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School Council — Liability and Legal Proceedings

Policy

This policy assists principals to understand the extent of legal liability for school councils and school council members and sets out the processes for seeking assistance with legal claims.

Summary

  • As a body corporate, school councils are separate legal entities that can sue or be sued in their own name.
  • The Department must indemnify individual members of school councils for any legal liability, other than criminal charges brought by police, if they acted in good faith and in the exercise of their powers or functions. The indemnity may be funded from Department central funding or school budgets or locally raised funds, but is usually funded from Department central funding.
  • The Department may also (and often does) decide to indemnify school councils (as a body corporate separate to the school council members) for claims of common law negligence and employment disputes (including for claims of discrimination).
  • A school council (as a corporate entity) will not usually be indemnified for other types of school council liability, such as GST and taxation, or functions that are not directly related to the administration of a school.
  • If indemnified, school councils will remain responsible for funding an indemnity for their school councils from school budgets or locally raised funds. However, the Department may decide to centrally fund that indemnity in some circumstances.
  • The principal, as executive officer of the school council, must contact the Department's Legal Division for support and advice with respect to any legal support in a claim for an indemnity by the school council or a school council member, or whenever responding to a legal claim, dispute, summons or subpoena to a school council member. 
  • School councils should not commence legal proceedings without appropriate consent from the Department (the Executive Director or Legal Division) or, where required, the Minister. If school councils are unsure how to proceed in a legal matter, the principal, as executive officer of the school council may contact the Legal Division at legal.services@education.vic.gov.au or 03 9637 3146.

Details

School councils are separate legal entities, established as body corporates under a Ministerial Order. As such, a school council is able to sue or be sued including for payment of money under:

  • service agreements for the day-to-day operations of the school
  • any agreement that seeks to resolve actual or threatened litigation (that is, settlement agreement)
  • court orders against school councils (including judgments for damages or compensation or any other legally enforceable remedy including infringement notices and fines)
  • contracts of employment, and statutory obligations to employees as an employer.

Individual members and former members of a school council are not expected to be found to be personally liable for the debts and liabilities of a school council where they have acted in good faith and in the exercise of their powers or functions.

Indemnities for legal liability

School Councils

The Department may decide to indemnify school councils (this is different to school council members) in claims of common law negligence, and in relation to employment disputes (including discrimination claims), for the costs of defending the claim (that is any settlement sum required to be paid and legal representation) where the school council was acting:

  • in the exercise of their powers or functions
  • in good faith according to their role and duties under applicable legislation, policies, guidelines and directions.

The Department will not usually indemnify school councils or provide legal representation for school council liability where school councils were, or should have reasonably been, able to adopt appropriate measures of oversight and where the claim would not ordinarily be expected to give rise to personal liability for a school council member. For example, school council’s will not usually be indemnified by the Department for legal matters involving:

  • GST and taxation
  • breach of contract
  • breach of copyright law, patents, trademarks, or designs
  • land use objections.

The Department will not usually indemnify a school council or provide legal representation in relation to the exercise of school council functions that are not directly related to the administration of a school, particularly where they are conducted in a manner that raises funds that can be used to pay for insurance, for example, for the provision of outside school hours care.

These matters are generally considered to be within the school council’s management or control, and even if indemnified, school councils will usually be expected to meet any liability for these matters from their school budgets or locally raised funds or insurance. These are matters for which a school council member is unlikely to be liable.

If the Department has decided a school council should be indemnified for settlement or legal costs, it may decide to centrally fund the costs of defending the claim after considering:

  • the expected impact on the school’s operations and educational programs
  • whether the school council has insufficient funds to pay for legal representation or any settlement sum required to be paid in relation to the claim, including whether there is any applicable insurance cover for the school council.

If a school council is unable to meet its liability in these matters, or if a school wishes to request indemnification, the principal, as executive officer on behalf of the school council, must contact the contact the Legal Division at legal.services@education.vic.gov.au or 03 9637 3146

School Council Members

The Department (which includes schools) will indemnify a person who is or has been a member of a school council against any liability for any loss or damage suffered by the council member or any other person, whether in negligence, defamation, contract or otherwise. The indemnity is for anything necessarily or reasonably done or omitted to be done where the member acted in good faith in the:

  • exercise of a power or performance of a member’s function, or
  • reasonable belief that the member’s liability act or omission was in the exercise of the member’s function or power.

The Department will not usually indemnify school council members or provide legal representation about matters where criminal charges are brought by police on the basis that, in those circumstances, it is expected that there will be a reasonable basis to form the preliminary view, on the balance of probabilities, that the school council member would not have been acting in good faith in the exercise of a school council power or function, or the reasonable belief that they were exercising a school council power or function, and that an indemnity should not be provided.

When the Department is providing an indemnity to a school council member (for the cost of settlement and legal representation), the funding of that indemnity may come from the Department, school or insurer. However, the funding will usually come from the Department central funds. In determining whether any liability arising from indemnifying a school council member should be funded from Department funding or the school’s budget or locally raised funds, the Department will take into account:

  • the expected impact on the school’s operations and educational programs
  • whether the school council has insufficient funds to pay for legal representation or any settlement sum required to be paid in relation to the claim, including whether there is any applicable insurance cover for the school council member.

School Council Employees

A school council is responsible for all of its employees.

The Department will usually indemnify individual school council employees in claims of common law negligence. The Department may indemnify individual school council employees for other legal claims in similar circumstances to when their departmental counterpart is indemnified.

The Department is unlikely to indemnify a school council employee in exceptional circumstances, for example, when the school council employee was:

  • under the influence of illicit drugs or alcohol
  • engaging in an alleged criminal offence
  • engaging in outrageous behaviour that was not related to their employment.

Cooperation

Any school council, school council member or school council employee that is indemnified by the Department for legal liability is required to fully cooperate with the State, in accordance with reasonable legal advice and follow any reasonable directions throughout the legal proceedings to the extent that this does not prejudice their individual legal rights. Failure to cooperate may result in the indemnity being withdrawn.

Responding to legal claims

If a school council member receives:

  • a legal claim (such as a writ statement of claim or letter of demand from a law firm, court or tribunal order, claim for unfair dismissal, discrimination or breach of privacy)
  • a notice of breach or notice of dispute under contract
  • a witness summons or a subpoena.

the principal, as executive officer of the school council, should immediately notify the Department's Legal Division and forward the relevant documents to it requesting legal representation.

Note: School council members should not directly or indirectly incur legal costs before contacting the Legal Division.

Commencing Legal Proceedings

A school council should not commence legal proceedings or any action against any person in any court or tribunal without first obtaining written approval from the Executive Director, Legal Division.

A school council must not commence legal proceedings in any court or tribunal, or before any person acting judicially, such as a mediator or arbitrator, without the written consent of the Minister, against any of the following: 

  • the Crown
  • the State
  • any Minister
  • any officer or employee of the State in respect of duties performed in his or her official capacity, or any authority or public body within the meaning of the Financial Management Act 1994 (Vic).

School councils do not require consent of the Department or Minister to enforce judgments in their favour.

If school councils are unsure how to proceed in a legal matter, the principal, as executive officer of the school council, is able to contact the Legal Division or telephone for guidance.

Definitions

Indemnify
To indemnify another party is to compensate that party for loss or damage which has already occurred for which that party might otherwise be legally liable, or to guarantee through a contractual agreement to repay another party for loss or damage that occurs in the future.

Liability
Being legally responsible for something. To have a legal obligation to do (or to not do) something.​

Relevant legislation

Department policy explaining the extent of legal liability for school councils and school council members and setting out the process for seeking assistance from the Department with legal claims

Reviewed 12 July 2021

Policy last updated

15 June 2020

Scope

  • Schools
  • School councils
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