[HISTORY: Adopted by the Mayor and Council of the Borough of Chatham 11-10-2003 by Ord. No. 03-23. Amendments noted where applicable.]
GENERAL REFERENCES
Officers and employees — See Ch. 39.
Except as hereinafter provided, the Borough of Chatham, hereinafter known as the "Borough," shall, upon the request of any present or former official, employee or appointee of the Borough, provide for indemnification and legal defense of any civil action brought against said person or persons arising from an act or omission falling within the scope of their public and/or assigned duties.
The terms of this chapter and the definition of official, employee and appointee are to be construed liberally in order to effectuate the purposes of this chapter, except that these terms shall not mean:
A. 
Any person who is not a natural person;
B. 
Any person while providing goods or services of any kind under any contract with the Borough except an employment contract;
C. 
Any person while providing legal or engineering services for compensation unless said person is a full-time employee of the Borough; and
D. 
Any person who as a condition of his or her appointment or contract is required to indemnify and defend the Borough and/or secure insurance.
The Borough shall provide for defense of and indemnify any present or former official, employee or appointee of the Borough whenever any action has been or shall be brought against such person, if the person or persons involved:
A. 
Acted or failed to act in a matter in which the Borough has or had an interest;
B. 
Acted or failed to act in the discharge of a duty imposed or authorized by law; and
C. 
Acted or failed to take action in good faith.
In indemnifying and defending such persons, the Borough shall incur all costs of defending such action, which defense shall extend to a cross-claim or counterclaim against such person, as well as the costs of appeal, if any, including reasonable counsel fees and expenses, and shall save harmless and protect such person for any financial loss resulting therefrom.
The Borough shall not indemnify any person against the payment of punitive damages, penalties or fines, but may provide for the legal defense of such claims in accord with the standards set forth herein. The Borough may refuse to provide for the defense and indemnification of any civil action referred to herein if the Borough determines that:
A. 
The act or omission did not occur within the scope of a duty authorized or imposed by law;
B. 
The act or failure to act was the result of actual fraud, willful misconduct or actual malice of the person requesting defense and indemnification; or
C. 
The defense of the action or proceeding by the Borough would create a conflict of interest between the Borough and the person or person involved.
In any other action or proceeding, including criminal proceedings, the Borough may provide for the defense of a present or former official, employee or appointee, if the Borough first determines that such representation is in the best interest of the Borough and that the actions of the person to be defended did not constitute actual fraud, actual malice, gross misconduct, or an intentional tort.
Whenever the Borough provides for the defense of any action set forth herein and as a condition of such defense, the Borough may assume exclusive control over the representation of such persons defended and such persons shall cooperate fully with the Borough. In the event that any officer or employee or appointee engages an attorney without the approval of the Borough and prior agreement as to the cost of services, all costs so incurred shall be the sole responsibility of such officer, employee, or appointee.
The Borough may provide for the defense pursuant to this chapter by authorizing its attorney to act on behalf of the person being defended or by employing other counsel for this purpose or by asserting the right of the Borough under any appropriate insurance policy that requires the insurer to provide defense.
Notwithstanding anything to the contrary set forth above, the Borough will not be responsible for indemnification under the following conditions.
A. 
Judgment or settlement of a civil cause of action relating to a claim based upon willful fraud, malice, or misconduct.
B. 
Judgments calling for punitive or exemplary damages, unless there is a judicial determination that the actions of the officer, employee or appointee did not constitute actual fraud, actual malice, gross misconduct, or an intentional tort.
C. 
Any insurance coverage is available for payment.
D. 
Where any officer, employee, or appointee is found to have acted in violation of the Local Government Ethics Law, N.J.S.A. 40A:22-1 et seq.