Thursday, 23 July 2020

Could Starmer be at Risk of Bankrupting Labour?

It is believed up to 40 new claimants intend to pursue the Labour Party, following its decision to apologise in the high court and pay damages to seven "whistle blowers" and BBC journalist John Ware. 

The pay outs so far have totalled six figures and some, such as departing Unite leader Len McCluskey have suggested this was a misuse of party funds, on the basis lawyers reportedly said the Labour Party would likely win in court, if it had opted to defend the case. 

Jeremy Corbyn alleged the decision to settle was political, rather than legal, and is now facing possible legal action himself from John Ware. A fundraiser to pay Corbyn's legal costs has already raised over £80,000.

Campaign group Momentum issued the following statement on Twitter:

"Labour has made apologies over last year’s Panorama programme, despite reports that the legal advice received by Labour said the Party would have likely won in court because it had strong legal defences.

"Labour must be honest and transparent with its members by publishing this legal advice. Labour members deserve to know how much of their money has been spent in these settlements and whether or not these settlements were in line with the legal advice the Party received.

"Any apologies or concessions made while the inquiry into the leaked report, led by Martin Forde QC, is ongoing, could run the risk of undermining that inquiry. Members are still waiting for answers and justice over the contents of the leaked report.

"This includes allegations of racism, sexism, ableism and abuse towards Labour MPs and pro-Corbyn staff, and allegations about attempts to undermine Jeremy Corbyn’s leadership and work against a Labour victory in the 2017 General Election.

"The leaked report also made allegations about failures by the Labour Right in dealing with complaints of antisemitism and Islamophobia and argued that factionalism played a significant role in this.

"Many of these allegations countered the claims made in the Panorama programme and it is clear that, if a Panorama programme on the subject of antisemitism in the Labour Party were made today, it would be very different were it to reflect the contents of the leaked report."


The problem Labour now faces is that by accepting liability, it may have to pay substantial damages to the remaining 40 claimants and this could be somewhere in the region of millions of pounds. Labour is understood to be suffering a significant loss of revenue, due to members leaving the party in huge numbers since Starmer became leader. Some are speculating over 300,000 have left since December 2019 - roughly half the membership, although no official figures have been released.

Labour could opt to defend the court action, but given the content of the cases put forward is likely to be substantially similar to ones Labour has already settled, this would almost seem farcical. On the other hand, if Labour does pay out millions of pounds of members' fees and settles cases which may have been winnable, it could still face legal action from those who would oppose such a move. Indeed, some are already understood to be considering a legal challenge to the actions taken so far. The whole thing is a shambolic mess.

A shadow cabinet minister told the Telegraph: "This is the legacy Corbyn has left us. People should be angry." And people are angry, but judging by the overwhelming support Corbyn's fundraiser has received, it would appear they are not angry at the former Labour leader.

If Labour does settle again, it may have no money left in the coffers, and at this rate, no one willing to refill those coffers. Many members would have preferred to take the risk of  defending the cases in court. That way the truth could at least come out in public, and if the ruling was in favour of Labour, the party would not be facing a financial crisis.

Unless a solution is found, it looks like the internecine warfare of the last five years might finally destroy this once great party, and most tragically of all, many on the left would not be sad to see it go.

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