R (Nash) v Barnet London Borough Council

The claimant, a Barnet resident, sought judicial review of (a) the Cabinet decision of 6 December 2012 to accept Capita as preferred bidder for a New Support and Customer Service Organisation (NSCSO) contract and (b) an impending Cabinet decision to award a Development and Regulatory Services (DRS) contract. The claimant advanced three principal grounds: failure to consult under section 3 of the Local Government Act 1999, breach of the public sector equality duty under section 149 of the Equality Act 2010, and breach of a fiduciary duty to council taxpayers. The court held that most of the claimant's arguments were time-barred under CPR 54.5 because the substantive decisions to commence procurement were taken in 2010/2011 and those decisions crystallised the relevant grounds. The court analysed the Burkett line of authority and distinguished preliminary or provisional decisions from substantive staged decision-making, concluding the 2010/2011 decisions were substantive.

On the merits, and insofar as the Equality Act claim was within time (challenge to the Equality Impact Assessment appended to the 6 December 2012 report), the court considered the EIA and concluded the council had had due regard to equality matters and that the EIA and contractual commitments addressed the principal concerns raised. The fiduciary duty claim was refused both as out of time and, on its merits, as not reaching the threshold of reckless disregard needed to establish such a breach. Permission to apply for judicial review was refused in respect of all grounds.

Background and parties: The claimant, Maria Stella Nash, challenged Barnet London Borough Council decisions to outsource a large range of functions: a New Support & Customer Service Organisation and a Development & Regulatory Services cluster. The interested parties were Capita Plc, Capita Symonds Ltd and EC Harris LLP. Proceedings were brought urgently and heard on a rolled-up basis.

Nature of the claim / relief sought: The claimant sought judicial review relief challenging the lawfulness of the Council’s decisions on three heads: (1) failure to comply with consultation obligations under section 3 of the Local Government Act 1999; (2) failure to have due regard to equality considerations under section 149 of the Equality Act 2010 (public sector equality duty); and (3) breach of a fiduciary duty to council taxpayers in proceeding without adequate financial/risk analysis. A fourth ground based on the Public Contracts Regulations 2006 was not pursued.

Procedural posture: This was a first-instance judicial review hearing in the Administrative Court (urgent rolled-up hearing). The council and claimant adduced multiple witness statements and documentary material. The interested parties did not participate.

Issues framed:

• Whether the council was obliged to consult specifically about the outsourcing proposals under section 3(2) LGA 1999, and if so when that duty first arose;
• Whether the council complied with the public sector equality duty in making its decisions, including the timing and content of Equality Impact Assessments;
• Whether the council breached any fiduciary duty in proceeding with the outsourcing without detailed risk/financial analysis;
• Whether the claims were brought promptly and within the three-month CPR 54.5 limitation period or, alternatively, whether relief should be refused for undue delay under section 31(6) Senior Courts Act 1981.

Court’s reasoning (concise): The court’s primary threshold determination was one of time. It analysed the meaning of "from the date when the grounds to make the claim first arose" in CPR 54.5 with reference to Burkett and related authorities. The judge accepted that where an earlier act is merely provisional or conditional, time may run from a later definitive act; but he distinguished that scenario from staged decision‑making where the earlier decision is substantive. The council’s 2010/2011 decisions to proceed with procurement and to adopt the "One Barnet"/Future Shape approach were treated as substantive decisions with immediate legal effect; therefore the claimant’s complaints about the failure to consult and the fiduciary duty argument crystallised at that earlier time and were out of time. The claimant’s alternative challenge to the Equality Impact Assessment annexed to the 6 December 2012 report was within time; on review the court found the EIA and the contractual commitments identified in the EIA meant the council had had due regard to equality obligations and permission was refused on the merits. The court also observed that, even if the consultation challenge were timeous, section 31(6) considerations might weigh against relief due to the prejudice and disruption that allowing a late challenge would cause.

Subsidiary findings and context: The court held that section 3(2) LGA 1999 requires consultation that is capable of informing decisions about outsourcing itself (not merely general budget-priority consultations). It emphasised the statutory discretion as to form and timing of consultation but rejected the proposition that general budget consultations alone satisfied the duty where specific outsourcing proposals were not the subject of consultation. The court declined to quash or to extend time, refused permission for judicial review in all respects and briefly addressed the confidentiality application which it rejected.

Permission to apply for judicial review was refused and the claim was dismissed. The court held that most of the claimant’s grounds crystallised on substantive Council decisions taken in 2010/2011 and were therefore out of time under CPR 54.5; the alternative challenge to the Equality Impact Assessment was in time but was rejected on the merits because the EIA and the contractual commitments were held to show that the council had had due regard to equality duties. The fiduciary duty claim was both out of time and, on the merits, insufficiently pleaded to show the requisite reckless disregard.