House of Lords · 3-2: Lords Scott, Mance and Neuberger; Lord Bingham and Baroness Hale dissenting
Facts
YL, an elderly woman with Alzheimer's disease, was placed in a care home run by Southern Cross Healthcare Ltd, a private company, under arrangements made and part-funded by Birmingham City Council in discharge of its duties under the National Assistance Act 1948. Southern Cross sought to end her residence after a dispute with her family. YL argued that Southern Cross was a public authority under the Human Rights Act 1998, section 6(3)(b), because it exercised functions of a public nature in providing the accommodation, so that it had to act compatibly with her rights under the European Convention on Human Rights, including the right to respect for private and family life.
History
The courts below held that Southern Cross was not a public authority for the purposes of the Act, and YL appealed to the House of Lords.
Issue
Whether a private company which provides accommodation and personal care to a resident under arrangements made by a local authority is exercising a function of a public nature within the Human Rights Act 1998, section 6(3)(b).
Held
Appeal dismissed by a majority of three to two. Southern Cross was not a public authority when providing care and accommodation to the claimant.
Ratio
- A private company providing care and accommodation under contract with a local authority, for a fee and as part of its own commercial business, is not performing a function of a public nature within section 6(3)(b), even though the local authority itself would be performing a public function in arranging and funding the placement.
- The fact that the service is publicly funded, regulated by statute and meets a need for which the state has accepted responsibility does not by itself make the provider a public authority.
The judgments
Lord Scott of Foscote (majority)
Held that the care home was providing a service in the ordinary course of its private business under a contract, and that the council, not the care home, was the body discharging the statutory duty; the provider therefore did not exercise a function of a public nature.
Lord Mance (majority)
Agreed that the provision of accommodation and care for a fee by a commercial body, subject to the regulatory regime but not exercising any coercive or governmental authority, was not a public function. The council's funding and statutory responsibility did not change the character of the home's activity.
Lord Neuberger of Abbotsbury (majority)
Agreed that the home was a private business, deriving its income from fees and operating for profit, and that nothing about the activity itself or the mode of the home's provision made it a public function.
Lord Bingham of Cornhill (dissenting)
Would have held that the home exercised a public function: it carried out the council's statutory responsibility to provide accommodation for vulnerable people with public funds, and the vulnerability and dependence of residents made it appropriate for the rights under the Convention to be protected against the provider.
Baroness Hale of Richmond (dissenting)
Would have held that the company was performing the council's public function on its behalf, so that the council could not avoid the application of the Convention by outsourcing, and that the nature of the function pointed to a public function.
Key reasoning
- Section 6(3)(b) requires a focus on the nature of what the person does, but the commercial nature of the home and the existence of a private contract with the resident indicated that it was carrying on its own business.
- The statutory duty to arrange accommodation remained with the local authority, which retained responsibility for the arrangement, so the provider performed a service the authority had chosen to buy, not a public function transferred to it.
- To treat private providers as public authorities merely because a service is publicly funded and of social importance would extend the Act well beyond the bodies Parliament intended to bind.
Where it fits in the module
On the FHS topic of when private bodies are subject to judicial review, YL exposes the divergence between amenability for judicial review under Datafin [1987] QB 815 and public authority status under the Human Rights Act 1998. The majority adopted a restrictive reading consistent with R (Heather) v Leonard Cheshire Foundation [2002] EWCA Civ 366, while the dissents show the functional alternative. The statutory reversal in 2008 and the later approach to contracted-out services, for example in R (Weaver) v London and Quadrant Housing Trust [2009] EWCA Civ 587, illustrate how contested the boundary remains. The tutorial question is whether outsourcing should remove public-law protection.
Criticisms
- The majority approach allows the state to avoid human rights obligations by contracting out services, leaving vulnerable people with weaker protection against the private provider than against the council.
- The focus on the commercial character and private contract of the provider is an arbitrary test, because public functions can be performed for profit and the claimant has no real choice of provider.
- The distinction between the council as a public body arranging care and the care home as a private body providing it is formalistic, as the practical experience of the resident is the same.
- The decision treats public funding and regulation as irrelevant, though these are the features that tie the activity most closely to the state.
Written with AI (claude-sonnet-5.5 (Claude Code writer)) on 1 November 2026, reviewed for errors by a second model (claude-sonnet-5.5 (Claude Code checker)). Read the case itself at [2007] UKHL 27, [2007] 3 WLR 112. Spotted an error? Tell us.