Grell joined the Labour Party in 1999 having been persuaded to do so by her friend and fellow student Chuka Umunna, who became an MP in 2010. At the time she stood in the Waltham Forest local election, she worked as a senior policy adviser to the conciliation service Acas. She had previously worked as a trainee speech writer for Anna Diamantopoulou. Following her election to the council, she went to work as a researcher for the then deputy mayor of London, Nicky Gavron. She served on the management committee of the pressure groupCompass from June 2005 until her resignation from the committee on 30 November 2007. Grell was also a school governor.
2006 local election controversy
Grell was elected in the May 2006 local elections for the Leyton ward of Waltham Forest London Borough Council. The ward returned three councillors, two Liberal Democrats and one Labour, Grell, in the third position. In 2002, Leyton had returned three Liberal Democrats. Grell gained the seat when the Liberal Democrats made gains in the borough. However, in September 2007, she went on trial on charges under the Representation of the People Act 1983 of making a false statement of fact about a candidate's personal character or conduct for electoral advantage, specifically that she made allegations of paedophilia against her gay Liberal Democrat opponent, Barry Smith. In addition to losing his seat Smith stated he was verbally abused in the street, spat at, and forced to relocate to the north of England as a result of the false allegations, fearing for his life. Grell admitted to outing her opponent and falsely claiming he had a 19-year-old Thai boyfriend, though she denied making the false allegations of paedophilia to four residents. Witnesses against Grell included a Labour voter and also another Labour candidate for her ward, Nicholas Russell. On 21 September 2007, she was found guilty on two counts fined £1,000 and ordered to pay £3,000 towards the prosecution costs. On 24 October 2007, Grell's supporters launched a campaign to finance her appeal, but it was later reported that the Labour Party would pay her legal costs. Labour then withdrew this support. On 27 November, The Independent newspaper quoted a party spokesman: "Following legal advice in the last few days, the Labour Party today withdrew its support for Miranda Grell's appeal." Criticism was levelled at the party for supporting Grell's appeal, in particular by gay rights campaigner and former Labour candidate Peter Tatchell. Grell's appeal hearing began on 28 November 2007 at Snaresbrook Crown Court before Judge Peter Birts QC and two lay magistrates. On 30 November, Grell's conviction for making false statements about another candidate to gain electoral advantage was upheld. She vacated her seat and was banned from holding public office for three years. The by-election for Leyton ward on 14 February 2008 was won by Liberal Democrat Winnie Smith. Following the appeal verdict, Grell resigned from the Labour Party, from her job working for the deputy mayor of London, and from the management committee of the Compass pressure group, but still claimed innocence, continuing to do so years afterwards. Grell lodged a first application with the Criminal Cases Review Commission in 2009, assisted by Lord Gifford QC.