Johnson & Ors v London Borough of Havering

Introduction. The claimants are representative residents of the care homes at Hampden Lodge, Elmhurst Lodge and Marks Lodge. The Lodges are elderly people’s homes and together with Winifred Whittingham House comprise the relevant four care homes for elderly people that are currently owned and controlled by the defendant Local Authority (“the Council”). All three claimants are in the residential care of the Council by reason of age and infirmity and are provided with that care in accordance with the Council’s statutory obligations under section 21 of the National Assistance Act 1948 (“the NAA 1948”).

In these proceedings for Judicial Review, the claimants challenge the Council’s decision in principle of 20^th July 2005, a decision that was retaken and confirmed on 11^th April 2006 (“the decision”): (i) to seek a private sector operator to accept transfer of, to operate and to expand Elmhurst Lodge and Winifred Whittingham House and (ii) to close Hampden Lodge and Marks Lodge, once their current residents have been transferred to suitable alternative accommodation, with a view to the sale of the property on which these homes are located. Hereafter, I will refer to these care homes collectively as “the homes”.

The Factual Background. It appears to be uncontroversial that there is a pressing need for the improvement of the facilities available to all residents and users of the homes in question. The quality of the current facilities is far from satisfactory. It is said that this has adverse implications for residents’ welfare and quality of life as well as posing risks to the health and safety of staff members working in the restricted space in residents’ rooms. The Commission for Social Care Inspection (the “CSCI”) has expressed concern about delay in the implementation of a plan to upgrade the homes.

According to the Council, the objective of the process that was commenced by the decision is to develop residential facilities which meet the environmental and spatial requirements set out in guidance that has been issued pursuant to the Care Standards Act 2000 (“the CSA 2000”) for newly built modern care homes.

Precisely how the necessary improvements to the homes should be undertaken is a matter that has been under discussion since 1999. It appears that the process has been delayed as a result of changes in political control of the Council and the need to consult widely at every stage and on all options.

In a decision of 14^th December 2004 (which is not subject to any challenge), the Council rejected various possible options, including that it should refurbish or remodel its existing care homes and continue to manage them with their existing staff. Following a further period of consultation and consideration, on 8^th June 2005 the Council’s Cabinet (“the Cabinet”) decided that its preferred option was: (i) the transfer to the private sector of Winifred Whittingham House and Elmhurst Lodge as going concerns and (ii) that, in principle, Hampden Lodge and Marks Lodge should be closed, as and when all their residents had transferred to suitable alternative accommodation, and that the surplus sites should be sold when vacant. Accordingly, it was also decided that a tendering process should commence to implement the chosen option. It is said that the Cabinet’s decision was made on the basis of extensive background material, including advice as to the legal implications for residents of the transfer of care homes to private sector operation and a presentation by the Claimants’ solicitor: see paragraph 11 of the Council’s written skeleton argument.

It was also decided on 8^th June 2005 that the Cabinet’s decision should be subject to further scrutiny by the Council’s Social Care and Health Overview and Scrutiny Committee (“the Overview and Scrutiny Committee”), following which the Cabinet would review the decision as necessary. A “Topic Group” was established by the Overview and Scrutiny Committee and this duly produced a report on 11^th July 2005. On 12^th July 2005, the Overview and Scrutiny Committee adopted the Topic Group’s report and proceeded to make appropriate recommendations to the Cabinet.

At its meeting on 20^th July 2005, the Cabinet had before it for its consideration the Topic Group’s report, the recommendations made by the Overview and Scrutiny Committee and the responses to those recommendations by the Council’s officers and by the relevant Cabinet member. In the event, the Cabinet decided to confirm its earlier decision of 8^th June 2005 and to proceed with a tender process.

The Council considered the matter further at a Cabinet meeting on 11^th April 2006, when the Cabinet was provided with a report that included an account of the legal implications of the transfer of the homes to a private sector operator. The report in question highlighted the claim made in these proceedings and dealt with the allegations about what the Cabinet did or did not understand on 20^th July 2005 regarding the legal implications of transfer of care homes to the private sector and how this affected its decision to proceed with the re-provisioning process. The Cabinet was invited to give further consideration to its 20^th July 2005 decision in the light of that account. As the report made clear, the Cabinet had the option to reverse or vary its earlier decision in the light of the report. In the event, the Cabinet noted the summary of the legal implications set out in the report, but concluded that no revision was required of its decision of 20^th July 2005. In effect, this later decision (i.e. the decision of 11^th April 2006) replaced the earlier decision of 20^th July 2005 and is the decision that governs the Council’s future actions and plans. It has also had the effect of rendering the first ground of challenge academic, other than on the question of costs (see paragraph 14 below).

Since the decision of 20^th July 2005, the tender process has commenced and has now progressed to an advanced stage. Expressions of interest were invited by advertisements published in September 2005. Nine tenderers out of twenty were shortlisted following consideration by the Council in October 2005. Invitations to tender were issued on 21^st December 2005 and a bidders’ day was held on 11^th January 2006. The original deadline for return of tenders was 17^th March 2006, but this was extended to 20^th June 2006 in the light of these proceedings.

It appears that the current position is that only three of the nine tenderers who were invited to tender remain interested in the project. At the date of the hearing of these proceedings (8^th and 9^th May 2006), no tenders had been received. Accordingly, details of the tenderers’ proposed methodology for the delivery of services and (for example) the process of change for residents were not available. As Mr McCarthy QC on behalf of the Council pointed out, once the tenders have been received and considered, it will be possible to evaluate the effectiveness of the proposals and there may be a period of further negotiation leading to tenderers submitting their best and final offer. During that period, the tenderers may make representations about any contractual arrangements and there remains scope for further negotiations, even once a bid has been selected: see paragraph 30 of the Council’s written skeleton argument.

It appears that there will then be a further stage in the overall process in which the Council’s officers will prepare and present a pre-award report to Cabinet which will evaluate the net benefits to the Council of entering into a contract with a tenderer, compared with the net benefits of continuing to provide the relevant services in-house. Legal advice may also be given at this stage with regard to the proposed contractual arrangements, the legal status of any prospective provider and the Council’s own statutory obligations vis-à-vis residents. The Cabinet will then have to decide what, if any, authorisation should be given for entering into a contract with a prospective provider. As Mr McCarthy observed, the Council may decide that none of the tenders are of sufficient quality, or offer sufficient value for money, and that the tender process should be halted: see paragraph 21 of the Council’s written skeleton argument.

Accordingly, as Mr McCarthy pointed out (see paragraph 22 of the Council’s written skeleton argument), the effective claim in these proceedings (see paragraph 15 below) is a challenge to prospective contractual arrangements for the transfer of residential homes to a private sector provider, which is brought before there has been any final decision to implement an actual transfer to any specific provider and before the details of any contract to achieve that purpose have been finalised.

The Issues. Since the Council retook and confirmed its earlier decision on 11^th April 2006 in the light of fresh legal advice, Miss Simor accepted on behalf of the claimants that the original ground 1 of challenge (to the effect that the original decision had been taken on the basis of one or more errors of law) has been rendered academic, save as to the question of costs. The original ground 3 is a claim that transfer of any of the claimants to the care of a private sector provider would breach their Convention rights under Articles 2 and 3 of the European Convention on Human Rights (“the ECHR”). The original ground 4 is a procedural challenge to the decision, whereby the claimants allege that they have not been sufficiently involved in the Council’s decision making process. However, Miss Simor made it clear that the original grounds 3 and 4 are no longer pursued (see paragraph 8 of her written skeleton argument).

Accordingly, the only effective ground of challenge for the purpose of these proceedings is the original ground 2, which Miss Simor summarised in the following terms (see paragraph 7 of her written skeleton argument):

“The closure and transfer to the private sector of the homes would lead to residents being deprived of effective protection for their human rights, which the (Council) is obliged to guarantee, and would thus be unlawful under section 6(1) of the (Human Rights Act 1998) as constituting a failure by the (Council) to act compatibly with the Convention.”

It was common ground that this ground of challenge involves consideration of the following two issues of principle, namely:

The first named intervener, the Secretary of State for Constitutional Affairs (“the Secretary of State”), and his department have policy responsibility for the HRA 1998 and its implementation. In addition, I accept that central government has a strong policy interest to ensure that effective and appropriate measures are taken to protect those in need of care and assistance in society, including by ensuring that there is an appropriate legal framework in place for an efficient and effective system for the provision of accommodation to such persons. I also accept that central government has a strong policy interest to ensure that effective provision of accommodation by the private sector is among the options available to meet the needs of such persons (see paragraph 2 of Mr Sales’ written outline submissions on behalf of the Secretary of State).

It was in the light of these policy considerations and in order to address the court on the issues of principle set out in paragraph 16 above that the Secretary of State sought and obtained permission to intervene in these proceedings (see the order of Sullivan J dated 26^th April 2006).

The second named intervener, the Disability Rights Commission (“the DRC”) was created in April 2000 pursuant to section 1 of the Disability Rights Commission Act 1999 (“the 1999 Act”). Its aim is to create “create a society where all disabled people can participate fully as equal citizens”. So far as material, section 2(1) of the 1999 Act requires the DRC: (i) to work towards the elimination of discrimination against disabled persons, (ii) to promote the equalisation of opportunities for disabled persons and (iii) to take such steps as it considers appropriate with a view to encouraging good practice in the treatment of disabled persons. Because it considered that the issues raised by this case engaged these obligations, the DRC also sought and obtained Sullivan J’s permission to intervene in these proceeding.

The relevant statutory provisions. So far as material, sections 3, 6 and 7 of the HRA 1998 provide as follows:

“3 Interpretation of legislation

(1)

So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.

(2)

This section –

(a)

applies to primary legislation and subordinate legislation whenever enacted;

(b)

does not affect the validity, continuing operation or enforcement of any incompatible primary legislation; and

(c)

does not affect the validity, continuing operation or enforcement of any incompatible subordinate legislation if (disregarding any possibility of revocation) primary legislation prevents removal of the incompatibility.

…

6

Acts of public authorities

(1)

It is unlawful for a public authority to act in a way which is incompatible with a Convention right.

(2)

…

(3)

In this section “public authority” includes

(a)

…

(b)

any person certain of whose functions are functions of a public nature … .

…

The relevant statutory framework relating to care homes can be summarised as follows. Section 21(1) of the NAA 1948 places a duty on local authorities to “make arrangements for providing accommodation to persons who by reason of age, illness, disability or any other circumstances are in need of care and attention which is not otherwise available to them”. By virtue of section 26(1) of the NAA 1948, arrangements made under section 21 may include arrangements for provision of accommodation by voluntary organisations or any other person. Under section 26(1A) of the same Act, where accommodation is provided in a “care home” , that care home must be registered under the CSA 2000 and is subject to direct statutory duties imposed on it by Regulations made under that Act, namely the Care Home Regulations 2001 SI 2001/3965. A “care home” is defined in section 3 of the CSA 2000 as an establishment which provides accommodation together with nursing or personal care for persons who are ill, who have or have had a mental disorder, who are disabled or infirm, or who are or have been dependent on alcohol or drugs.

The Public Function Issue. The main submissions on this first issue were made by Mr Sales and were to the general effect that care homes in the private sector, which provide accommodation and care to residents pursuant to arrangements made by a local authority under sections 21 and 26 of the NAA 1948, are exercising public functions within the meaning of section 6(3)(b) of the HRA 1998. If that submission is correct, then the remaining challenge mounted in these proceedings must fail because, by a parity of reasoning, the closure and transfer to the private sector of the homes in question would not deprive the claimants of effective protection with regard to their human rights, because they would still be able to enforce those rights directly against the private sector provider pursuant to sections 6(1) and 7 of the HRA 1998, notwithstanding the closure and transfer.

Mr Sales’ submissions on this aspect of the matter were fully supported and adopted by both Miss Simor on behalf of the claimants and Mr Wolfe on behalf of the DRC. For his part, Mr McCarthy placed a greater emphasis on the factual circumstances and other “material factors” of the present case as justifying the conclusion that the functions of the proposed private sector provider would be functions of a public nature within the meaning of section 6(3)(b) of the HRA 1998 and stressed that the Council’s primary case in these proceedings was concerned with the second issue (i.e. the Breach of Convention Rights Issue: see paragraph 16 above).

Mr Sales referred to the decision of the Court of Appeal as to the meaning of “functions of a public nature” in Section 6(3)(b) of the HRA 1998 in Poplar Housing and Regeneration Community Association Ltd ~v~ Donoghue (2002) QB 48 (hereafter “Donoghue”). The facts in that case were that the defendant had been granted a tenancy by a local authority, Tower Hamlets, pending a decision as to whether she was intentionally homeless. Tower Hamlets then transferred its housing stock to Poplar Housing, a registered social landlord under the Housing Act 1996. Subsequently, Poplar Housing sought possession of the premises in question. As part of her defence, the defendant alleged that in providing her with accommodation Poplar Housing was exercising a function of a public nature for the purposes of Section 6 (3)(b) of the HRA 1998.

Mr Sales submitted that there were three points in the reasoning of the Court of Appeal in Donoghue that neededto be emphasised. First, Mr Sales stressed that the Court of Appeal held that the test under Section 6 of the HRA 1998 is “clearly inspired” by the approach of the courts to amenability to judicial review: see paragraph 65(i).

Second, Mr Sales pointed out that the Court of Appeal held that it is not sufficient to establish that functions carried out by a private body are functions of a public nature, merely to show that those functions are carried out pursuant to arrangements with a public body and that the arrangements fulfil that body’s statutory duties. Equally, the fact that a function has been contracted out is not in itself sufficient to establish that such a function has become private for the purposes of the HRA 1998. Thus, when giving the judgment of the court, Lord Woolf CJ said this at paragraphs 58 and 59:-

“The fact that a body performs an activity which otherwise a public body would be under a duty to perform cannot mean that such performance is necessarily a public function. A public body in order to perform its public duties can use the services of a private body. Section 6 should not be applied so that if a private body provides such services, the nature of the functions are inevitably public. … The purpose of section 6(3)(b) is to deal with hybrid bodies which have both public and private functions. It is not to make a body, which does not have responsibilities to the public, a public body merely because it performs acts on behalf of a public body which would constitute public functions were such acts to be performed by the public body itself. An act can remain of a private nature even though it is performed because another body is under a public duty to ensure that the act is performed.”

Third, Mr Sales emphasised that the Court of Appeal held that what determines whether acts are public is “a feature or combination of features which impose a public character or stamp on the act”: see paragraph 65(v) of the judgment. The court found that merely acting in the public interest did not point to the body being a public authority. The court also referred to the following two features which did: (i) statutory authority and (ii) control by another public authority which results in the acts of the private body becoming “enmeshed” with those of the public authority: see paragraph 65(v).

Donoghue was next followed by the decision of the Court of Appeal in R (on the application of Heather and others) v Leonard Cheshire Foundation and another (2002) 2 All ER 936 (“Leonard Cheshire”). In Leonard Cheshire the claimants were long-term residents of a care home run by a charity, the Leonard Cheshire Foundation (“LCF”). The claimants were provided with accommodation in accordance with arrangements made by various local authorities with LCF pursuant to their statutory duties and powers under Sections 21 and 26 of the National Assistance Act 1948.

It was the claimants’ case that, in making the decision to close the care home and to relocate the claimants, LCF was exercising functions of a public nature within the meaning of Section 6 (3)(b) of the HRA 1998. However, when giving the judgment of the court, Lord Woolf CJ (sitting with Laws and Dyson LJJ) emphatically rejected that argument, as follows (at paragraph 34):

“In our judgment the role that LCF was performing manifestly did not involve the performance of public functions”.

In reaching that conclusion, the Court of Appeal followed the approach adopted in Donoghue and upheld the decision of Stanley Burnton J at first instance. In short, in Leonard Cheshire the Court of Appeal held that, although a local authority providing accommodation pursuant to its duties under Section 21 of the NAA 1948 is performing a public function in so doing, where the local authority makes arrangements with a private body (in that case a charity) under Section 26 of the NAA 1948 and the charity provides accommodation accordingly, “it does not follow that the charity is performing a public function”: see paragraph 15 of the judgment.

The court then went on to consider whether there were any other features that indicated that the provision of accommodation by LCF was a public function, and held that there were not. In particular, the court rejected the submission that the following factors were sufficient to show that LCF was performing a “function of a public nature”: (i) provision of funding for the residents’ places by local authorities, (ii) statutory regulation of care homes and (iii) the triangular relationship between LCF and the placing/funding authority and each resident, in which the relationship between resident and placing/funding authority was governed by public law.

As it seems to me, Leonard Cheshire is clear Court of Appeal authority, binding upon me, to the effect that a private body, in providing accommodation to persons in need of care and assistance pursuant to arrangements made with a local authority in the exercise of that authority’s functions under sections 21 and 26 of the NAA 1948, is not ipso facto exercising functions of a public nature. I refer to the summary of the court’s decision in the head note, as follows:

“Held – The role that the foundation was performing manifestly did not involve the performance of public functions. The fact that it was a large and flourishing organisation did not change the nature of its activities from private to public. While the degree of public funding of the activities of an otherwise private body was relevant to the nature of the functions performed, it was not by itself determinative of whether the functions were public or private. The Foundation was not standing in the shoes of the local authority. Section 26 of the 1948 Act provided statutory authority for the actions of the local authority, but provided the foundation with no powers. The foundation was not exercising statutory powers in performing functions for the claimants. The fact that, if the foundation were not performing a public function, the claimants would not be able to rely on article 8 as against it could not change the appropriate classification of the foundation’s function.”

However, it was Mr Sales’ basic submission that the decision of the Court of Appeal in Leonard Cheshire must be re-evaluated in the light of the decision of the House of Lords in Aston Cantlow PCC ~v~ Wallbank (2004) 1 AC 546 (“Aston Cantlow”).

In Aston Cantlow the question was whether a parochial parish council was a “core” public authority for the purposes of section 6 of the HRA 1998 and if not, whether it was exercising functions of a public nature within the meaning of section 6(3)(b) of the 1998 Act when it served the defendant with a statutory notice to repair the chancel of the parish church. The House of Lords decided: (i) that the parish council was not a core public authority and (ii) that in serving the statutory notice to repair it was not exercising public functions within the meaning of section 6(3)(b).

Mr Sales submitted that their Lordships’ analysis of the proper approach to the interpretation of section 6 of the HRA 1998 differs significantly in a number of respects from that of the Court of Appeal in both Donoghue and Leonard Cheshire. Mr Sales identified what he considered to be the main differences as follows: (i) a wide construction of section 6(3)(b) should be favoured; (ii) section 6 must be interpreted in the light of the ECHR and the jurisprudence of the European Court of Human Rights (the “ECtHR”) on state responsibility under the scheme of the ECHR; (iii) the question of whether the authority is exercising a public function is not the same as whether an authority is amenable to judicial review: domestic administrative case law may assist in answering this question, but it is not determinative; and (iv) there is “no single test of universal application” and the question of whether or not a body exercises public functions will turn on the facts of each case.

In the subsequent decision of the Court of Appeal in R (Beer) ~v~ Hampshire Farmer’s Markets Ltd (2004) 1 WLR 233 (“Beer”), the question was whether a company set up by a local authority to run farmers’ markets was exercising functions of a public nature when considering a licence application from a potential stall holder. The Court of Appeal held that it was. For present purposes, it is sufficient to note that the Court of Appeal proceeded on the assumption that the tests for amenability to judicial review and that for “public authority” under Section 6(3)(b) were “on the facts of the case” the same: see paragraph 29 of the judgment of Dyson LJ. The court also noted that the House of Lords had held in Aston Cantlow that the two tests were not the same, and that in the latter case the Strasbourg jurisprudence must be taken into account – “reliance on domestic cases must be tempered by, and sometimes yield to, relevant Strasbourg jurisprudence”: see paragraphs 25 and 28 of the judgment of Dyson LJ. However, the court found that the decision in question was clearly amenable to judicial review and that there was no Strasbourg case law cited to the court to indicate that any different result should be arrived at in relation to the question of whether it was a public authority: see paragraph 29 of the judgment.

In my view, it is important to note that Dyson LJ made it clear in his judgment that he did not agree with the submission that Aston Cantlow had over-ruled Donoghue and Leonard Cheshire. What Dyson LJ said was this (see paragraph 25):

“Provided that it is born in mind that regard should be had to any relevant Strasbourg jurisprudence, then the passages that I have quoted from the judgments in the two earlier cases (paragraph 65 of Donoghue and paragraph 35 of Leonard Cheshire) will continue to be a valuable source of guidance. Indeed paragraph 12 of Lord Nicholls’ speech is redolent of the flavour of that guidance.”

Longmore LJ agreed with this statement and added: “these cases continue to give authoritative guidance on amenability to judicial review”.

Mr Sales then referred to a number of decisions of the ECtHR under the heading “Strasbourg Case Law”: see paragraphs 35 to 44 of his outline written submissions and see, in particular, Van der Mussele ~v~ Belgium (1984) 6 EHRR 163, Costello-Roberts ~v~ United Kingdom (1995) 19 EHRR 112, Wos ~v~ Poland 1^st March 2005, Buzescu ~v~ Romania 24^th May 2005 and Sychev ~v~ Ukraine 11^th October 2005.

As it seems to me, the principles or “themes” that can be derived from those cases and which, in my view, are the principles that have the most application to the circumstances of the present proceedings are those identified and summarised in paragraph 42 of Mr Sales’ written submissions, as follows:

Having considered the matter carefully, I am satisfied that I can deal with this aspect of Mr Sales’ submissions very briefly by stating that I am not persuaded that any of the principles to be derived from these cases justify a departure from the principles established in Leonard Cheshire and which are binding upon me. Furthermore, I do not accept that there are any significant factual differences or other material factors which would enable me to come properly to a different conclusion in this case to that reached in Leonard Cheshire.

It therefore follows that I am bound to apply the principle stated in paragraph 15 of Lord Woolf’s judgment in Leonard Cheshire, namely:

“If the authority itself provides accommodation, it is performing a public function. It is also performing a public function if it makes arrangements for the accommodation to be provided by LCF. However, if a body which is a charity, like LCF, provides accommodation to those to whom the authority owes a duty under section 21, in accordance with an arrangement under section 26, it does not follow that the charity is performing a public function. Before the 1998 Act came into force, we doubt whether it would have been even contemplated that LCF in providing care homes for people in the position of the appellants would be performing a public function.”

In my view, it is also appropriate to refer again to paragraph 59 of the judgment in Donoghue,which was cited with approval in Leonard Cheshire, as follows

“59.

The purpose of Section 6(3)(b) is to deal with hybrid bodies which have both public and private functions. It is not to make a body, which does not have responsibilities to the public, a public body merely because it performs acts on behalf of a public body which would constitute public functions were such acts to be performed by the public body itself and an act can remain of a private nature even though it is performed because another body is under a public duty to ensure that that act is performed.”

Having regard to the principles enunciated in the previous paragraph, principles that I am bound to apply, I am satisfied that the question posed by the public function issue is one that must be answered in the negative. It follows that the outcome of that issue is not fatal to the application. Accordingly I now turn to consider the remaining issue of principle.

The Breach of Convention Rights Issue. This part of the claimants’ case can be taken more briefly. Broadly stated, it was Miss Simor’s submission that: (i) transfer to the private sector would result in a significant diminution in the claimants’ Convention rights protection and (ii) as such, it would be unlawful under Section 6(1) of the HRA 1998 as a failure by the Council to ensure real and effective protection for all of the claimants’ Convention rights.

However, as Mr McCarthy observed, the short answer to this particular issue is that after any such transfer, the claimants will still continue to enjoy the very same Convention rights as against the Council as they do at present. The Council, as a core public authority, has an obligation to act compatibly with the claimants’ Convention rights (see Section 6(1) of the HRA 1998), which may be enforced by anyone who is a “victim” of any breach of those Convention rights. A transfer of the homes to the private sector does not absolve the Council of its duty under Section 6(1) to act compatibly with Convention rights, including the Convention rights of the claimants. Thus, if a transfer does take place, the Council will continue to be obliged to take appropriate steps (for example) to safeguard the lives of the claimants, to protect them from inhuman and degrading treatment and to safeguard their private and family life, home and correspondence. The real and effective protection of the claimants’ rights will continue to be ensured by the Council and, if necessary, by the Courts. In short, transfer from local authority to private sector accommodation does not, in principle, lead to the residents’ Convention rights being either diminished or removed. In effect, the residents will continue to retain their Convention rights’ protection under the HRA 1998 in the same way and to the same extent as previously.

Accordingly, I am satisfied that the answer to the Breach of Convention Rights Issue is also in the negative. It therefore follows that this application must fail.

Conclusion. For the forgoing reasons I have come to the firm conclusion that this application must be and is hereby dismissed.