Jain & Anor v Trent Strategic Health Authority

A public authority exercising statutory functions may owe a common-law duty of care where the decision is justiciable, sufficient proximity and foreseeability exist, and it is fair, just and reasonable to impose the duty.

An applicant for a draconian ex parte order must present a fair and balanced account, including material favourable to the respondent. A failure to do so may constitute negligence where the application causes foreseeable economic loss. The intervening decision of the magistrate will not necessarily break the chain of causation where the decision was obtained on materially incomplete or misleading information.

The claimants operated a registered nursing home. The defendant Health Authority applied without notice under section 30 of the Registered Homes Act 1974 for urgent cancellation of the home’s registration. A magistrate granted the order, the residents were removed and the home closed.

The Registered Homes Tribunal later allowed the claimants’ appeal. The claimants claimed damages in negligence, alleging that there had been no emergency, that the application was unjustified, and that the statement of reasons materially misrepresented the position. The issues were whether the Authority owed a duty of care, whether that duty was breached, and whether the magistrate’s order broke the chain of causation.

1. Liability and causation. The issue of liability and causation was decided in favour of the claimants.
2. Duty of care. The three-stage framework identified in Carty v Croydon London Borough Council applied: whether the issue was justiciable, whether the statutory discretion had been exercised so unreasonably as to fall outside its ambit, and whether it was fair, just and reasonable to impose a duty. The decision was justiciable.
3. Applying Caparo Industries v Dickman, there was sufficient proximity because the Authority had close, continuing regulatory dealings with the nursing home. Loss was foreseeable because cancellation of registration would remove the residents, the home’s source of income, and diminish the premises’ value. The circumstances also made it fair, just and reasonable to impose a duty.
4. Ex parte applications. An applicant for an order with potentially severe effects on reputation or livelihood must disclose the material facts fairly and candidly. The Authority’s duty of utmost good faith required a balanced presentation. The statement of reasons contained serious misrepresentations, exaggerations and damaging irrelevancies, and omitted material favourable to the claimants.
5. The Authority’s decision to seek urgent closure was plainly wrong and Wednesbury unreasonable. The evidence did not establish an emergency. The failure to act in accordance with the practice accepted by a responsible body of persons of the same profession or skill also constituted negligence under the Bolam v Friern Hospital Management Committee approach.
6. The magistrate’s decision was not a sufficient intervening cause. Although the magistrate was not a rubber stamp, applications of this nature depend on trust. Where the magistrate was materially misled or deprived of a fair account, the defendant could not rely on the order to break the causative link.