Risk

Risk is now professionally ‘managed’ in most public sector organisations, in all its guises. The risk may be a risk of fire, IT meltdown, terrorism, local crises or emergencies etc – but the risk we are interested in here is risk of litigation.

Litigation divides up into civil and administrative law (hopefully not criminal, if we are considering public bodies). Civil law covers employment law disputes with the staff, contract disputes with suppliers and contractors, claims for negligence, trespass, assault, detention, nuisance and breach of data protection legislation. Administrative law risk relate to unreasonable, illegal, unfair or disproportionate discharge of statutory and related functions of the organisation in question. Most of this site is devoted to the administrative law side of health and social care functions, but just here we concentrate on negligence.

 

Liability to, and for, contractors in health and social care

We think that there is a way of dividing up the roles played by purchasers and providers in the provision of health and social care, which is central to the issue as to who can be liable for what, and to whom….

If one looks at the wording of the statutory functions under which services are provided in this field, sometimes the wording of a service function requires the authority to ‘provide’ the particular service (eg s117 Mental Health Act 1983 and s21 National Health Service Act 1977 sched 8, para 3 – re home help and laundry facilities).

In other cases the function is to make arrangements to promote or provide something – ie welfare (eg s29 National Assistance Act 1948 and s45 Health Services and Public Health Act 1968).

Sometimes there is express power to engage the private sector as agents for the performance of the function (eg services for the promotion of the welfare of old people: s45 HSPHA 1968 and wider welfare services for the disabled under s29 NAA).

In others it is to make arrangements for providing something (eg s21/26 NAA).

In yet others, it is to make arrangements for the provision of something, or the prevention of something (eg s21 NHSA 1977 schedule 8 para 2 services, for the purposes of the prevention, and care and aftercare of persons; also all of the s2 CSDPA 1970 services for the disabled. Para 3 sched 8 of the 1977 Act gives this route as an alternative means of ensuring home help and laundry facilities for the area.

Thus the functions can be divided up into the following categories covering who is actually discharging the function in question:

A bare power/Duty to provide something: here the authority has to do the providing directly or may use its incidental/implied statutory powers to engage, via contract, a company or other person to help it, in the performance of its own provision function.

A Power/Duty to make arrangements to provide something, promote something or for providing something: here there is an express power to contract with the private sector in order to provide something, but the role of the private sector would appear to be as agent for the authority, because the function in respect of which the arrangements may be made is the direct one ‘to provide’ as opposed to an indirect one ‘for the provision of’.

An express power to make arrangements with the private sector as agent: the situation is as above and the fact that the person counts expressly as an agent has implications for liability if something goes wrong.

A Power/Duty to make arrangements for the provision of something or prevention of something: here it seems that there is an express and broad power to contract with the private sector for it to provide something independently in its own right. On this basis the contractor is an independent contractor simply providing a service to the local authority, thereby giving it another way of discharging its own statutory function of enabling the provision of something. In our view the power make arrangements for the provision of something is a free-standing grant giving power which can be used to procure a service for the area, but not necessarily a service to the authority in respect of a particular person.

 

Implications for liability

If a client is damaged in the process of performance of a statutory function by purely negligent action of the individual who is providing the service, the first question relevant to liability we think, is who is providing the service, not in fact, but in law.

In-house provision by an authority

The worker can be liable in tort as an individual, but will not be insured. The authority will be primarily liable as the body discharging the function of providing the service. The authority will also be vicariously liable as the employer of any individual who was directly employed to do the job, unless they did the job in a way which was completely (and we do not just mean in breach of an instruction to do ‘no lifting’) outside the method endorsed by the authority.

s111 contracting, for the better performance of the authority’s own functions

If the authority chooses to discharge its own provision function, through an independent contractor, under s111, the authority will be primarily liable, in our view, notwithstanding the fact that the contractor who messes up, is not in law the agent of the authority, in the sense of formally sharing the responsibility for the role. The duty of care is non-delegable in our view.

s30 NAA contracting – domiciliary care

If it is the authority providing the service, through an agent, as s30 NAA deems it to be, when the services in question are welfare services under s29 NAA, the authority will be liable for the negligence of the agent. Even though it has employed someone external to perform the function, it is obliged by law to employ that outsider as its agent, and we think that the function implicitly requires that care be taken in the actual providing of whatever it is that the arrangements were for. The proper performance of the service is a non-delegable duty.

This situation pertains wherever the authority either has express or implied statutory power to contract with agents or has an express power to make arrangements to provide something, in our view.

 

s26 NAA contracting: residential care from the private sector

If it is the independent sector which is providing the service, as an independent contractor, the contractor will be primarily liable in negligence. The outsider who contracts with the Authority to provide a service independently will owe duties in tort to anyone who may reasonably be affected by their actions – the client is the obvious victim.

But the Authority may still be liable in tort, for breach of the duty of care which arose out of the performance of the function to make adequate arrangements for the service to be provided. It will be liable as the body on whom the ultimate duty to ensure that the service was provided, because there will have arisen a relationship of proximity between the client and the authority, leading to a duty of care not precluded by any requirement of public policy, to pick an adequate contractor. When this is the situation, the Authority would not be liable as the provider of the service but might still be liable as the body which negligently chose or briefed the service provider, if it could have been foreseen that their system of working or staff would put the client at risk.

 

Private/voluntary sector contracting

If the independent sector has contracted directly with the client, in return for a charge, (although its administration and charges level may be subsidised through grant funding by the authority), the contractor will be liable in contract as well as in tort to the service user.

 

Manual Handling

The Manual Handling responsibility is a duty owed by employers to their employees, not by authorities to their contractors. If inadequate assessment is done and the employee is hurt, the employer will be liable, but the authority may have added to the problem by not properly briefing the employer and might thus be joined in the proceedings by the employer.

If inadequate risk assessment is done by the employer, and the client is hurt, there are three possible defendants:

  1. a) where theauthorityis the employer, directly providing a service through its own employees, breach of the manual handling regulations will (as well as being negligent in relation to the employee if s/he is injured) also be evidence of negligence in relation to the client. The authority will be directly liable for its own negligence and vicariously liable for the employee’s negligence.
  2. b) anoutsider, who owes a duty in tort to the client, may have been negligent in appreciating that there was a need for a manual handling assessment or may have come up with some inadequate means of dealing with it. If the employer was working on behalf of the authority, theauthority may be liable too because the duty to ensure that care be taken may be non-delegable. If the employer was working independently, merely pursuant to an arrangement with the authority for the provision of a service to a client sent in that direction, then the authority would only be liable if it should have been more careful picking the company or if it inadequately assessed the client.
  3. c) an outsider’semployeemay have been personally negligent in not following a system for lifting etc. In this case their direct employer is still liable vicariously for their negligence unless it was beyond the scope of their employment. The liability of the authority depends on the basis of the contract as in b) above.

Consequently in contracts with the private sector it is important to obtain indemnities from the private sector in relation to liability which may be imposed on the authority as a result of the organisation acting on its behalf. Any reputable organisation or individual ought to have insurance to cover that risk. Indemnities have to be ‘reasonable’ under the Unfair Contract Terms legislation.

We think it is inappropriate to expect an indemnity against all liability flowing from the relationship between the authority, the client and the organisation because, as is pointed out above, the authority may be found to be independently negligent towards the client in its choice of the contracting organisation.

 

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