3888 To provide the Indemnification of Current and Former Council Members, Local Board Members and Employees of the Town of TillsonburgTHE CORPORATION OF THE
BY-LAW NUMBER 3888
A By-law to Provide for the Indemnification of Current and Former Council
Members, Local Board Members and Employees of the Town ofTillsonburg.
WHEREAS Section 279 of the Municipal Act, 2001 S.O. 2001, c. 25 as amended
provides that, despite the Insurance Act, a municipality may be or act as an insurer
and may exchange with other municipalities in Ontario, reciprocal contracts of
indemnity or inter-insurance in accordance with Part XIII of the Insurance Act with
respect to the following matters:
1. Protection against risks that may involve pecuniary loss or liability on the
part of the municipality or any local board of the municipality.
2. The protection of its employees or former employees or those of any local
board of the municipality against risks that may involve pecuniary loss or
liability on the part of those employees.
3. Subject to Section 14 of the Municipal Conflict of Interest Act, the protection
of the members or former members of council or of any local board of the
municipality or any class of those members against risks that may involve
pecuniary loss or liability on the part of the members.
4. Subject to Section 14 of the Municipal Conflict of Interest Act, the payment
of any damages or costs awarded against any of its employees, members,
former employees or former members or expenses incurred by them as a
result of any action or other proceeding arising out of acts or omissions done
or made by them in their capacity as employees or members, including while
acting in the performance of any statutory duty.
5. Subject to Section 14 of the Municipal Conflict of Interest Act, the payment
of any sum required in connection with the settlement of an action or other
proceeding referred to in Paragraph 4 and for assuming the cost of defending
the employees or members in the action or proceeding.
AND WHEREAS exposure to liability under Acts dealing with areas such as
environmental impairment or fisheries protection have prompted some municipalities
to enact indemnification by-laws to address any gaps in their insurance coverage;
AND WHEREAS Provincial downloading has brought new areas of exposure
including the imposition of harsh penalties on elected representatives and senior
managers for the actions of front-line staff, which has increased the risks still further;
AND WHEREAS Council would like to address the indemnification needs of
Council members, local board appointees and employees in a comprehensive
manner;
AND WHEREAS Council wishes to put in place appropriate protections against
personal liability to ensure that competent staff, competent volunteers and competent
Council members continue to be attracted to serve the Town ofTillsonburg;
NOW THEREFORE the Council of The Corporation of the Town of Tillsonburg
enacts as follows:
The Town of Tillsonburg Indemnification By-law shall apply to all current arid
former members of Council, current and former members of Local boards and
cormnittees, and all current and former employees, subject to the limitations outlined
in this By-law.
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2. Definitions
For the purposes of this By-law:
"Action or proceeding" means an action or proceeding with any process issued out of
or authorized by any court, administrative tribunal or other administrative,
investigative or quasi-judicial body.
"Council" means the Council of The Corporation of the Town ofTillsonburg.
"Employee" means any salaried officer, or any other person in the employ of the
Town or of a local board or committee and includes persons that provide their
services on behalf of the Town without remuneration, exclusive of reimbursement of
expenses provided that such persons are appointees of the Town or volunteers acting
under the direction of a person in the employ of the Township.
"Former employee" means a person who was formerly an employee of the Town or
local board.
"Former member" means a person who was formerly a member of a Council of the
Town or local board.
"Individual" means a person who was a member of Council or was an employee, as
the case may be, at the time the cause of action or proceeding arise or at the time that
the act or omission occurred that gave rise to the action or proceeding,
notwithstanding that prior to judgment or other settlement of the proceeding, the
person may have become a former member or former employee.
"local board" means a municipal service board, police services board, planning
board, or any other board, commission, committee, body or local authority
established or exercising any power or authority under any general or special Act
with respect to any of the affairs or purposes, including but not limited to members
of any advisory committee including, but not limited to the following, the
Accessibility Advisory Committee, Cultural Advisory Committee, Development
Committee, Heritage, Beautification & Cemeteries Committee, Museum Advisory
Committee, Parks & Recreation Committee, and any subcommittee appointed by any
committee of Council and excluding a school board.
"Town" means The Corporation of the Town ofTillsonburg.
3. Excluded Actions and Proceedings
a) This By-law does not apply to:
i) an action or proceeding where the legal proceeding relates to a grievance
filed under the provisions of a collective agreement or to disciplinary action
taken by the Town as an employer;
ii) an action or proceeding brought under the Highway Traffic Act, RS.O. 1990,
c. H.8 as amended and the Criminal Code, R.S. 1985, c. C-46 as amended
unless such proceedings arose as a result of the individual's good faith
pursuit or performance of the individual's assigned duties;
iii) any expenses incurred by members of Council or a local board in obtaining
legal advice to determine whether the member has a pecuniary interest in a
matter which is the subject of a determination or consideration by Council or
local board as defined herein; or
iv) an action or proceeding commenced by the Town.
The determination as to whether or not an action or proceeding is covered by this
By-law shall be exercised by the Town in its sole discretion.
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4. Indemnification
a) Good Faith -lawful conduct
The Town shall indemnify an individual in the manner and to the extent provided by
Section 4 c) in respect of any civil, criminal or administrative action or proceeding,
including appeals, brought by a third party for acts or omissions arising out of the
scope of the individual's authority or within the course of the individual's
employment or office if:
i) the individual acted honestly and in good faith with a view to the best
interests of the Town; and
ii) in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, the individual had reasonable grounds for
believing that his or her conduct was lawful.
b) Town Appointed Solicitor-to determine
In the event that any determination is required as to whether an individual meets the
requirements of this Section, the Town's appointed Solicitor shall determine if there
are any terms and conditions that may apply to the indemnification of an individual.
c) Manner and extent of indemnification
The Town shall indemnify an individual who meets the requirements of Section 4 a)
and b) by:
i) assuming the cost of defending such individual in an action or proceeding;
ii) paying any damages or costs, including a monetary penalty, awarded against
such individual as a result of an action or proceeding;
iii) paying, either by direct payment or by reimbursement, any expenses
reasonably incurred by such individual as a result of an action or proceeding;
and
iv) paying any sum required in connection with the settlement of an action or
proceeding;
to the extent that such costs, damages, expenses or sums are not assumed, paid or
reimbursed whether under any provision of the Town's insurance program or
otherwise for the benefit and protection of such individual against any liability
incurred by such individual.
5. Action -Proceedings
a) Persons served with process
Where an individual is served with any process issued out of or authorized by any
court, administrative tribunal or other administrative, investigative or quasi-judicial
body, other than a subpoena, in connection with any action or proceeding the
individual shall forthwith deliver the process or a copy to the Chief Administrative
Officer and/or Town Clerk, who in tum shall deliver a copy to the Town's Insurance
Broker and the Town's appointed Solicitor.
b) Lawyers retained by the Town's insurers
Notwithstanding any other provision of this By-law to the contrary, any lawyer
retained by the Town's insurers from time to time to defend the Town in any action
or proceeding shall represent an individual with respect to that action or proceeding
unless the Town instructs such individual otherwise.
13404588.3
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c) Town's right to select lawyer
Subject to Section 9 and to paragraph c) ii) of tbis section, the Town shall have the
right to select and retain the lawyer to represent an individual and the CAO shall:
i) advise such individual of the lawyer selected to represent the employee; and
ii) advise the Council of the final disposition of the matter.
6. Conduct of Defence
Where possible, the Town's Solicitor shall conduct the defence of such actions or
proceedings. In exceptional circumstances the use of the Town's appointed Solicitor
may not be possible and subject to Section 5 b) and Section 10 outside legal counsel
may be retained having regard to:
i) whether the Town's appointed Solicitor has the required expertise;
ii) whether the Town's appointed Solicitor can provide the commitment of time
and resources that is required; or
iii) whether the Town's appointed Solicitor is or may be in a conflict of interest
situation by virtue of conducting the defence of the individual.
7. Settlement-Council Approval
Council shall have the right to approve the settlement of any action or proceeding.
8. Request for Approval of other Lawyer
Subject to the provisions of tbis section, an individual may request approval to be
represented by the lawyer of the individual's choice by writing to the CAO.
9. CAO or Designate-Review Request-10 Days
The CAO or Designate shall witbin 10 days from receiving the request, either
approve the request or deny the request and nominate a lawyer of the Town's choice
and, in either case, advise the individual in writing of such decision. The authority to
make tbis decision shall be in the sole authority of the CAO or Designate. In the
event that the CAO or Designate does not advise the individual in writing of his or
her decision within ten (1 0) day from receiving the request, the request shall be
deemed to be refused.
10. Duty to Cooperate
An individual involved in any action or proceeding shall cooperate fully with the
Town and any lawyer retained by the Town to defend such action or proceeding,
shall make available to such lawyer all information and documentation relevant to
the matter as are within his or her knowledge, possession or control, and shall attend
at all proceedings when requested to do so by such lawyer.
11. Failure to Comply -Conflict
a) Failure to Comply with By-law
If an individual fails or refuses to comply with the provisions of this By-law, the
Town shall not be liable to assume or pay any of the costs, damages, expenses or
sums arising form the action or proceeding and shall not be subject to the
requirements of Section 4 c) of this By-law.
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13404588.3
b) Conflict-Insurance Policies
The Town maintains many different policies of insurance for both the Town and
members of Council, officers and employees. The provisions of this By-law are
intended to supplement the protection provided by such policies of insurance. In the
event of conflict between this By-law and the terms of such policy of insurance in
place from time to time of such policy or policies of insurance shall prevail.
12. Appeal-Enactment
a) Appeals
Where an individual seeks to appeal a judgment in a covered action or proceeding,
the Town shall have the sole discretion to determine whether an appeal should be
pursued, and whether the cost of the appeal will be covered by this By-law. If an
individual pursues an appeal without representation by the Town and is successful in
that appeal, the Town shall have the sole discretion to determine whether the
individual shall be indemnified for his or her legal fees.
13. Effective Date
That this By-law shall come into full force and effect upon passing.
READ A FIRST AND SECOND TIME this 23rd day of March, 2015.
READ A THIRD TIME AND FINALLY PASSED this 23rd day of March, 2015.
~ -Town Clerk, Donna Wilson
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