The House of Lords has ruled against extending the reach of the Human Rights Act 1998 to many private providers of 'outsourced' public services. In doing so, it has thrown this vexed issue back to politicians to resolve.
The case of YL (YL v. Birmingham City Council  UKHL 27) (decided by the House of Lords on 20 June 2007 provides the House of Lords with their first opportunity to provide definitive guidance on the application of section 6(3)(b) of the Human Rights Act 1998 in the contracting-out context.
The 1998 Act confers a range of protections against the infringement of so-called 'Convention rights' by a group of entities known under the Act as "public authorities". The identity of such authorities is relatively clear as regards 'core' public authorities (such as central and local government, the armed forces etc). However, there remains significant uncertainty as regards other bodies, referred to as 'hybrid' or 'functional' public authorities, which are described by section 6(3)(b) of the Act as, "any person certain of whose functions are functions of a public nature".
This uncertainty has been particularly acute in the context of housing and social care, particularly where local authorities have sought to 'contract-out' the provision of these sensitive services to private companies. Users of such services are naturally concerned that such transactions may undermine the rights and protections they would otherwise enjoy (against the 'contracting-out' body) under the Act.
In YL the resident of a private care home sought relief under Article 8 ECHR against the home in respect of certain aspects of her treatment. Mrs YL's place at the home was funded by Birmingham City Council in accordance with the National Assistance Act 1948, which requires local authorities to make arrangements for the provision of care home services to those unable to pay for such services themselves. Her case depended on the assertion that the care home, in so far as it was providing services to her as part of arrangements made by the Council under the 1948 Act, was a public authority under section 6(3)(b) of the Act.
In making such an assertion, Mrs YL was challenging the Court of Appeal's previous ruling in Leonard Cheshire (R. (on the application of Heather) v Leonard Cheshire Foundation  EWCA Civ 366) which had held, in similar circumstances, that a private care home without statutory powers which did not 'stand in the shoes' of the relevant local authority under the 1948 Act could not be said to be exercising 'public functions' within the meaning of section 6(3)(b). The basis for this challenge was the House of Lords decision in Aston Cantlow (Aston Cantlow and Wilmcote with Billesley Parochial Church Council v Wallbank  UKHL 37) which, according to Mrs YL, had implicitly overruled the approach taken in Leonard Cheshire.
The Court of Appeal was not prepared to hold that Aston Cantlow had overruled Leonard Cheshire and rejected the appeal. The House of Lords agreed to hear YL's further appeal.
The House of Lords ruling
The five Law Lords who heard the appeal (Lords Bingham, Scott, Mance, Neuberger and Baroness Hale) did not agree on the outcome of the case, with a minority (Lord Bingham and Baroness Hale) voting to allow the appeal (and overrule Leonard Cheshire in the process), but a majority (Lords Scott, Mance and Neuberger) refusing to do so.
The position of the minority is well summarised in the following passage from the opinion of Lord Bingham:-
"When the 1998 Act was passed, it was very well known that a number of functions formerly carried out by public authorities were now carried out by private bodies. Section 6(3)(b) of the 1998 Act was clearly drafted with this well-known fact in mind. The performance by private body A by arrangement with public body B, and perhaps at the expense of B, of what would undoubtedly be a public function if carried out by B is, in my opinion, precisely the case which section 6(3)(b) was intended to embrace. It is, in my opinion, this case".
This approach to the application of section 6(3)(b) is echoed in the opinion of Baroness Hale, e.g., where she states, "While there cannot be a single litmus test of what is a function of a public nature, the underlying rationale must be that it is a task for which the public, in the shape of the state, have assumed responsibility, at public expense if need be, and in the public interest". Baroness Hale also emphasised the importance, from her perspective, of the 'front line' nature of the (publicly funded) service being provided by a care home: "Not everything for which the state pays is a public function. The supply of goods and ancillary services such as laundry to a care home may well not be a public function. But providing a service to individual members of the public at public expense is different. These are people for whom the public have assumed responsibility" (emphasis added).
By contrast, the majority in the Lords were unwilling to go as far as the minority in the application of section 6(3)(b). Their position is captured in the following passages from the opinions of Lords Scott and Mance:-
"If an outside private contractor is engaged on ordinary commercial terms to provide the cleaning services, or the catering and cooking services, or any other essential services at a local authority owned care home, it seems to me absurd to suggest that the private contractor, in earning its commercial fee for its business services, is publicly funded or is carrying on a function of a public nature. It is simply carrying on its private business with a customer who happens to be a public authority. The owner of a private care home taking local authority funded residents is in no different position. It is simply providing a service or services for which it charges a commercial fee".
"In providing care and accommodation, Southern Cross acts as a private, profit earning company. It is subject to close statutory regulation in the public interest. But so are many private occupations and businesses, with operations which may impact on members of the public in matters as diverse for example as life, health, privacy or financial well being. Regulation by the State is no real pointer towards the person regulated being a state or governmental body or a person with a function of a public nature, if anything perhaps even the contrary. The private and commercial motivation behind Southern Cross's operations does in contrast point against treating Southern Cross as a person with a function of a public nature".
Irrespective, then, of the clear interest of the state in providing a 'public service' such as care home facilities to the most vulnerable members of the community, as evidenced by its willingness to fund the provision of such facilities, the majority in the House of Lords was not prepared to categorise the private providers of such facilities as a public authorities for the purpose of section 6(3)(b).
Many groups will be disappointed by the House of Lords ruling in this case, since it effectively shuts the door on recent attempts to plug a perceived gap in the UK's human rights framework. Recipients of many 'outsourced' public services, such as Mrs YL, will have to rely on their private law rights vis a vis relevant providers (or on the residual public law duties of the 'commissioning' public authorities) to defend their interests, rather than being able to rely directly on the Human Rights Act against the providers themselves.
Whether that 'fall-back' position is a robust or acceptable one is a matter which will continue to excite considerable debate. Parliament may now have to decide whether to extend the reach of section 6(3)(b) – the House of Lords has made such a decision difficult to avoid.