Cllr Jamie Huntman, Leader of the UKIP Group on Essex County Council said: "We as a Group understand that this is an Executive function for the Leader and his Cabinet to make.
"We also appreciate that they have sought advice on the success of pursuing such legal action on the grounds of fraud, debt and so forth.
"I agree with the Chairman of the Audit committee in regretting no further action is to be taken.
"We do feel however it sends out the wrong message to the people of Essex who although they do not fully comprehend the minutiae of legal argument understand when a man in position of trust and authority is seen to be enjoying an extravagant lifestyle on other peoples money, in this case the hard working taxpayer of Essex. I am sure everyone here agrees that at the very least it is morally wrong.
"For example how can you vigorously pursue, often with bailiffs Mrs. Brown in her terrace who is near to a nervous breakdown with council tax arrears yet when an elected member is rightly sent a bill for over £50k, which this council believes was used for inappropriate expenses, the case is dropped.
"Your Party is meant to be one of fairness; I am here because I took the incumbent Tories seat as people are fed up. The man and woman in the street will see this as another instance of the political elite looking out for one another. You should be leading by example.
"In the first week of becoming a County Councillor I was made aware of the Nolan Principles, standards for public life and it is my view that Lord Hanningfield only had a tentative grip on these. I for one believe he has brought shame on this County this Council and his own Party and am glad he no longer has a voice in this Chamber."
UKIP MEP Tim Aker said: "Mealy mouthed words won't reassure Essex taxpayers that their money is being defended. The Council should take every action against Lord Hanningfield possible."