YL (by her litigation friend the Official Solicitor) (FC) v Birmingham City Council and Others [2007] UKHL 27

The main issue in this appeal was whether a care home when providing accommodation and care to a resident pursuant to arrangements made with a local authority under sections 21 and 26 of the National Assistance Act 1948 (NAA) was “performing functions of a public nature” for the purposes of section 6 (3)(b) of the Human Rights Act 1998 (the Act) and is therefore a public authority and obliged to act compatibly with Convention rights under section 6 (1) of that Act.  A further issue was whether a care home’s act in serving a notice to terminate its agreements with a resident constituted a private act for the purposes of section 6 (5) of the Act.

The appellant YL was an 84 year old lady with Alzheimer’s disease.  She lived in a nursing home owned and run by Southern Cross Healthcare Ltd (S Ltd).  S Ltd had a contract with the respondents Birmingham City Council (Birmingham) to provide accommodation for the residents placed with them in accordance with the terms of the agreement and of Birmingham’s care plan for each individual resident.  In return, Birmingham agreed to pay the social services price for each resident. In addition to residential care, S Ltd also undertook to provide the appropriate level of nursing care assessed to be needed by each resident and the local Primary Care Trust agreed to pay for this.  The contract between S Ltd and Birmingham contained a clause requiring that the service provider at all times acted compatibly with the Convention rights within the meaning of section of the1998 Act.

The contract between YL and the nursing home permitted S Ltd to terminate if fees were not paid promptly, the home was no longer able to meet YL’s needs or the company considered the circumstances or behaviour of the resident to be ‘seriously detrimental to the home or the welfare of other residents’.   In a letter to YL, S Ltd gave her 28 days notice prompted by concerns, which are disputed, about the attitude of her husband towards her and the attitude of her daughter towards staff.  When it became apparent that the company intended to serve a formal notice to quit the Official Solicitor launched proceedings on behalf of YL in the High Court.  Amongst the declarations sought was a declaration that S Ltd, in providing accommodation and care for YL was exercising public functions for the purpose of section 6 of the 1998 Act.  The Court of Appeal found against YL following the Leonard Cheshire Foundation case but recognising the importance of the issue, it gave leave for YL to appeal to the House of Lords.

In their dissenting judgments, Lord Bingham and Baroness Hale agreed that the factors to be taken into account when deciding whether a function is one of a public nature included the extent to which in carrying out the relevant function the body was publicly funded or was exercising statutory powers or was taking the place of central government or local authorities or was providing a public service.  They felt that these factors told heavily in favour of section 6(3) applying to this case.  An important factor was whether the State had assumed responsibility for seeing that the task was performed.  The State had assessed YL’s needs under section 21 NAA and it would have been artificial to draw a distinction between meeting those needs and the task of assessing and arranging them when it had assumed responsibility for seeing that both was done.  It was not doubted that health care was a public function and there were strong public interest reasons why social care should have the same status.  Providing a service to individual members of the public at public expense was another relevant factor. Their conclusion was that S Ltd, in providing accommodation health and social care for YL was performing functions of a public nature.  This was a function performed for YL pursuant to statutory arrangements at public expense and in the public interest.  The Court of Appeal had been wrong to reach a different conclusion on indistinguishable facts in the Leonard Cheshire Foundation case.

In dismissing the appeal, Lord Scott focused on the nature of the contract entered into between YL and S Ltd.  It was a private law contract; S Ltd received no public funding and did not benefit from any statutory powers. It was at liberty to accept or reject residents and charges whatever fees in its commercial judgment it thought suitable.  It was operating in a commercial market with commercial competitors.  Their Lordships did not think that that the features relied upon by YL carried much weight.  S Ltd was not publicly funded, the fees it was paid by Birmingham paid for a service in commercial terms.   S Ltd was carrying on a private business with a customer who just happened to be a public authority.  It was also too simplistic to compare the nature activities of private care homes with those of local authority care homes.  A local authority was doing so pursuant to public law obligations. The nature of the function of privately owned homes such as those owned by S Ltd, no different for section 6 purposes from that of privately owned schools or privately owned hospitals (with some exceptions), were essentially different from that of local authority care homes.  The claim that by giving section 6 a wide and generous interpretation would give vulnerable residents greater protection was unnecessary.  The contract between YL and S Ltd contained an express term that S Ltd should observe the Convention rights of its residents and there was no need to depart from the ordinary meaning of “functions of a public nature” in order to provide extra protection to YL and those like her.  Their Lordships were unable to conclude that S Ltd in managing its care homes were carrying out functions of  public nature for section 6(3)(b) purposes whether the contractual charges payable in respect of residents who were privately funded or met out of public funds.  As to the second issue, the act giving rise to the litigation, the notice was served in purported reliance on a contractual provision in a private law agreement.  It affected no one but the parties to the agreement and could not be anything other than private. Aston Cantlow v Wallbank followed.

Lord Mance stated that the interpretation and application of section 6(3)(b) had been left by Parliament to the courts.  There was no statutory definition of “functions of a public nature”.  He looked at the duty of local authorities under section 21 NAA to make arrangements for providing residential accommodation for certain classes of people which could include arrangements made with the private sector. R v Wandsworth LBC There was no basis on which a private care home could be exercising functions of a public nature in providing care and accommodation for self-funders.  The section 21 duty was a safety net conditional upon care and attention being not otherwise available. The local authority’s involvement is intended to make arrangements (including funding) which put those in need in the same position as the self-funders.  He questioned the inequitable position that would exist if local authority residents should be afforded the protection of the 1998 Act which would not be afforded to self-funders.  If further protection was deemed to be necessary in respect of privately owned care homes in addition to that available under the common law or statute it could be achieved by use of the Care Standards Act 2000.

Lord Neuberger, whilst finding that the statutory involvement of Birmingham in contracting with S Ltd  could be said to have a public connection it could not be said that the function of S Ltd in providing care and accommodation was one of a public nature.  It was meaningless to describe a function of a core public authority as being of a public nature since the concept only had relevance to hybrid authorities.  Even if Birmingham performed functions of a public nature by arranging care and accommodation that would not mean that the actual provision of the care and accommodation to YL must thereby be converted from what would otherwise be a function of a private nature into one of a public nature.  The fact that S Ltd was paid by Birmingham for the provision in its care home of care and accommodation for YL did not appear to him to render such provision “a function of a public nature”.

Appeal dismissed

Comment

It now seem settled that a care home, in providing care and accommodation to a resident placed by a local authority under sections 21 and 26 of the National Assistance Act 1948 is not “performing functions of a public nature” for the purposes of section 6(3)(b) of the Human Rights Act 1998.  In dissenting judgments, seeking to overrule the Leonard Cheshire case, their Lordships argued that it had been the intention of Parliament, in the passing of the1998 Act, to embrace private bodies who were carrying out functions of local authorities in relation to the provision of care.  However they rejected one of the recommendations of the House of Lords and House of Commons Joint Select Committee on Human Rights, that there should be an interpretative statute specifically directed to clarify the interpretation of “functions of a public nature” under section 6(3)(b).   There were dangers in formulating a general test applicable to all cases and the draftsman had wisely left it to the courts to decide on the facts of a particular case where the line should be drawn.

It is to be noted that local authorities, in making community care arrangements and placing clients with private bodies, still remain subject to the 1998 Act.

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