Insurance Companies

The Independent, 27th March 1996
by Patricia Wynn Davies

A council voted yesterday to suppress an independent report into one of Britain’s worst child sex abuse scandals because of fears that it could help seriously damaged victims in their legal claims.

The decision by Clwyd county council came after an 11th-hour intervention by Municipal Mutual, its insurers, who threatened to cancel the authority’s cover against claims for a possible £20m in compensation from abused former residents of care homes in the county.

Welsh Labour MPs condemned the move as “Kafkaesque” – while the affair could set worrying precedents for the gagging of future council-initiated inquiries. That is because it appears to establish that a council’s duty to protect its finances from legal action will always take precedence over its duty to protect children by revealing the mistakes and failings of the past.

The inquiry team, led by former Derbyshire social services director John Jillings, began work two years ago amid widespread concern about sexual and physical abuse in North Wales children’s homes. The report into seven Clwyd homes is estimated by Labour MPs to have cost at least £500,000, but most of the 40 copies in circulation will now be pulped after all but a handful of Clwyd’s 64 councillors opted to halt publication.

The investigation covered one of the longest-running and most serious abuse scandals involving children in local authority care. From 2,000 statements and 150 complaints, 58 files were sent to the Crown Prosecution Service, but just seven men were eventually convicted of sex abuse or assault in separate prosecutions brought during a four-year police investigation covering 46 homes in total.

John Allen, formerly of the Bryn Alyn Home, Wrexham, was jailed for six years for sex offences against boys. Peter Howarth, former deputy head of the council-run Bryn Estyn, near Wrexham, was jailed for 10 years for assaulting seven boys between 1974 and 1984.

According to North Wales sources, among a host of findings the report criticises Clwyd social services’ running of its own homes, the infrequency of visits to homes by the Welsh Office’s Social Services Inspectorate, and inadequate responses by the authorities to signs that children in care might be being abused.

The interests of the children often took second place to the preservation of professional positions, the report is understood to say. The interviewing methods of the North Wales Police are also said to have been raised, and the report highlights the need for a judicial inquiry because of the refusal of some witnesses to speak to the Jillings team.

Clwyd hurriedly called off a press conference to launch the report last Friday after Browne Jacobson, solicitors for the Municipal Mutual, insisted that its contents could help up to 40 abuse victims secure compensation for their suffering. Some former residents were so traumatised by their childhood experiences in the homes that they later committed suicide.

Municipal Mutual got into financial difficulties in 1991, is in a “solvent run-off” situation and is prevented from writing new business. Outstanding business is being handled by Zurich Mutual.

Councillors were also warned that they could be made personally liable for legal payouts, risking bankruptcy, disqualification from office and loss of their homes. They were likewise warned that any publicity that could create the climate for more claims risked being construed as helping alleged victims. The gag the council has decided to impose on its own members is such that they are prevented from even revealing the report’s recommendation for a judicial inquiry.

Michael Beloff QC advised the council last week that it could risk losing its insurance cover if it released a report in which negligence was admitted. He also advised that a council was under no legal duty to inform the public of anything and that the fiduciary duty duty of trust of a local authority towards its electors and taxpayers was first and foremost to look after its financial interests. Yet Westminster Council felt able the day before yesterday to sanction publication of a report criticising it for housing homeless families in asbestos-ridden tower blocks.

The May 1991 report into “pin down” where children were kept in solitary confinement was commissioned and published by Staffordshire County Council whose insurers later paid out pounds 1.7m in compensation shared between about 140 victims.

Ron Davies, the shadow Welsh secretary, has written to William Hague, Secretary of State for Wales, urging him to place the report in the House of Commons library for MPs to consult. Members could then raise its contents on the floor of the House under the protection of parliamentary privilege.

Rhodri Morgan, Labour MP for Cardiff West, said yesterday: “It is just not credible in the late 20th century that we are going to be shredding this report. It is positively Kafkaesque. If it involves a change in local government law or executive action by the Welsh Office then Mr Hague must take that action.”

But the Welsh Office’s response was that the affair served to confirm that it had been “right” to set up a “paper investigation” by child-care expert Nicola Davies QC, who took no evidence. While most council members agreed to abide by the legal opinion, one said: “I agree that admitting liability in specific terms would void the insurance. But it is outrageous if you cannot even acknowledge the existence of a problem because it would cause extra publicity.

“Britain ought to wake up to the fact that it’s got a walking time bomb on its hands with people around the country having done the most awful and lasting damage.”

Ms Davies, appointed by Mr Hague’s predecessor John Redwood, recommended a thorough examination of Clwyd and Gwynedd’s social services departments and of private children’s homes. She rejected a Cleveland-style full-blown judicial inquiry, saying that since it would deal with events before 1989 it would be mainly of “historical interest”.

Adrianne Jones, the former Director of Social Services for Birmingham, was appointed to head the examination and will report to ministers in May.

But the Clwyd case raises the prospect that other council inquiries would be suppressed or not even begun.

The Independent, 5th April 1996
by Patricia Wynn Davies

A leading insurance company tried to prevent a council investigation of one of Britain’s worst child sex-abuse scandals, saying that it would be a “hostage to fortune” and a “dress-rehearsal for claimants”.
When the council went ahead with the investigation, the insurer took action to ensure its findings were not made public.

The behaviour of the Municipal Mutual, insurer of Clwyd County Council, impinged on normal democratic procedures, according to the suppressed independent report into the abuse scandal at care homes in the county. Exclusive extracts from the report, seen by the Independent, also show that fears by the Municipal Mutual of victims launching legal actions helped to ensure that a full report of an earlier investigation into the abuse was never seen by elected councillors, and was confined to a very small group of senior social services personnel.

Clwyd, which was split into three councils last Monday, commissioned an independent inquiry panel led by a former Derbyshire social services director, John Jillings, two years ago but capitulated in the face of threats by the insurers, whose business is now handled by Zurich Mutual, that the county’s insurance cover would be revoked if the report was published.

The latest insights into what is likely to rank as one of the most serious cover-ups of professional failure, show the insurers opposed the Jillings inquiry from the outset.

Councillors appointed the Jillings team in response to fears that a paedophile ring had taken hold in children’s homes over a 20-year period of abuse. The panel unearthed evidence of disciplinary proceedings against 51 care staff, going back to 1974, and 13 convictions, and described the abuse of children as “frankly appalling”. But, in February 1994, the insurers wrote to Clwyd’s county secretary, saying the inquiry would be “a hostage to fortune”. “Every inquiry is a further dress-rehearsal for claimants and a further incentive to the ‘bandwagon’ syndrome’.”

The report says that the insurers’ interests “impinge on the established democratic and constitutional arrangements of England and Wales”.

The 1990 conviction of Stephen Norris, the officer in charge at Cartrefle children’s home, for indecently assaulting three boys, was one of the first outward signs of a much wider abuse regime, but usual procedures do not appear to have been followed.

Since Norris – later convicted of serious sexual assaults against boys at the Bryn Estyn home – had worked for the council for nearly 20 years, his past contacts with children came up for review. But on the insistence of Municipal Mutual, the inter-agency Area Child Protection Committee was only ever allowed to see a 10-page synopsis of a critical report it had commissioned from outside experts. The social services committee was also confined to receiving the summary.

The explanation was that some matters were sub judice because of an on-going police inquiry, but the Jillings investigation reports a letter from the county solicitor saying: “In addition, the . . . insurers indicated that the county council could in certain circumstances invalidate its insurance cover.”

Social-work experts said yesterday that no investigator would wish to prejudice criminal prosecutions, but that the way reports were written rarely raised that kind of risk. It was also “highly unusual”, according to one social-work inspector, for relevant councillors not to receive a full report.

The Jillings team also reported that pressure from Municipal Mutual blocked the routine practice of placing public notices in newspapers seeking information from former residents and staff. “Our experience…is that such notices only encourage a ‘bandwagon’ of claims with adverse publicity.” The company also sought to control claims to the Criminal Injuries Compensation Board.

The report relates how children regularly ran away from Bryn Estyn. Former residents told the panel that punishments included being punched in the face, stomach or testicles, with boys being ordered to beat up and even defecate on others.

In the meantime, the Welsh Social Services Inspectorate did not inspect a single home. The inspectorate is quoted as saying in 1992 that: “There is no evidence to suggest that this problem child sex abuse occurs frequently. Because of its nature, inspection, review, monitoring and spot checks are all equally ineffective as methods of finding or preventing it.

“Attempts to ensure that this problem does not happen should certainly not drive the way we manage, monitor and inspect children’s homes.”

Lawyers at police insurance company tried to discourage inquiry – Suppressed report suggests possibility of link between dozen deaths and maltreatment in care

The Times (London), 3rd June 1996
By Dominic Kennedy, Social Affairs Correspondent

The insurance company whose solicitors tried to discourage Clwyd County Council from holding a wide-ranging inquiry into child abuse also insured North Wales Police, some of whose officers were alleged to be among the abusers.

The Jillings report cites a letter from the insurers’ solicitors to Clwyd in November 1993 criticising statements that the council had badly let down children in its care. This followed the conviction of a man for sexually abusing boys in care. “An expression of regret to a child who has suffered sexual abuse is often regarded as part of the healing process,” the report says. “The independent panel would not like to think that such expressions of concern are to be condemned.”

The insurers’ solicitor wrote to Clwyd’s county secretary on February 24, 1994: “We do not see why it is necessary to have such a wide-ranging inquiry. The police have conducted what has been described as the most extensive inquiry into child abuse ever carried out.”

The Jillings report highlights criticism of North Wales Police for deciding to launch its own criminal investigation instead of calling in an outside constabulary.

Clwyd had consistently pressed the Chief Constable and the Minister of State at the Home Office to accept that it was inappropriate for North Wales Police to investigate profoundly serious allegations by young people directed, in part, against members of the force.

The report quotes a letter from the Private Secretary to the Home Office to Clwyd on May 17, 1993, that the Chief Constable of North Wales at the time had “resisted the suggestion … of HM Inspector of Constabulary that the appointment of an officer from outside the force would dispel any local disquiet about the objectivity of the investigation”.

The panel asks William Hague, the Welsh Secretary, to answer its misgivings by ordering an inquiry with powers to compel agencies to explain their actions.

North Wales Police told The Times: “Regrettably the Jillings report is seriously flawed through many errors of fact, innuendo, false perceptions and general misunderstandings of procedure. Both the Director of Public Prosecutions and the Police Complaints Authority have publicly expressed their satisfaction with the thoroughness, impartiality and professionalism of the North Wales Police investigation.

“Where police officers or ex-police officers featured in any allegation, however tenuously, files were referred to the Director of Public Prosecutions and in the case of serving police officers also to the Police Complaints Authority.”

The police said that seven people were convicted after their investigation, not four as the Jillings report states.