Douce v Staffordshire County Council [2002] EWCA Civ 506

Statutory duty – negligence – duty of care – residential homes

Under the Registered Homes Act 1984, the council was the registration authority for a residential care home owned and operated by the claimant, Douce. Part of the council’s statutory duty was to set the level of staffing that Douce was required to provide. The council had had a policy which required staffing up to the maximum occupancy figure (‘staffing to capacity’), irrespective of the actual number of residents from time to time. However, following the change in law in 1993 which meant that would-be residents had to be assessed as to their need to be in residential accommodation, the number of new entrants to Douce’s home began to fall. In late 1996, following representations from Douce and others, the council adopted a new policy of requiring the homes only to have sufficient staff to care for the number and category of actual residents (‘staffing to occupancy’). Douce contended that it had been negligent for the council to construe the 1984 Act as requiring staffing to capacity, and that as a consequence Douce had substantially overpaid wages in an amount in excess of £300,000. Douce now sought to recover that sum from the council.

The council argued that in acting under the RHA 1984, it was exercising a discretion founded on policy for which it was liable only if acting so unreasonably as to be outside that discretion. The council further argued that if, in the performance of its statutory duties, it owed a duty to protect the owners from economic loss, that might inhibit it in the performance of its statutory duty to protect the vulnerable residents of such homes. After delivering its defence to the claim, the council applied for summary judgment.

Despite finding it ‘counter-intuitive’ to imagine that a regulatory body responsible by statute for the protection of vulnerable residents in homes owed a duty both to protect the vulnerable and at the same time a duty to avoid causing economic loss to the owners of such homes, the Court of Appeal upheld the view that it was at least arguable that a local authority, as the registration authority for a residential care home, owed a duty of care in fulfilling its statutory duty to set the staffing levels to which the claimants were required to adhere. The tortious liability of local authorities entrusted with a regulatory function was an area of developing law.  Further, the council’s assertion that it might be inhibited in the performance of its statutory duty to protect vulnerable care home residents were it also to owe a duty of care to the home owners in the way it conducted its regulatory and inspection functions was one that that needed to be tested. The court would use its powers to get the issue decided in court, on the factual evidence.

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