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When is a private company a public authority? While it may not seem like much, this issue is an important one. ...
When is a private company a public authority? While it may not seem like much, this issue is an important one.

A private contractor regarded as carrying out public functions will be in the same legal position as any other statutory body. It will have to comply with the European Convention on Human Rights and its management decisions could be subject to judicial review. It is also an issue which divides judges.

Until the Human Rights Act 1998, the distinction between public authorities and private contractors seemed clear cut. But S6(3) of that Act extended the definition of 'public authority' to include 'any person certain of whose functions are functions of a public nature'.

Last February the question of whether a private psychiatric hospital exercised public functions reached Justice Keith in R v partnerships in care limited ex parte A.

After a two-year wait, the claimant was admitted to a special ward for women with personality disorders, at a private hospital. Her treatment was funded by the NHS.

Just two months later, hospital managers decided to change the focus of the ward so it would serve women with mental illnesses, not personality disorders. Though the claimant was allowed to stay on, specialist staff were transferred elsewhere, leaving the claimant without the care she claimed to need.

The first issue was whether the decision to change the focus of the ward was 'in exercise of a public function'. Second, whether the private hospital was a public authority in terms of S6.

Justice Keith ruled the hospital was undertaking public functions because the treatment was governed by the Mental Health Act 1983 and other legislation. But his decision sits uncomfortably with another decision made in Heather and others v Leonard Cheshire Foundation (8 April 2002, Times Law Reports). Then the Court of Appeal ruled that a private care home provider did not perform a public function in its decision to close a home.

Elizabeth Heather and Hilary Callin were patients at Le Court, which was owned and operated by LCF, the UK's leading voluntary provider of disabled care and support services. Their placements had been publicly funded.

On 27 September 2000, LCF proposed the closure of Le Court and the transfer of existing residents to other community-based units. The claimants sought judicial review, saying LCF had contravened article 8 of the Human Rights Convention.

Lord Woolf said while the council had contracted with a voluntary provider, it remained legally responsible for arranging suitable accommodation.

To protect residents' rights in this type of situation, Lord Woolf has urged councils to ensure their contracts with care home providers contain express provisions requiring them to comply with the European Convention. This would enable residents to sue homes directly if their human rights are infringed.

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