"Functions of a public nature" under the Human Rights Act 1998: the decision of the House of Lords in YL v Birmingham City Council

John McGarry

Senior Lecturer in Law
Department of Law and Criminology,
Edge Hill University,
Ormskirk.

[email protected]

Copyright © 2007 John McGarry
First published in Web Journal of Current Legal Issues

I would like to thank Clare Kinsella for comments on an earlier draft of this case note; any errors remain my own.

Summary

In YL v Birmingham City Council [2007] UKHL 27, the House of Lords decided that a private body providing publicly funded residential care is not engaged in “functions of a public nature” under the Human Rights Act 1998 (HRA), s 6(3)(b). The significance of this issue is that it determines whether those providing such care must conform with the Convention rights under the Act. It is a matter that has been the subject of some controversy in recent years.

In this case note, I will describe the facts of YL. I will then give details of the previous case law and commentary this point. This will be followed by an analysis of their Lordship’s opinions in the present case. Finally, I will briefly discuss the possibility of amending the HRA.

Contents

Facts
Past Decisions
YL – The Decision
Possible Amendment
Conclusion

Facts

YL suffers from Alzheimer’s disease. Birmingham CC has a statutory duty, under the National Assistance Act 1948, to make arrangements for the provision of her care and accommodation. In fulfilment of this duty, the Council contracted with Southern Cross Healthcare Ltd, a private business, to provide residential care in a home which is owned and operated by the latter. The fees for this service are paid by the Council, by the local NHS Primary Care Trust, and by YL’s daughter.

After a breakdown in the relationship between Southern Cross’ staff and YL’s family, the company served the daughter with 28 days’ notice terminating YL’s right to remain in the care home. YL challenged this as a breach of her right to a family life under article 8 of the European Convention on Human Rights and Fundamental Freedoms (ECHR). The question of whether YL could claim the protection of article 8 against Southern Cross turned on whether the company can be said to be exercising a function of a public nature when providing publicly funded residential care. This point was tried as a preliminary issue.

Section 6(1) of the HRA makes it unlawful for a public authority to act in a way which is incompatible with the Convention rights. The Act does not comprehensively define what amounts to a public authority though s 6(3)(b) states that it includes, “any person certain of whose functions are functions of a public nature”. This is qualified by s 6(5): “In relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private”. This means that there are two types of public authority under the Act. The first are “core” public authorities who must act in conformity with the Convention rights in all that they do. Examples of these include government departments, local authorities, and the police. The second are “hybrid” (or “functional”) public authorities who must conform with the Convention rights only when performing a function of a public nature.

The judgment at first instance and in the Court of Appeal was that Southern Cross was not performing a function of a public nature. This has now been affirmed by a 3-2 majority in the House of Lords.

Past Decisions

Before analysing the opinions given in YL, it will be illustrative to examine the previous case law on this issue. This has been governed, in the main, by two decisions of the Court of Appeal: Poplar Housing and Regeneration Community Association Ltd v Donoghue [2001] EWCA Civ 595, [2002] QB 48 and R (Heather) v Leonard Cheshire Foundation [2002] EWCA Civ 366, [2002] 2 All ER 936.

The first of these concerned the provision of accommodation for Donoghue who was homeless. The local authority – Tower Hamlets – has a duty, under the Housing Act 1996, to secure accommodation for the homeless but not for those who are intentionally homeless. The authority provided Donoghue with accommodation in Council property pending a decision as to whether she was intentionally homeless. It then transferred a proportion of its housing stock – including the property in which Donoghue had been housed – to the Poplar Housing and Regeneration Community Association Ltd. After a finding that Donoghue was intentionally homeless, the Association sought possession of the property. Donoghue challenged this as a breach of her right to a private and family life under article 8 of the ECHR. The issue, as in the present case, was whether the Association could be said to be performing ‘functions of a public nature’ when providing such accommodation.

The Court of Appeal decided that the Association was engaged in a function of a public nature. However, the Court also held that, in this instance, seeking possession of the property in question did not amount to a breach of Donoghue’s rights under article 8.

Two factors appeared to be particularly relevant for the Court in reaching its judgment that the Association was a public authority under the HRA, s 6(3)(b). First, at the time of the transfer of property to the Association, Donoghue was a tenant of Tower Hamlets and, “it was intended that she would be treated no better and no worse than if she remained a tenant of Tower Hamlets” (Lord Woolf, p 70). Secondly, the Court noted that the Association had been established by Tower Hamlets; that five members of its board were also members of the authority; and that it was subject to the authority’s control in the manner with which it dealt with its tenants. This created a close relationship between the authority and the Association which was indicative that the activities of the latter amounted to public functions (pp 69-70).

The facts of R (Heather) v Leonard Cheshire Foundation are, to all intents and purposes, indistinguishable from those of YL v Birmingham CC. Heather was provided with residential care by the Foundation – a charitable organisation. This care was provided under a contract with Surrey County Council pursuant to a duty under the National Assistance Act 1948 to arrange for its provision. The Foundation made a decision to close the care home where the claimant was housed. Heather challenged this as a breach article 8 of the ECHR. Again, the issue before the court was whether the Foundation was exercising functions of a public nature when providing the care. The Court of Appeal determined that it was not. Lord Woolf commented:

The Court distinguished this case from Donoghue on the ground that there was not a close relationship between the Foundation and Surrey CC as there had been between Tower Hamlets and the Housing Association.

The Court of Appeal’s decisions in Donoghue and Heather have been the subject of strong criticism. Craig has captured the sentiment of many, writing that the Court’s approach is “counter intuitive” and that,

The decisions have also been criticised for applying the wrong test. The Joint Committee on Human Rights (JCHR) – which has produced two reports on this issue – argues that, in taking account of the proximity of the private body to an institution of the State, the Court has rejected a functional test in favour of an institutional test (Seventh Report 2004, paras 29, 39; Ninth Report 2007, para 22). That is, rather than assess whether the activity engaged in amounted to a public function, the Court made an evaluation of the nature of the body undertaking it. This is an objection echoed by Baroness Hale and Lord Mance in YL (at [61] and [105] respectively).

There is also criticism that the restrictive interpretation of s 6(3)(b) adopted by the Court is contrary to the intention of Parliament (Seventh Report 2004, para 74; Ninth Report 2007, paras 11, 60, 76). Indeed, a more expansive approach is recommended by Lord Nicholls in Aston Cantlow and Wilmcote with Billesley Parochial Church Council v Wallbank [2003] UKHL 37; [2004] 1 AC 546. He suggests that the courts should give “a generously wide scope to the expression ‘public function’” (at [11]).⁽¹⁾

However, not all commentators have been critical of this restrictive approach. Oliver contends that functions should not be considered to be public simply because they are carried out in the performance of a public duty or are normally undertaken by a public body (2004, pp 336, 337-338). Rather, private bodies should only be considered to be exercising “functions of a public nature” when undertaking activities which involve, “specifically legally authorised coercion or authority over others which it would normally be unlawful for the private body to exercise” (ibid, pp 330, 336-337, 338-339, 345).

YL – The Decision

It is against this background of criticism of, and support for, the judgments in Donoghue and Heather that the House of Lords considered the present case.

The majority opinions were given by Lord Scott, Lord Mance and Lord Neuberger. They held that Southern Cross is not a public authority under s 6(3)(b) when providing residential care for YL. Particularly relevant factors included the fact that Southern Cross is a business run for profit (at [26], [116]). Furthermore, it carries out its activities pursuant to contracts and these are, therefore, matters of private law rather than public functions (at [26], [120], [168]). Moreover, a finding that the company was a public authority when providing this care would mean that it would be obliged to conform to the Convention rights and this would, “fit … uneasily with the ordinary private law freedom to carry on operations under agreed contractual terms” (Lord Mance at [116]).

This did not, though, leave YL without any protection for her Convention rights. Birmingham CC, as the contracting local authority, has a continuing duty under the ECHR with respect to the arrangement and provision of YL’s care (at [114], [118], [149]). Lord Neuberger conceded that, “those rights could be of somewhat less value in practice than if they existed against [Southern Cross]” though he submits that any disadvantage is not “likely to be significant, let alone substantial” (at [149]). This continuing duty is reflected in the contract between the Council and Southern Cross which obliges the latter, its agents, officers and employees to act in a way which is compatible with the Convention rights at all times.⁽²⁾

Their Lordships also considered that the purpose of the HRA is to meet the United Kingdom’s obligations under the ECHR. Lord Mance states that, “section 6(3)(b) is intended to reflect in domestic law the scope of the State responsibility which the Convention addresses” (at [102]). Thus, for the provision of residential care by Southern Cross to amount to a public function, it would have to be an activity for which the UK would be responsible before the European Court of Human Rights (at [87], [157], [160], [161]).

The majority gave a number of other factors that would indicate that a function is one of a public nature. If an activity would be amenable to judicial review, then this would suggest that the body in question is a section 6(3)(b) public authority (at [87], [156]). The degree to which a function is publicly funded will also be relevant – though a function is not necessarily public because it is publicly paid for (at [103], [142], [148], [165]). Similarly, a function might be public if a core public authority could have undertaken it. Yet, this is indicative, “only to a limited extent” (Lord Neuberger at [144]). It is not necessarily the case that a function is public simply because a core public authority could have performed it (at [110]). Nevertheless, where a function is found to be public, its source will usually be statute or governmental (at [102]).

It appears to be common ground for both the majority and minority that if a body possesses coercive, disciplinary or regulatory powers then this is a strong indicator that it is a s (6)(3) public authority (at [28], [101], [121], [166]-[167]). This would apply, for instance, to a private security business contracted to operate a prison. It would also apply to bodies like the Panel on Take-overs and Mergers which undertakes a regulatory function in relation to City take-overs (at [101]).

The presence of such coercive powers provides the courts with a clear way to demarcate between functions that are, and those that are not, public. It is plain that the majority were concerned that, if they found Southern Cross to be a public authority under s 6(3)(b), they would not have such a clear demarcation. Their worry seems to be that there would be no means by which they could, in principle, differentiate between the activities of Southern Cross and other activities which – they obviously felt – should not be considered to be functions of a public nature. These included: a contractor providing lifeguard personnel at a municipal swimming pool (at [30]); nurses employed in Southern Cross’ care homes (ibid); and those contracted to clean council premises (at [82]).

These anxieties seem misplaced. First, we may question whether it is so undesirable that, for instance, a contractor providing lifeguard personnel at a municipal pool should be considered a public authority under s 6(3)(b) and therefore under a duty to ensure that it adopts appropriate procedures to protect, say, the privacy – or other Convention rights – of those using the pool.

Secondly, it is not necessarily the case that, if Southern Cross was found to be a public authority when providing care for YL, the nurses working in its homes would also be public authorities. It is worth reiterating here that, by virtue of s 6(3)(b), a body may be a public authority because it performs functions of a public nature but that, under s 6(5): “In relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private”. This distinction between public functions and private acts was explained by Lord Neuberger:

We therefore have a principle by which we can distinguish between a public authority and its employees. A function – such as providing residential care – may be public. Yet, the acts that comprise it, including the employment and duties of its staff, may be private.

Another concern expressed by the majority was that a decision that Southern Cross is a public authority when providing care for publicly funded residents would lead to discrimination between these residents and those that are privately funded. A portion Southern Cross’ care home clients pay privately for the whole of their care. It is common ground that the provision of this care is not a function of a public nature. Their Lordships were troubled by the possibility that, within the same facility, those whose care is paid for by the public purse would have the protection of the Convention rights whereas privately funded residents would not. Lord Mance illustrated the problem:

We may question this supposition. First, as we have seen, Southern Cross is contractually obliged to observe the Convention rights of publicly funded residents such as YL. This means that there is already discrimination between publicly and privately funded residents. Furthermore, it is debateable whether there would be a stark differentiation between residents within the same facility in the way that the majority seem to envisage. It may be that all the residents would benefit from a culture of rights protection which would become an integral part of the care practices of the home. Secondly, it is common ground that, where care is provided in a facility owned and operated by a Council, because it is a core public authority and obliged to conform to the Convention rights in all that it does, its residents will have the full protection of the Convention rights. The majority’s decision therefore means that publicly funded residents in a care home run by the local authority will have their Convention rights protected directly whereas those in a privately run home will not. Their Lordships are aware of this discrimination but consider it to be more palatable than the alternative (at [119], [169]). Yet this is surely an assumption that is open to challenge.

The minority opinions were given by Lord Bingham and Baroness Hale. Their determination that Southern Cross should be considered to be a public authority under s 6(3)(b) when providing publicly funded residential care is based on three contentions.

First, they consider that the degree to which the State has assumed responsibility for a function, and the public interest in having it undertaken, is highly indicative that it is of a public nature, as is the degree to which it is publicly funded (at [7], [10], [18], [65]-[66], [68]). In the present case, it has long been considered to be in the public interest that care is provided for those who are old or infirm and public money is made available for this (at [67]-[68]). It is, therefore, an activity for which, to a large extent, the State has assumed “ultimate responsibility” (Lord Bingham at [15]).

Secondly, both Lord Bingham and Baroness Hale are firmly of the view that YL’s situation is just the type that s 6(3)(b) was designed to cover (at [19]-[20], [73]). It is, therefore, commensurate with Parliament’s intention that Southern Cross should be held to be engaged in a function of a public nature.

Thirdly, Baroness Hale notes that the jurisprudence of the European Court of Human Rights makes it clear that the State will sometimes have a positive obligation to protect an individual’s Convention rights from infringement by others. Such positive obligations are highly likely to arise with regard to those articles of the Convention which may be invoked by care home residents (at [57]-[60]). She continues: “The most effective way for the United Kingdom to fulfil its positive obligations to protect individuals against violations of their rights is to give them a remedy against the violator” (at [60]).

Possible Amendment

It will have been noted that both the majority and the minority claim that their judgment in this case is consistent with the intention of Parliament. The former contend that the purpose of s 6(3)(b) is simply to reflect the extent of the UK’s liability under the ECHR. This, therefore, justifies the narrow interpretation that they have adopted. The latter submit that the provision was designed to cover a case just like the present and that Parliament intended that the HRA should apply in all areas where the State has assumed ultimate responsibility.

The idea that it is possible to divine the intention of the legislature is highly questionable. Yet, if we had to guess what Parliament’s rationale was in enacting the HRA – and s 6(3)(b) in particular – we would be forced to conclude that the weight of evidence lies with the minority and not the majority.

In the first place, the White Paper – Bringing Rights Home: The Human Rights Bill – which proceeded the HRA, and which presumably indicates the Government’s purpose in proposing it, reads: “The definition of what constitutes a public authority is in wide terms. Examples of persons or organisations whose acts or omissions it is intended should be able to be challenged include central government … and, to the extent that they are exercising public functions, companies responsible for areas of activity which were previously within the public sector, such as privatised utilities” (White Paper 1997, para 2.2). Furthermore, it would seem to be the Government’s continuing intention that YL, and those in a similar situation, should receive the direct protection of the Convention rights. This is evidenced by the fact that counsel for the Government argued for this very position in the present case.⁽³⁾ In addition, the JCHR, is clearly of the view that s 6(3)(b) should be interpreted more widely than the courts have done. Indeed, the two reports produced by the JCHR on this issue amount to a sustained criticism of the courts’ approach.

Given this, it may be that, after the decision in YL, the Government chooses to introduce legislation to amend the HRA. The JCHR has recommended such a course (Ninth Report 2007, para 132). Moreover, in January 2007, Andrew Dismore MP, the Chair of the JCHR, introduced his own Private Member’s Bill in the House of Commons: the Human Rights (Meaning of Public Authority) Bill. Clause 1 states:

This was blocked by the Government at Second Reading. The Parliamentary Under-Secretary of State for Justice, Vera Baird, when explaining why it was not being permitted to proceed to Committee Stage, said:

It may be, then, that we should look forward to a period of consultation followed by legislation amending the HRA.

Such an amendment would clarify the law. One of the main criticisms by the JCHR, and others, is that this area has been left in an uncertain state (Ninth Report 2007, paras 16, 67, 68, 69; McDermont 2003, p 122; Clayton 2004, p 617; 2007, p 14; Stone 2004, p 33; and Sunkin 2004, p 643). In addition, in the present case, Lord Neuberger states that s 6, “is not conspicuous for the clarity of its drafting” (at [130]). Mr Dismore’s Bill, or one like it, would remedy this. An amendment would also further the goal of giving wide effect to the HRA with the consequent advantage that a broad culture of rights will be created. Moreover, it would mean that, for YL, and others like her, whose care is – by chance – provided by private organisations in place of the State, the Convention rights really will be brought home.

Conclusion

The restrictive approach that has been adopted by the majority of the House of Lords in this case is not one that is necessitated by the HRA. There is now the distinct possibility that amending legislation will now be proposed by the Government.