It is a principle of the common law of England and Wales that a public authority cannot bring an action for defamation. And this is right and proper, as being able to sue for libel (and thereby threaten to sue for libel) would have an unwelcome "chilling" effect on public criticism of governmental bodies. Individual councillors and officers can sue for defamation, but not the authorities themselves.
However, this sensible legal safeguard appears to be under threat. The City lawyers  advising Rutland County Council  are saying that the recently enacted Localism Act  has changed the legal position, and now it is open to public bodies to freely sue - and threaten to sue - for libel.
Section 1 of the Localism Act provides for a "general power of competence". In particular, the Act says that a "local authority has power to do anything that individuals generally may do".
It is not clear what this actually means, and the use of the imprecise word "generally" makes the scope of the provision inherently uncertain. But what the external lawyers to Rutland County Council have taken it to mean is that a council can sue for defamation when it could not do so before. And, interestingly, it is three of Rutland Council's own councillors which the council is considering whether to sue.
The advice of the lawyers is set out in full here  (pdf). The possibility of an action in defamation is set out at paragraph 11:
Some 20 years ago the Court of Appeal held that a local authority is not entitled to issue a defamation claim in its own name in connection with statements that damage the reputation of the authority as a whole (rather than the reputation of its individual officers or members)4 and this has been the accepted law. However, in our view, this principle has been overturned by the general power of competence granted to local authorities by section 1 of the Localism Act 2011 (“the 2011 Act”). This provision was brought into force on 18 February 2012 and gives a local authority the power to do anything which an individual generally may do. An individual has the power to issue a defamation claim in its own name, and the 2011 Act contains no restriction which would prevent an authority from doing so. Given the extent to which a local authority is now dependent on its public reputation for its ability to secure external funding, to attract competitive tenders for provision of services, or to recruit outstanding officers, it seems quite appropriate that the 2011 Act should now have brought the law up to date with the commercial reality.
However, this advice is not only illiberal, it seems misconceived.
First, it was not the Court of Appeal which made the ruling which is referred to, it was in fact the House of Lords. The case was Derbyshire County Council v Times Newspapers  and it was a unanimous decision of five Law Lords - including Lord Goff and Lord Browne-Wilkinson, two of the greatest common law judges of the post-war era.
The Law Lords held that, as a matter of public policy, Derbyshire County Council was not able to sue for defamation. There would be, the Law Lords explained, an adverse effect on freedom of expression if a public body could sue in respect of unwanted criticism. The point could not have been made more clear: "a local authority does not have the right to maintain an action of damages for defamation".
So does section 1 of the Localism Act now "overturn" this unequivocal statement of a very strong House of Lords? Are the external lawyers of Rutland Council right?
With the proviso that law is ultimately what the courts say it is, and so any view on what is an untested point of law is a matter of opinion, it would appear that Rutland Council's lawyers have got this important point badly wrong.
The Law Lords in Derbyshire did not decide the case on what lawyers would call the "vires" (or powers) of a public body. It was instead decided on an altogether different basis: that it should be public policy that councils cannot sue. The Lordships did not doubt that corporations could, in principle, sue for libel; it was just that a certain class of corporations were not able to do so because it would not be in the public interest. The 1972 case which said otherwise - Bognor Regis Urban District Council v Campion - was expressly stated to have been wrongly decided. In effect, their Lordships said "Bugger Bognor " and in a comprehensive review of domestic and foreign case law held that freedom of expression was always more important.
Accordingly, the Localism Act is irrelevant to the Derbyshire decision. It deals with a different legal issue. Section 1 does not create a right of action in tort which the House of Lords said no longer existed. Neither does it refer to public policy. In fact, it has nothing to do with whether a council can sue for libel, and it is worrying that a public authority is being advised that such a course of action is available to it.
Rutland Council is clearly divided. A small group of councillors - "the Rutland Anti-Corruption Party " - is noisily calling for transparency and openness in the council's dealings. Their latest statement accuses the council of significant wrongdoing. This in turn is denied by the council, who make counter accusations . At a distance, it is difficult to form a view on the merits of any of the accusations - and Rutland matters should, of course, be determined by Rutland people.
But what makes the matter of wider concern is the council's resort to legal advice on how to sue or otherwise legally threaten its very own councillors. For if Rutland Council can sue its critics for libel, then it would follow that any council would be able to also do so, and it would be a brave citizen that would want to be a test case in any action for libel. The 'chilling effect' will be enough to deter certain criticism.
Rutland Council meets this evening  to discuss the legal advice it has received. Anyone with an interest in free expression and libel reform should follow what now happens. For if the majority of councillors vote for the council to sue for libel, then other councils will undoubtedly be tempted to follow the lead of Rutland, and it could be as if the Bognor case had never been buggered by their Lordships at all.
David Allen Green is legal correspondent of the New Statesman