UK: Who Must Comply with the Human Rights Act?

Section 6(1) of the Human Rights Act 1998 (HRA) provides that it is unlawful for a "public authority" to act in a way which is incompatible with the rights guaranteed by the European Convention on Human Rights. It is therefore important to know which bodies will be regarded as "public authorities" for the purposes of the HRA. This question is particularly acute in situations where local authorities and government departments "contract out" functions to the private or charitable sector and in relation to privatised utility companies.

There is no definition of a public authority in the HRA. Section 6(3)(b) states that public authorities include any person "certain of whose functions are public or of a public nature," but section 6(5) makes clear that such a person should not be treated as a public authority when performing acts "of a private nature". In other words, certain "hybrid" bodies will be public authorities when performing "public functions" but private bodies when carrying out private activities. In the Parliamentary debates on the HRA, the Government gave as examples Railtrack (a public authority when carrying out its statutory functions relating to safety, but not when acting as a property developer), general practitioners (exercising public functions when working for the NHS but not in relation to private patients), and private security companies (exercising public functions when running contracted-out prisons but acting privately when guarding commercial premises).

The question of which functions are public and which are private has received consideration in three recent casesconcerning the provision of accommodation under contracted-out arrangements.

In R (Heather) v. Leonard Cheshire Foundation (unreported, 22 March 2002), various local authorities were under a statutory duty to provide accommodation for people in the position of the Claimants. They also had a statutory power to provide that accommodation through arrangements with voluntary organisations, and they made arrangements to fund the Leonard Cheshire Foundation to provide accommodation for the Claimants. The Foundation subsequently decided to close the home at which the Claimants were residents, and to move them to alternative accommodation. The Claimants sought to challenge the Foundation’s decision under the HRA, arguing that it violated their right to a home and family life under Article 8 of the Convention.

The crucial question in the case was whether the Foundation could be regarded as a public authority in providing accommodation for the Claimants. The Court of Appeal concluded that the role performed by the Foundation manifestly did not involve public functions, since:

• although the public funding of the services provided by the Foundation was a relevant consideration, it was not decisive. There was no material distinction between the services provided to residents funded by the local authorities and residents funded privately;

• there was no "public flavour" to the Foundation or its functions, and it could not be said that the Foundation was standing in the shoes of the local authorities. The legislation conferred powers on the local authorities alone, and the arrangements with the Foundation did not transfer any statutory functions to the Foundation; and

• the fact that the Claimants would not be able to rely on the Convention against the Foundation if it were not a public authority did not provide a reason for classifying its functions as public rather than private.

The most significant factor in this case seems to have been the fact that the statutory duty under the relevant legislation remained at all times with the local authorities. The local authorities retained an obligation to respect Article 8 of the Convention (but it was accepted that no claim could be brought against the authorities in respect of the Foundation’s decision to move the Claimants). However, since the Foundation was not exercising public functions, the Claimants’ application for judicial review under the HRA was dismissed.

The Heather decision may be contrasted with the Court’s earlier judgment in Poplar Housing and Regeneration Community Association Limited v. Donoghue [2002] QB 48. The Defendant in that case had been a local authority tenant. Her home was transferred to a housing association which had been set up by the authority to take over its housing stock, with central government funding for housing improvements. The local authority had previously determined that the Defendant had been intentionally homeless, and the association issued a summons for possession of the property. The Defendant sought to rely on Article 8 of the Convention against the association.

The Court of Appeal held that, for the purposes of the HRA, housing associations were not "standard" public authorities, regarded as public authorities for all purposes. The fact that the association was a charity motivated by the public interest did not point towards it being a public authority. However, if a particular function performed by the association was public in nature, it would be a "hybrid" or "functional" public authority in performing that function.

The Court noted that the council did not transfer its primary public duties to the association, and that providing accommodation was not, without more, a public function. However, an act which would otherwise be private could become public if it had features which imposed a "public stamp" on it. In this case, the "public stamp" was provided by the very close relationship between the local authority and the association: the authority had established the association, they had several board members in common, and the association was subject to the authority’s guidance as to how it treated the Defendant. Furthermore, at the time of the transfer it was intended that the Defendant should be treated no better or worse than if she remained a local authority tenant. The Court therefore came to the conclusion that, having taken on the local authority’s housing stock, the housing association stood in relation to the Defendant "in very much the position previously occupied by [the authority]". The role of the association was so "closely assimilated" to that of the council that it should be regarded as a functional public authority for the purposes of the HRA in this case.

The third case in the recent trilogy is R (A) v. Partnerships in Care Limited (Keith J, unreported, 11 April 2002). The Claimant suffered from a severe personality disorder and was detained under the Mental Health Act. The health authority had a statutory power to enter into contracts for private hospitals to provide treatment for people with mental disorders, and the Claimant was therefore detained at a private psychiatric hospital operated by the Defendants. The hospital was registered as a mental nursing home, which meant that its managers came under a statutory duty to provide adequate staff and treatment facilities. The managers subsequently decided to stop treating patients with personality disorders, and the Claimant applied for judicial review, alleging violations of her rights under the Convention.

Keith J accepted that the hospital might not have become so closely "enmeshed" in the activities of the health authority that it assumed any of the authority’s obligations (as in Donoghue). However, he held that the statutory duty to provide adequate facilities imposed a free-standing obligation on the hospital and meant that its decision to change the focus of the Claimant’s ward was a decision of a public nature.

The judge held that the nature of the functions performed by the hospital would also make it a functional public authority in this case. Drawing an analogy with private prisons, he considered it significant that patients such as the Claimant were admitted under compulsion in order to receive treatment which could enable them to live in the community again. There was a public interest in the hospital’s decision because failure to provide the treatment which psychiatrists had deemed necessary could prolong patients’ detention.

These are clearly important decisions on the principles which apply where public services are contracted out. In both Heather and Donoghue, the Court of Appeal accepted that the definition of a public authority for the HRA was not clear but should be given a "generous interpretation". However, it also held that merely performing an activity which would otherwise be carried out by a standard public authority was not enough to make a private body public, even though those activities would constitute public functions if carried out by a standard public authority. Otherwise, any private company providing services for a public authority (such as a hotel providing temporary accommodation for a housing authority, or a private

company processing blood samples for an NHS hospital) might be said to perform a public function. This, according to the Court, was not the intention of the HRA. Similarly, the Court in Heather held that the degree of public funding would not be decisive as to whether a body performed a public function.

The question of whether public functions are being exercised clearly depends on all of the circumstances of the case. The recent cases provide some indication of the factors which will determine whether a body which provides services for a public authority is performing acts of a public nature. They suggest three possible criteria:

• Public nature of the activity. Heather and Partnerships in Care indicate that it will be necessary to consider the nature of the activity being performed, including whether there is a public interest in the proper performance of the activity.

• Close control by a public authority. In Donoghue the Court of Appeal held that acts are more likely to be public if they are "enmeshed in the activities of a public body", but not merely because they are supervised by a public sector regulator.

• Statutory underpinning. Heather and Partnerships in Care indicate that statutory authority for what is done will be very significant. If statutory powers or duties either apply to a contractor directly or have been transferred to it from a public authority, the contractor is highly likely to be regarded as performing public functions in exercising those powers or duties.

It seems from the recent decisions that it will not always be necessary to satisfy allthree tests, but it is not yet clear whether satisfying just one of them is sufficient. Nor can it be expected that these criteria will always provide clearly answers. Of the three possible indicators that a body is a public authority, the existence of statutory powers or duties would seem to be the clearest and most easily applied. The Court of Appeal also attached weight to this factor in Aston Cantlow and Wilmcote with Billesley Parochial Church Council v. Wallbank [2002] Ch 51. It held that a Parochial Church Council was a public authority "in the sense that it is created and empowered by law; that it forms part of the church by law established; and that its functions include the enforcement through the courts of a common law liability to maintain its chancels resting upon persons who need not be members of the church". In reaching the conclusion that the Council was a public authority, the Court attached considerable importance to the fact that it possessed statutory powers which private individuals did not, in particular the power to issue notices requiring lay rectors to repair its church.

The meaning of the different criteria for identifying a "functional public authority," and the relationship between those criteria, are matters which will undoubtedly require further elaboration from the Courts. There are likely to be many contractors whose positions will have to be clarified, as the legislative provisions which allow public authorities to contract out their services are worded in a variety of ways. For example, under the Contracting Out (Functions relating to Social Security) Order 2000, local authorities may allow contractors to exercise their functions relating to the administration of claims for housing benefit and Council Tax benefit. Arguably, the contractors could be regarded as public authorities since they "exercise the functions" of the local authority and may deal with the public in its place, but the position is not entirely clear. Even more difficult questions are likely to arise in relation to contractors providing services under public-private partnerships.

Other cases should present fewer problems. For example, the operators of contracted-out prisons should be regarded as public authorities subject to the HRA on any of the three tests set out above. They have a range of statutory powers and duties by virtue of the Criminal Justice Act 1991 and the Prisons Act 1952; they appear to stand in the position which would otherwise be occupied by the Prison Service; and in Partnerships in Care Keith J held that "the nature of their functions" would probably bring their decisions within the ambit of public law.

In relation to privatised utility companies, there will generally be some statutory "underpinning" which is sufficient to indicate that the company will be regarded as a public authority, at least in exercising its statutory functions. Hence in Marcic v. Thames Water Utilities Limited [2001] 3 All ER 698, [2002] 2 All ER 55, where a claim was brought against a statutory water and sewerage undertaker in relation to the performance of its statutory duties to maintain sewers and provide effective drainage, the parties accepted that the Defendant was a public authority for the purposes of the HRA. We would expect that the exercise of statutory functions by bodies such as Railtrack would be treated in the same way.

The question of which bodies are "public" is not new to administrative law: it has frequently arisen where the Courts have been asked to decide which bodies are open to challenge by way of judicial review. The Courts have held that the availability of judicial review turns on whether there is a sufficient "public element", which may come from statutory authority or from the body in question being "woven into the system of governmental control".

In Aston Cantlow the Court of Appeal held that decisions on whether bodies are amenable to judicial review would "not necessarily be determinative" of whether they were public authorities for the purposes of the HRA. Indeed, it can be argued that the purposes of the judicial review procedure and of the HRA are somewhat different. Nevertheless, in Donoghue and Heather the Court of Appeal was heavily influenced by the approach in earlier judicial review cases, and in Partnerships in Care Keith J held that the issues in relation to judicial review and the HRA "stand or fall together".

However, the pre-HRA judicial review cases do not always offer clear guidance. The status of non-statutory regulatory bodies has caused particular difficulties. Whereas the Panel on Takeovers and Mergers, the financial services self-regulating organisations, the London Metal Exchange and the Advertising Standards Authority have all been held to be public bodies, the Courts have held that judicial review is not available against the insurance ombudsman, sporting regulators or the Society of Lloyd’s (at least in relation to most activities). The distinctions drawn in these cases are not always easy to apply, and difficult questions may arise as to whether the HRA imposes obligations on these bodies. However, in the recent case of Doll-Steinberg v. Society of Lloyd’s (unreported, 19 March 2002), Burnton J held that he was bound by earlier decisions that Lloyd’s was not amenable to judicial review in that case, and that it followed that Lloyd’s was not exercising public functions within the meaning of the HRA.

In some cases, it may be possible to point to another public authority which is obliged to comply with the HRA. Where services are contracted out, if the contractor is not exercising a public function, the reason will often be that legal responsibility has remained with the public authority which contracted out the service. In Heather the Court of Appeal held that, if the arrangement with the Foundation had been made after the HRA came into force, the Claimants might have been able to argue that the local authority should have imposed an obligation on the Foundation to protect their Convention rights. The Claimants could then have claimed under the contract, as persons for whose benefit the contract was made.

Furthermore, even if it is not possible to identify a public authority for the purposes of the HRA, private bodies may still be affected by the European Convention on Human Rights. The Courts are public authorities, and are therefore obliged to respect Convention rights even in cases involving private bodies and individuals. The HRA also requires the Courts to interpret legislation in accordance with the Convention wherever that is possible. For these reasons, the Convention may be relevant both to the substance of private law and to Court procedures.

© Herbert Smith 2002

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