HomeMy WebLinkAboutBy-law 8282-26 - Indeminification By-lawThe Corporation of the City of Pickering
By-law No. 8282/26
Being a by-law to provide for coverage, including indemnification, reimbursement and legal defence, for eligible members of Council and employees in respect of certain proceedings arising from the performance of their duties.
Whereas subsection 279(1) of the Municipal Act, 2001, S.O. 2001, c. 25 provides that a
municipality may, subject to certain limitations, act as an insurer and protect present and
former members of council, board members, employees and officers from risks that may
involve pecuniary loss or liability on the part of those individuals;
And whereas section 14 of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50
(“MCIA”) provides that a municipality may indemnify members of a municipal council for
costs or expenses incurred to defend a proceeding brought under the MCIA provided that a
member of Council is found not to have contravened the MCIA;
And whereas Council considers it desirable to establish a fair and controlled process for
considering requests for coverage where employees are exposed to adverse conduct
directly related to the performance of their City duties;
Now therefore, the Council of The Corporation of the City of Pickering hereby enacts as
follows:
1.Short Title
1.1 This by-law may be cited as the “Indemnification By-law”.
2.Interpretation
2.1 In this by-law,
“Application” means a written request for Coverage;
“Approver” means the person or body responsible under this by-law for
approving, refusing, continuing, limiting, varying or terminating Coverage;
“Adverse Conduct” means conduct that causes, or is reasonably likely to cause,a material adverse effect on an Employee and that is directly related to theEmployee’s status or actions as an Employee;
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“Chief Administrative Officer” means the Chief Administrative Officer of The
Corporation of the City of Pickering, or their designate;
“Coverage Agreement” means an agreement entered into as a condition of receiving or continuing Coverage;
“City” means The Corporation of the City of Pickering;
“City Clerk” means the City Clerk of The Corporation of the City of Pickering, or
their designate;
“City Solicitor” means the City Solicitor of The Corporation of the City of Pickering, or their designate;
“Council” means the Council of The Corporation of the City of Pickering;
“Coverage” includes indemnification, reimbursement, funding, advancement of
costs, and any other assistance provided under this by-law;
“Covered Person” means an Eligible Person whose Application for Coverage has been approved under this by-law;
“Eligible Person” means an Employee or Member;
“Employee” means an employee hired by the City on permanent basis who has
completed their probationary period and includes an individual who was an Employee at the time that the cause of action or proceeding arose, but who, before the judgment or other settlement of the proceeding, has ceased to be an Employee;
“Integrity Commissioner” means any person or corporation appointed by The
Corporation of the City of Pickering to perform the function assigned by section 223.3 of the Municipal Act, 2001, S.O. 2001, c. 25 as amended;
“Legal Steps” means steps taken to prevent, respond to, resolve, commence, continue, defend or settle a Proceeding or proposed Proceeding, including legal advice, correspondence, negotiation, mediation and other dispute resolution
steps;
“Mayor” means the head of Council and includes a Member acting as head of Council;
“Member” means a member of Council and an individual who was a Member at the time that the cause of action or proceeding arose, but who, before the
judgment or other settlement of the proceeding, has ceased to be a Member; and
“Proceeding” means any judicial, administrative, arbitral or regulatory claim, complaint, investigation or proceeding, and includes a proposed proceeding.
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2.2 For the purposes of this by-law, the Approver is:
(a) the Integrity Commissioner for a Member;
(b) the Chief Administrative Officer for an Employee;
(c) the Mayor for the Chief Administrative Officer; and
(d) Council, where this by-law provides that Council acts in place of the Mayor or another Approver.
2.3 If the City Solicitor seeks or has received Coverage under this by-law, any references to “City Solicitor” after and including section 7 of this by-law shall be replaced with “Chief Administrative Officer, in consultation with external legal counsel”.
2.4 If the Mayor has delegated their powers with respect to the Chief Administrative
Officer pursuant to s. 284.13 of the Municipal Act, 2001, S.O. 2001, c. 25, any references to “Mayor” within this by-law shall be replaced with “Council”.
2.5 If an Approver is unable to act because of a conflict of interest, reasonable apprehension of bias or other inability, Council shall act as Approver unless this by-law provides another replacement Approver.
3. Coverage – General
3.1 Subject to this by-law, the City may provide Coverage to an Eligible Person in respect of a Proceeding commenced after the passing of this by-law that arises out of alleged acts or omissions while acting in their capacity as an Employee or Member, if the Eligible Person was acting in the performance of their duties and
acted honestly and in good faith, including acting in the performance of any statutory duty imposed by any general or special Act of the Legislature.
4. Coverage – Adverse Conduct
4.1 An Employee who reasonably believes that another person has engaged in Adverse Conduct may apply for Coverage for reasonable Legal Steps to
address that conduct. Those steps may include the commencement or continuation of a Proceeding, if the Approver is satisfied the proposed Legal Step or Legal Steps are reasonable, proportionate and in the public interest.
4.2 For the purposes of section 4.1, the Approver shall determine whether Legal Steps are in the public interest, having regard to whether the proposed Legal
Step or Legal Steps are reasonable and proportionate and to any relevant factor, including one or more of the following:
(a) the need to address an adverse effect on the Employee’s employment, office or appointment, including future employment, office or appointment;
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(b) the need to restore or preserve the integrity of the City;
(c) the likelihood that the proposed response will achieve the objectives set out in paragraphs (a) and (b);
(d) the need to deter Adverse Conduct against Employees;
(e) whether the conduct also gives rise to a complaint, request for inquiry or investigation under the Council Code of Conduct, and whether Coverage
should be deferred pending that process having regard to urgency, prejudice to the Employee or another public-interest reason; and
(f) any other factor relevant to the public interest.
4.3 For the purposes of section 4.1, a Legal Step or a Proceeding is not in the public interest if, in the Approver’s opinion, the Legal Step or Proceeding is frivolous,
vexatious, in bad faith, or otherwise constitutes an abuse of process.
5. Exclusions
5.1 Despite any other provision of this by-law, the City shall not provide Coverage in respect of Legal Steps or a Proceeding:
(a) under the Criminal Code (Canada) or any other Act of Parliament in
respect of an alleged offence for which imprisonment may be imposed;
(b) under the Highway Traffic Act;
(c) under the Municipal Elections Act, 1996;
(d) in respect of an alleged contravention of a municipal parking by-law or traffic by-law;
(e) relating to a grievance under a collective agreement, or to discipline, termination or other action taken by the City with respect to an Employee;
(f) under the Council Code of Conduct, if the Member has been found by the Integrity Commissioner to have contravened the Council Code of Conduct;
(g) under the Employee Code of Conduct, if the Employee has been found by the Chief Administrative Officer to have contravened the Employee Code of Conduct;
(h) where the Employee has been terminated because of the acts or omissions that gave rise to the Legal Steps or Proceeding;
(i) prosecuted by or on behalf of the City against an Eligible Person, or in which the City is the complainant, claimant or plaintiff;
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(j) a third-party claim or crossclaim brought against an Eligible Person for
relief over against the Eligible Person in a Proceeding commenced by the City;
(k) which Council deems to constitute a wanton or malicious, or fraudulent wrongful conduct;
(l) arising from acts or omissions of an Eligible Person who was acting in
bad faith, with malice, for an improper purpose or on their own behalf and not in their capacity as an Employee or Member; or
(m) commenced by a Member.
6. Process
6.1 Where an Eligible Person becomes aware of circumstances that may give rise to
Legal Steps or a Proceeding, in respect of which the Eligible Person may seek Coverage and regardless of whether the Covered Person is a named party, the Eligible Person shall forthwith give confidential written notice as follows:
(a) a Member, including the Mayor, shall give notice to the Integrity Commissioner through the City Clerk;
(b) an Employee shall give notice to the Chief Administrative Officer; and
(c) the Chief Administrative Officer shall give notice to the Mayor, unless the Mayor is unable to act because of a conflict of interest or other inability, in which case Council shall act in the Mayor’s place.
6.2 An Eligible Person who seeks Coverage shall submit an Application for
Coverage, together with any notice of claim, application, complaint, pleading or other documents relating to the Legal Steps or Proceeding, as follows:
(a) a Member, including the Mayor, shall apply to the Integrity Commissioner through the City Clerk;
(b) an Employee shall apply to the Chief Administrative Officer; and
(c) the Chief Administrative Officer shall apply to the Mayor, unless the Mayor is unable to act because of a conflict of interest or other inability, in which case the Chief Administrative Officer shall apply to Council.
6.3 The Approver shall, in their sole discretion and having regard to any applicable factors under this by-law, decide whether to approve the Application.
6.4 Before the Approver makes a decision under section 6.3, the City Solicitor shall provide the Approver with a written legal opinion and the Approver shall have regard to that opinion. If the City Solicitor is seeking Coverage, the Chief
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Administrative Officer shall retain external legal counsel to provide the written
legal opinion to the Approver.
6.5 The Approver shall give the Eligible Person a written decision within 20 business days after receiving the Application. The decision is final, subject to section 6.6.
6.6 Despite section 6.5, if an Application is not approved, the Eligible Person may submit a new Application under section 6.2 if new material facts become
available.
6.7 An Eligible Person becomes a Covered Person only when the Application has been approved under this by-law.
7. Manner and Extent of Coverage
7.1 Where Coverage has been approved under this by-law, the City may, subject to
the terms of the approval:
(a) retain legal counsel to represent the Covered Person, or reimburse or advance reasonable legal fees incurred by the Covered Person;
(b) approve the settlement of any Proceeding;
(c) pay, reimburse or advance reasonable costs, damages, amounts payable
under a settlement and other amounts approved as Coverage; and
(d) pay costs incurred in connection with the settlement of a Proceeding, if the City Solicitor approves the terms of the settlement.
7.2 The Approver may approve Coverage subject to terms and conditions, including setting a maximum amount of Coverage as informed by a written legal opinion
provided by the City Solicitor or, in the case of an Application by the City Solicitor, the legal opinion provided by external legal counsel.
7.3 The City may require a Covered Person to enter into a Coverage Agreement. The Coverage Agreement may address repayment, assignment of recoveries, co-operation, reporting, approval of legal counsel, budgets, invoices, settlement
authority and any other term reasonably required to administer Coverage under this by-law.
7.4 The City Solicitor may recommend, and the Approver may approve, a limit on the amount of Coverage provided to a Covered Person in respect of one or more Proceedings or Legal Steps.
8. Approval of Legal Counsel
8.1 The City may select and retain legal counsel to represent a Covered Person in respect of Legal Steps or a Proceeding.
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8.2 A Covered Person may apply for approval of their choice of legal counsel by
submitting the name and address of the legal counsel to the Approver. If, within ten days from the receipt of the request or, where the Approver is Council, following the next Council meeting, the Approver has not approved or rejected the Covered Person’s choice and selected or retained other legal counsel and advised the Covered Person thereof, the Covered Person may retain their own
legal counsel.
8.3 The City shall not be required to pay for the services of the Covered Person’s legal counsel at a rate greater than the rates the City pays for legal counsel on insurable claims. If the Covered Person’s legal counsel charges a higher rate or fee, the Covered Person shall be responsible for the difference.
8.4 If the City selects, retains or appoints other legal counsel to act on the Covered Person’s behalf in place of the legal counsel originally retained by the Covered Person in accordance with section 8.2, the City shall pay all the lawyer’s reasonable legal fees and disbursements in connection with services rendered and work done in connection with the matter from the time that the lawyer was
retained in accordance with section 8.2, until replaced by other legal counsel.
8.5 Despite sections 8.2 and 8.3, any legal counsel selected by the City’s insurers from time to time, to defend the City in respect of the Proceeding, will be deemed to be selected, retained and approved by the City under sections 8.2 and 8.3, to represent the Covered Person with respect to that Proceeding, until
the City advises the Covered Person otherwise.
8.6 The City Solicitor, acting reasonably, may require any of the following:
(a) budgets for anticipated legal costs, which may be revised from time to time as circumstances require;
(b) status updates in respect of the progress of the Legal Steps or
Proceeding;
(c) invoices with sufficient detail to assess reasonableness;
(d) an assessment or taxation of all fees and disbursements before payment thereof; and
(e) work plans and other documents reasonably required to administer
Coverage.
8.7 A Covered Person or their legal counsel may redact privileged or litigation-sensitive information from documents provided under section 8.3 if the redaction does not prevent the City from assessing the reasonableness of the Coverage requested or provided.
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9. Coverage – Reviews, Judicial Reviews and Appeals
9.1 A Covered Person who seeks Coverage for the review, judicial review or appeal of a judgment or decision in a Proceeding shall first consult with the Approver before commencing the review, judicial review or appeal.
9.2 The Approver shall have sole discretion to determine whether Coverage will be provided for the review, judicial review or appeal.
9.3 In exercising that discretion, the Approver may consider any relevant factor, including:
(a) the likelihood that the review, judicial review or appeal will succeed;
(b) the significance of the legal issues raised by the review, judicial review or appeal;
(c) the financial consequences of the judgment or decision;
(d) the public interest;
(e) the cost of the review, judicial review or appeal relative to the anticipated benefit; and
(f) any written legal opinion provided by the City Solicitor or external legal
counsel.
9.4 The Approver shall provide written reasons for any decision made under this section. The decision shall be final and shall not be subject to further review or appeal.
9.5 If Coverage for a review, judicial review or appeal is not approved and the
Covered Person elects to proceed with the review, judicial review or appeal, all costs of the review, judicial review or appeal, including any award of costs, shall be at the Covered Person’s own expense.
10. Duty to Co-operate
10.1 A Covered Person shall co-operate fully with the City in the management of any
Legal Steps or Proceeding.
10.2 A Covered Person shall co-operate fully with any legal counsel retained by the City in respect of Legal Steps or a Proceeding and shall make available to that counsel all information and documents relevant to the matter that are within the Covered Person’s knowledge, possession or control, and shall attend all
meetings, examinations, hearings, proceedings or other steps when requested to do so by that counsel.
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11.Failure to Comply
11.1 If a Covered Person fails or refuses to comply with the provisions of this by-law,or the terms of a Coverage Agreement, the Approver may terminate Coverage.Before making a decision on whether to terminate Coverage, the CoveredPerson shall be provided with the opportunity to make submissions to theApprover in support of their continued Coverage. The Approver’s decision is
final and shall not be subject to further review or appeal.
12. Reimbursement
12.1 The amount of Coverage payable to a Covered Person shall be reduced by theamount of any costs or other amounts recovered by the Covered Person inrespect of the Legal Steps or Proceeding. If Coverage has been paid, any costs
or other amounts recovered by the Covered Person in respect of the LegalSteps or Proceeding shall be paid to the City up to the amount of Coverage paidby the City.
13.Severability
13.1 If any section or part of a section of this by-law is found by any court to be illegal
or beyond the power of Council to enact, that section or part shall be deemed tobe severable and all other sections and parts of sections of this by-law shall bedeemed to be separate and independent and shall continue in full force andeffect.
14.Effective Date
14.1 This by-law shall come into full force and effect upon the final passing thereof.
15.Transition
15.1 By-law No. 5038/97 is hereby repealed.
By-law passed this 23rd day of July, 2026.
Original Signed By________________________________
Kevin Ashe, Mayor
Original Signed By________________________________
Rumali Perera, Deputy Clerk