Public Bodies Escaping Liability

The past few years have seen a considerable growth in contractual arrangements between the public and private sectors in the Real Estate industry. In the current economic climate this trend will undoubtedly continue.

A recent High Court case is a useful illustration of the care that should be taken when entering into a contract with a public body.

Although company law goes some way to protect third parties dealing with companies where there are failures to observe constitutional restrictions the same cannot be said for those who contract with a public body such as a government body or local authority. Such bodies are normally created by statute and if they act outside their powers, it is said that they act ultra vires. The case allowed a local authority to defend itself from litigation by claiming that a...