YL v Birmingham City Council & Ors

This appeal concerned whether a privately owned care home, when providing accommodation and care pursuant to arrangements made with a local authority under sections 21 and 26 of the National Assistance Act 1948, was performing "functions of a public nature" within the meaning of section 6(3)(b) of the Human Rights Act 1998 and thus a "public authority" required to act compatibly with Convention rights under section 6(1). The House divided. Key legal principles identified were:

• The controlling consideration under section 6(3)(b) is the nature of the function being performed (public or private), not the identity of the body performing it.
• Factors relevant to whether a function is public include the nature and extent of statutory powers or duties, the role and responsibility of the state, the degree of state regulation and supervision, the extent to which public funds are used, and the risk that improper performance will infringe Convention rights. No single factor is determinative.
• Section 6(5) preserves that even a body with some public functions will not be a public authority in relation to a particular act if the nature of that act is private.

On the facts the majority concluded that the care-home operator was not performing functions of a public nature for section 6(3)(b) purposes: its activities were carried on as a private, profit-making business under contracts and private law duties, even where placements and payments were arranged under the 1948 Act. The minority considered the function to be public in nature because the work was performed pursuant to statutory arrangements, at public expense and under detailed public regulation.

Background and facts. The appellant, an elderly woman with Alzheimer’s disease, had been resident in a nursing home run by Southern Cross Healthcare Ltd since January 2006. Her placement was arranged pursuant to contractual, tripartite arrangements involving Birmingham City Council under its duties in sections 21 and 26 of the National Assistance Act 1948. Southern Cross served notice to terminate the placement; the Official Solicitor brought proceedings seeking a declaration that Southern Cross, in providing accommodation and care under those arrangements, was exercising functions of a public nature for the purpose of section 6(3)(b) of the Human Rights Act 1998.

Procedural posture. The question was directed to be tried as a preliminary issue. The Family Division (High Court) decided against the appellant ([2006] EWHC 2681 (Fam)). The Court of Appeal affirmed that decision ([2007] EWCA Civ 26; [2007] 2 WLR 1097). The appellant appealed to the House of Lords.

Relief sought and issues. The appellant sought a declaration that the care-home operator was a public authority under section 6(3)(b) of the Human Rights Act 1998 and therefore bound to act compatibly with Convention rights (notably article 8) under section 6(1). The issues framed were (i) whether Southern Cross had functions of a public nature for the purposes of section 6(3)(b), and (ii) if so, whether the specific act complained of (service of notice terminating the placement) was private in nature under section 6(5).

Court’s reasoning. The House split. The majority (three members) concluded that Southern Cross was not carrying out functions of a public nature. Their reasoning emphasised the contractual, private-law basis of the provider’s activities, the absence of statutory powers or democratic accountability vested in the provider, the commercial character of the services, and the fact that public funding in these arrangements was a payment for services rather than a public subsidy of the provider’s functions. They considered existing statutory regulation and contractual incorporation of Convention-compatible obligations to be adequate and emphasised the distinction between arranging/procuring services (a public authority function) and the private provision of services under contract.

By contrast, the minority (two members) concluded that a care home providing accommodation and care pursuant to arrangements under sections 21 and 26 of the 1948 Act was performing a function of a public nature. Their reasoning relied on the state’s long‑standing responsibility to ensure such care, the statutory framework requiring local authorities to secure provision, the extensive regulation and inspection of care homes, the fact that many residents are accommodated at public expense, and the risk to Convention rights if private providers were outside section 6(3)(b). The minority regarded the performance of accommodation plus care for those who cannot otherwise obtain it, when arranged and paid for by the state, as falling squarely within section 6(3)(b).

Wider context. The House discussed Strasbourg jurisprudence on state responsibility for private bodies, the prominence of the factors listed above and precedent on the meaning of "public function" (notably Aston Cantlow). The practical and policy implications of construing section 6(3)(b) widely were explored, including the effects on contracting-out and on regulatory schemes.

This was an appeal on whether a private care-home operator providing accommodation and care under arrangements made by a local authority is a public authority under section 6(3)(b) HRA 1998. The House was divided. The majority concluded that the operator was not performing functions of a public nature and dismissed the appeal: they treated the provider's activities as contractual and private in source and character, without statutory powers, and exposed to detailed regulation but not thereby converted into governmental functions. The minority would have allowed the appeal, treating provision of residential care pursuant to sections 21 and 26 of the National Assistance Act 1948 as a public function because it was performed under statutory arrangements, in the public interest and often at public expense, with significant regulatory oversight.

Preliminary issue ordered in the Family Division of the High Court; decision for the respondents in the Family Division: [2006] EWHC 2681 (Fam). Court of Appeal affirmed: [2007] EWCA Civ 26; reported at [2007] 2 WLR 1097. Appeal to the House of Lords: [2007] UKHL 27 (this judgment).