 2014 Act in relation to the right to make objections at the audit;
  3. any application to the court under section 28 for a declaration that an item of account is contrary to law;
  4. any appearance as respondent to any appeal brought under the provisions of subsection (3) of section 28.
  5. the consideration of and issue of an advisory notice under Schedule 8 of the 2014 Act; and
  6. 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 Auditor shall notify PSAA in writing of such action via [email protected].

4. An auditor’s reasonable costs of dealing with questions and objections prior to legal action is a charge on the audited body. The initial cost of issuing an advisory notice is also a charge on the audited body.

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