YL (by her litigation friend the Official Solicitor) (FC) (Appellant) v. Birmingham City Council and others (Respondents)

A commercial care-home provider does not perform functions of a public nature under section 6(3)(b) of the Human Rights Act 1998 merely because a local authority arranged and paid for a resident’s care under the National Assistance Act 1948. The function must be assessed in its statutory and institutional context. Public regulation, public benefit, vulnerability of service users and payment from public funds are relevant but do not determine the question.

The local authority’s duty was to arrange care, not to provide it. The private provider received commercial fees, acted under private-law contracts, exercised no delegated statutory powers and remained institutionally independent. Contracting with a public authority therefore did not convert its provision of care and accommodation into a public function.

The appellant was an elderly woman with Alzheimer’s disease who lived in a privately owned nursing home operated by Southern Cross Healthcare Ltd. Birmingham City Council had arranged her placement under sections 21 and 26 of the National Assistance Act 1948 and paid most of the fees. Following a dispute involving her relatives, the company gave notice requiring her removal. She contended that the notice interfered with article 8 rights and that the company was a public authority under section 6 of the Human Rights Act 1998.

Ryder J directed trial of the public-authority question as a preliminary issue. Bennett J decided it against the appellant in [2006] EWHC 2681 (Fam). The Court of Appeal dismissed her appeal in [2007] EWCA Civ 26; [2007] 2 WLR 1097, following R (Heather) v Leonard Cheshire Foundation. The central issue was whether a commercial care home, when providing publicly arranged and funded care, performed functions of a public nature under section 6(3)(b).

1. Disposition. The House dismissed the appeal by a majority of three to two. Lord Scott of Foscote, Lord Mance and Lord Neuberger of Abbotsbury formed the majority. Lord Bingham of Cornhill and Baroness Hale of Richmond dissented.

2. The majority’s controlling reasoning. Lord Mance’s reasons were expressly accepted by Lord Scott and Lord Neuberger. The nature of a function under section 6(3)(b) of the Human Rights Act 1998 must be assessed in its statutory and institutional context. A connection with a public authority, public payment, extensive regulation, public benefit and the vulnerability of service users are relevant considerations. None makes a function public by itself. Particular weight may attach to whether the provider exercises governmental or delegated statutory powers, receives institutional public funding, acts for public rather than commercial purposes, or derives its obligations from public law.

3. Under sections 21 and 26 of the National Assistance Act 1948, the council’s duty was to make arrangements for care and accommodation. That duty remained with the council and was satisfied by contracting with a private provider. Southern Cross was not delegated the council’s statutory duty or any coercive power. It provided the same services commercially under private-law contracts and received payment for particular residents rather than a public subsidy for its undertaking. The council remained responsible for assessing need and remained amenable to Convention claims.

4. Contracting out does not automatically transfer a public authority’s status to its contractor. The fact that a core public authority could perform an activity itself is relevant but insufficient. The majority accordingly held that Southern Cross was not performing a function of a public nature when providing the appellant’s care and accommodation.

5. Lord Scott’s additional ground. Lord Scott considered that the termination notice was, in any event, a private act under section 6(5), because it was served under a private contractual provision and affected only the contracting parties. That additional ground did not form the common basis of the majority decision.

6. Dissent. Lord Bingham and Baroness Hale would have allowed the appeal. They considered that the state had assumed ultimate responsibility for meeting the care needs of vulnerable persons under statutory arrangements and at public expense. Detailed regulation, public funding, the public interest, possible coercive powers and the risk of Convention violations together made the provision of the appellant’s care a public function. The House did not determine whether the appellant’s article 8 rights had actually been infringed.

1. House of Lords: By a majority of three to two, dismissed the appeal in [2007] UKHL 27 and upheld the conclusion that the private care-home provider was not performing a function of a public nature.
2. Court of Appeal: Dismissed the appeal in [2007] EWCA Civ 26 ; [2007] 2 WLR 1097 , following R (Heather) v Leonard Cheshire Foundation, but granted leave to appeal because of the issue’s importance.
3. High Court, Family Division: Bennett J decided the preliminary issue against the appellant in [2006] EWHC 2681 (Fam), following an order by Ryder J that the issue be tried separately.