Update: local government

RECENT CASE LAW has been dominated by a number of decisions on liability, which continues to demonstrate the difficult dividing line between local authorities' responsibilities in the wider sense and their legal liability.

Negligence liability for failing to rehouse

In a striking case, the court imposed a duty of care (and found it had been broken) in X & Y v Hounslow LBC [2008] EWHC 1168 (QB) where the local authority had failed to

rehouse vulnerable tenants affected by serious anti-social behaviour. The claimants, who suffered from learning difficulties, had been imprisoned in their council flat and repeatedly assaulted and abused over the course of a weekend.

The authority's own social workers, and a psychiatric nurse, had previously expressed concerns about the claimants' safety in the flat, but the housing department (having initially decided that the claimants were not eligible for rehousing) did not act on its recommendation to rehouse. A social worker then became aware that the circumstances were becoming more serious because of teenagers gathering at the flat, allegedly having keys to it and storing stolen goods there, together with X's arrest in respect of the goods, a serious on assault on him and threats to burn the flat down. Despite requests by the social worker for rehousing, and complaints from other tenants, an emergency transfer procedure was not invoked and the claimants were attacked in their home by local youths.

The authority were held liable in negligence. The court concluded that events had gathered pace to the extent that there was not merely a general risk of ill-defined harm but that it was reasonably foreseeable that there would be harm of the kind that actually occurred. The authority's relationship with the claimants was also sufficiently proximate, as the authority were both landlord and provider of social services. Furthermore, it was fair, just and reasonable to impose a duty of care to move the claimants out of the flat in response to the unusual but dangerous situation which had developed, and the authority should have invoked the emergency procedure. The court declined to hold that there were policy reasons for excluding a duty of care on the particular facts of the present case, distinguishing the House of Lords' decision in O'Rourke v Camden LBC [1998] AC 188 where a claim in respect of alleged failure to assist a homeless man had been rejected. Here, the authority's failure to invoke its own emergency procedure had been a breach of the duty of care.

If the decision stands, it will come as a fresh warning to authorities that they cannot sit by with legal impunity when threatening situations develop, particularly where these involve highly vulnerable people.

No duty of care for failing to provide equipment

In contrast, in Sandford v Waltham Forest LBC [2008] EWHC 1106 (QB) the court refused to impose a duty of care requiring the authority to have installed equipment to prevent an elderly, infirm and almost blind woman (L, who had later died) from falling out of bed in her home. The authority had owed L the statutory duty to assess her needs under s 29 National Assistance Act 1948 and to make provision for her under s 2 Chronically Sick and Disabled Persons Act 1970, but the court followed and applied previous case that breach of these duties in itself did not give rise to any private law cause of action (see Wyatt v Hillingdon LBC (1978) 76 LGR 727, CA, X (minors) v Bedfordshire CC [1995] 2 AC 633, HL and O'Rourke (above)). Furthermore, following the House of Lords' decision in Gorringe v Calderdale MBC [2004] UKHL 15, [2004] 1 WLR 1057, the court held, where there had been no voluntary assumption of responsibility through the mere undertaking of the statutory duty, it would be inconsistent to hold that there was no private law cause of action for breach of the relevant statutory duties but to impose a common law duty of care.

The dividing line between Sandford and X & Y (above) is not easy to identify, except by reference to a qualitative conclusion that the particular relationship between the parties in the latter case had become significantly closer and appreciably more urgent. The relativistic and judgmental nature of such distinctions, however, is inevitably inexact, making operational decisions difficult for authorities.

No strict liability for wheelchair ramp

In Smith v Northamptonshire County Council [2008] EWCA Civ 181, the claimant injured herself on a wooden wheelchair ramp when the edge of it crumbled away underneath her without warning. The claimant was employed by the local social services authority as a carer/driver, and the accident happened as she was collecting a Mrs Cotter to take her to a day centre. The ramp had been installed at Mrs Cotter's home some years before by the NHS and had been inspected by the authority, but there had been no sign of disrepair.

The Court of Appeal rejected the imposition of strict liability on the authority under the Provision and Use of Work Equipment Regulations (SI 1998/2306), thereby reversing the decision of the judge at first instance who had found the ramp was work equipment. The judge's application of the regulations in this case potentially represented a significant extension of an employer's liability.

The court found that, in the absence of clear language, the regulations had not intended to impose such liability. It pointed particularly to the lack of control which the authority had in respect of the ramp, which was not their property and in respect of which they had no underlying relationship which contemplated any responsibility for its construction or maintenance.

Personal injury recoverable in public nuisance

The Court of Appeal rejected the authority's entreaty, in Corby Group Litigation v Corby BC [2008] EWCA Civ 463, to exclude damages claims for personal injury from the scope of the tort of public nuisance. The essence of the tort is protection from an unlawful act or omission endangering the life and health of the public. The claims arose from the authority's development programme for contaminated land in their area, in consequence of which it was alleged that that the claimants' mothers had been exposed to toxic materials during pregnancy, causing upper limb deformities suffered by the claimants. One of the heads of claim was in public nuisance, which the authority applied to have struck out on the grounds that the House of Lords' decisions in Hunter v Canary Wharf Ltd [1997] AC 655 and Transco plc v Stockport MBC [2003] UKHL 61, [2004] 2 AC 1 had held that damages for personal injury were not recoverable for that tort.

The court held that the observations relied on by the authority in the speeches in Hunter and Transco were obiter (because neither case had been concerned with either public nuisance or damages for personal injury) and that in any event they did not clearly support the argument being advanced. There was clear existing authority for awarding such damages in public nuisance, though the law might be changed by the House of Lords.

Qualified privilege and personnel records

In W v JH and X County Council [2008] EWHC 399 (QB), the court declined to grant summary judgment to the defendants on the grounds of qualified privilege in a defamation claim. The claimant had formerly been employed as a social worker by the authority, but was disciplined for sexual harassment and given a final written warning which was to remain on his personnel file for 18 months.

Subsequently, he was made redundant, and for several years was employed by a university. Another employee of the university, JH, had also been employed by the authority at the time of the claimant's earlier disciplinary proceedings, and when the university had decided to employ the claimant as an assessor she orally informed it that he had left the authority's employment in a hurry before the disciplinary hearing. The university then withdrew its request for the claimant to act as one of its assessors. The claimant sued JH and the authority.

The court held that the defence of qualified privilege raised matters which could not be resolved summarily. The authority's assurance that the information would remain on the personnel file for only 18 months gave rise to a real prospect of success in the claimant's argument that the authority no longer had a duty or interest in the communication of the disciplinary proceedings after the lapse of time which had occurred here. The decision comes as a warning against the dangers of careless talk in the workplace.

Insurance powers and procurement

The arrangement of insurance was the apparently unexciting but important context for the court's consideration of first principles affecting authorities' general powers and the operation of domestic procurement law in R (Risk Management Partners Ltd) v Brent LBC [2008] EWHC 692 (Admin).

The claimant company brought judicial review proceedings in respect of the participation of Brent and a number of other London authorities in a mutual insurance company (L), Brent having approved a financial guarantee for L. Because there was uncertainty whether L would be able to provide cover from the expiry of Brent's current insurance, however, the authority had also issued tender invitations under the Public Contracts Regulations 2006 (SI 2006/5) in seven lots. The claimant had submitted a tender, but the tendering procedure was abandoned when Brent decided to award six of the lots to L, which had not taken part in the procurement exercise.

The claimant alleged that Brent had acted ultra vires. The court held that while, for the purposes of s 111(1) Local Government Act 1972, the obtaining of insurance was clearly incidental to Brent's functions, the provision of insurance to others was not, and Brent's participation in L was beyond the s 111 power. In that respect, applying McCarthy & Stone (Developments) Ltd v Richmond upon Thames LBC [1992] 2 AC 48, HL, and Credit Suisse v Allerdale BC [1997] QB 306, CA, participation in L was at best itself incidental to the incidental power to obtain insurance, and Brent could not provide financial assistance for L to do what Brent themselves could not. Nor was a contract of insurance a contract for the provision of assets or services within s 1 Local Government (Contracts) Act 1997, because it was for the contingent provision of a financial indemnity.

Brent relied alternatively on the well-being power in s 2 Local Government Act 2000, but the court, distinguishing between the financial well-being of the authority and the well-being of its area, held that the evidence in this case did not establish that Brent ever considered that participation in L was likely to achieve the promotion or improvement of well-being of their area. The court recognised, however, that s 2 could in principle authorise entering into a contract with a mutual insurance company and the provision of guarantees and financial assistance to it.

In a separate action, the claimant alleged that Brent had breached the Procurement Regulations. The principal issue which arose was whether the award of a contract to L, being a company in which Brent themselves participated, was outside the scope of the regulations by reason of the exclusion established in European procurement law in Teckal Srl v Comune di Viano (Reggio Emilia) Case C107/98 [1999] ECR I-8121, ECJ, that is where the public authority exercised a level of control over the contractor similar to that exercised over one of the authority's own departments. With hesitation, the court held ([2008] EWHC 1094 (Admin)) that the exclusion also applied in domestic law to the regime imposed by the regulations, but Brent had failed in the present case to satisfy the strict test for establishing the operation of the Teckal test because a private company was employed to manage L and the contractual provisions demonstrated that L had a degree of independence inconsistent with the degree of control required.