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Cleveland Police which was suing its former chief constable for £500,000 has settled out of court for less than 5% of the figure, it has emerged.

The force was trying to claw back salary and bonuses it believed Sean Price was wrongly paid across a number of years before he was sacked for gross misconduct in 2012.

The civil case was due to be heard next month but police and crime commissioner (PCC) Barry Coppinger said Mr Price’s offer of £23,000 had been accepted.

That was due to mounting legal costs during a time of budget pressures and having consideration for Mr Price’s ability to pay more.

In a document on the PCC’s website, Mr Coppinger said the case against Mr Price was based on the legal argument that the payments were originally made “by mistake of law”.

He accepted the £23,000 offer was a “modest proportion” of what had been hoped for, but it was made in good faith, with reference to his ability to pay.

Mr Price, a father of two, has allowed the force to see financial documents, the PCC said.

Mr Coppinger said: “I concluded that I faced a choice either to accept the sum which Mr Price had demonstrated he could afford or proceed to court, risking an estimated overall six-figure sum in court costs which was unlikely to be realistically recoverable.”

He said the force had already spent about £30,000 on external barristers’ fees – £7,000 more than Mr Price’s settlement.

He added that other PCCs and forces had considered similar civil claims before deciding not to proceed.

Mr Coppinger said the payments Mr Price received were investigated under the wide-ranging Operation Sacristy inquiry into alleged corruption, but did not result in criminal charges.

He said: “Although ending the claim will mean that the court will not have the opportunity to address the legal questions, taking all of the considerations in the round I have determined that it would be appropriate to conclude the matter on the basis of the payment of the sum offered.”

Mr Price said in a statement: “This was a difficult decision for me as I had a strong case that the payments were lawful and should not be repaid 10 years later.

“However, the case has cost me several thousand pounds already and the public a great deal more. The only people benefiting have been lawyers.

“I made the decision that the best course of action was to settle now to prevent the costs escalating further.

“Notwithstanding our differences, I would like to pass my best to all at Cleveland Police in dealing with the financial challenges facing the force in the future.”

Mr Price was the first chief constable in 35 years to be sacked. An inquiry found he lied about his role in the recruitment of the former police authority chairman’s daughter.

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