Defeat for council that sued boss for lying about illness

A former council chief executive had her mental health "cruelly broken" by her former employer which accused her of lying about her medical condition on her job application and pursued her through the courts, her husband said yesterday.

Cheltenham Borough Council said that Christine Laird, 52, "fraudulently or negligently" withheld details of her history of depressive illness when she applied to be managing director.

But at the High Court yesterday, after a legal battle which started in January and involved 39 days in court, Mr Justice Hamblen dismissed the action. He also rejected a counterclaim for damages by Mrs Laird.

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Her husband, Hugh, said in a statement: "Christine was truthful, reasonable and honest when she filled in the medical form that lay at the heart of this case. That has now been proved beyond a shadow of a doubt. But, above all, she was a good chief executive who helped to bring investment and jobs to Cheltenham. Christine's mental health has been cruelly broken. The personal cost of all this is not financial – the price was so nearly her life."

Mrs Laird, from Tewkesbury, Gloucestershire, took up the post in February 2002 and left in August 2005 on an ill-health pension after taking sick leave on full pay from June 2004. As a result, the council claimed it suffered losses of more than £1m.

Mrs Laird left after what the court judgment described as "an atmosphere of mutual distrust" developed between her and Andrew McKinlay, who was appointed as the new council leader in elections held three months into her tenure. In the three years that followed, Mrs Laird claimed she was harassed and bullied, and eventually had a breakdown.

But the council said her failure to disclose details of previous depressive issues – she had "three episodes of depression with associated anxiety" between 1997 and 2001 – meant she was guilty of "deceit". It said that had it known of these episodes, it would not have employed her. The case was monitored closely by mental health campaigners, who feared that a win for the council would set a precedent forcing anyone with a depressive illness to declare it when they applied for a job. At the centre of the case was a medical questionnaire. To the question "Do you normally enjoy good health?" she replied "Yes"; and to "Do you have a mental impairment?" she replied "No".

The court was told that Mrs Laird saw her episodes between 1997 and 2001 as "stress-related illness and not depression". She also said she believed the stress and illness had ceased and was taking antidepressants as part of a "weaning-off" process.

The judge said the representations she had made were neither false nor misleading "given the terms of the questions", and that, according to both the Mental Health Act and the Disability Discrimination Act, she did not have an impairment. But he also rejected claims by Mrs Laird, who said the appointment was "unconditional" in that there was no mention of a medical report being required. He also rejected her counterclaim that the council was in breach of its duty towards her by failing to protect her against harassment.

The judge ordered the council to pay 65 per cent of Mrs Laird's estimated £540,000 legal costs, leaving her with a bill of around £190,000. He said he was not awarding her full costs because she had "thrown the kitchen sink" at the authority and made allegations against individuals that had been rejected.

Mrs Laird, who said she would be left bankrupt if she was not awarded costs, had to be led from court, apparently having had a panic attack. The council's own legal costs came to £400,000 – leaving taxpayers in Cheltenham with a bill of about £750,000.

The judge said: "It is over eight years since Mrs Laird joined the council, and much of the intervening period has been spent in bitter dispute before various tribunals, at much personal and financial cost. I very much hope that a line can now finally be drawn, allowing Mrs Laird to get on with her life and the council to get on with the business of governing Cheltenham."

Cheltenham Borough Council's current chief executive, Andrew North, said: "Clearly we are disappointed with today's judgment. While the outcome is not what we had hoped for, we felt we had a duty to take action to recover losses for what we felt was a disastrous time for the council."