Unless you've been sleeping under a rock or just returned from the tropics, you are now well aware that Stock Day's out-of-court legal settlement in a defamation case will cost Alberta taxpayers almost $800,000 ($792,064.40 to be exact).

In April 1999, when Mr. Day was Alberta Treasurer, he wrote a letter to the Red Deer Advocate (on MLA letterhead) that criticized a local lawyer for defending a convicted pedophile. The complication in this case is that Lorne Goddard (the lawyer) is a school trustee and Mr. Day brought into question the merits of having a school trustee (empowered with making decisions for children) defend a pedophile suggesting that Mr. Goddard shares his client's views.

The rest, as they say, is history. Mr. Goddard sued for defamation of character and this two-year old case was recently settled out of court to the tune of almost 800K, which taxpayers are on the hook for. To be fair, Mr. Goddard will only receive about $60,000. The rest goes to legal fees, about $240K for Mr. Goddard's lawyers and close to $500K for Mr. Day's defence.

As an MLA, Mr. Day was covered under Alberta's Risk Management Fund which covers all elected officials and public servants up to a maximum of $35 million, with taxpayers paying the premiums and a $1 million deductible on all claims.

We'll leave it to the pundits and voters in general to judge Mr. Day's actions and their implications for the soon to be call Alberta election. But this whole affair has implications far beyond Alberta. Indeed, these types of funds/arrangements exist at all levels of government in every province. Broader questions of policy and principle need to be addressed so the rancour surrounding the Stockwell Day case is not in vain.

First, should politicians be eligible for such coverage courtesy of taxpayers when they are sued Answer: a qualified yes. It is common practice in private business to insure oneself and one's employees for this risk, public servants and elected officials should expect the same. However, clear and transparent rules should be set out for this coverage.

To protect taxpayers, one must be acting in the context of the regular duties and conduct of a public servant or elected office holder to be eligible for coverage. Due to the out of court settlement in Alberta, it was never determined if Mr. Day wrote "the letter" in his capacity as an MLA thereby making him eligible for coverage. The CTF continues to press the Alberta Justice Minister to seek a proper answer to this question.

Second, the determination of eligibility for coverage must be arrived at through an independent and non-partisan officer of the legislature. A committee of MLAs in a province or the House of Commons Board of Internal Economy (as is the case federally) should not make these decisions. Again, these are questions of fact to be decided by independent legislative officers of the legislature, judges on fact not decisions of political fraternity to be decided by politicians.

Third, politicians should bear some of the cost for maintaining these insurance type schemes. This is similar to members of Boards of Directors pitching in to cover a portion of their directors and officers' legal liability coverage.

Finally, at the appropriate time, details of all settlements from such funds should be made public. In the interests of accountability and open government this is only fair.

Following these principles will strike the appropriate balance between protecting taxpayers and the public purse while simultaneously giving our elected officials the latitude to do their jobs effectively but not conferring any privileges to them above those of ordinary citizens.