The outsourcing of s.202 Housing Act 1996 reviews by local authorities to private, commercial bodies came under scrutiny in Charlotte Augustin v London Borough of Barnet, Central London County Court, 22 May 2009 (no report available online yet). There are a couple of Court of Appeal cases on the same issue coming up, so we will be revisiting it.
This was a s.204 appeal, heard by Mr Recorder Hollington QC, of a s.202 review decision, purportedly by Barnet, upholding their decision that an offer of temporary accommodation had been suitable. The s.202 decision was actually made by Mr Minos Perdios, the director of Housing Reviews Limited (HRL), a private limited company.
The s.204 appeal was on grounds that:
1. The review was a breach of Art. 6, as it was not a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law
2. Alternatively, the review was vitiated by common law bias, as a fair minded observer would perceive there to be a real possibility of bias towards Barnet.
3. The decisions should be quashed on its merits as failing to take into account the level of support the appellant received from family, making errors of fact on traveling times, unreasonable in its decision that the appellant did not need the help of her family and unfair in not giving the appellant a chance to respond to the finding that the appellant could have found a new local nursery. (The issue of suitability turned on the location of the property).
The Court held that the review was vitiated by the appearance of bias on the part of Mr Perdios, but went to to consider the other grounds of appeal, including finding that there was an Art 6 breach in delegating the review decision to an independent contractor, and that the decision was flawed in that all material factors relating to family support had not been taken into account.
On apparent bias, the Court noted that the website for HRL stated:
We have dealt with over 3,500 reviews with unparallel [sic] success. Out of these cases 158 have been appealed in the County Court with 95% of cases successfully defended.
and under ‘course aims’:
The course will also provide ideas on writing s.184 decision letters. Too often courses do not provide homeless officers with the tools needed to make adequate enquiries, be able to obtain all the relevant information during the crucial initial interview through effective questioning and use the information obtained to write a ‘watertight’ s.184. The course also provides practical advice on how to write a ‘watertight’ s.184.
The Court found that the references to ‘success’ and to ‘watertight’ decision-making could only be references to findings adverse to the applicant. It was wrong for a person acting in a quasi-judicial capacity to be focussing on such cases. In a position where the only relationship with Barnet was commercial, there were no professional constraints or procedural safeguards beyond those in the Allocation of Housing and Homelessness (Review Procedures) Regulations 1999, and no evidence of Mr Perdios’ skills or experience beyond a mention that he used to be a local authority review officer, there was a clear appearance of bias in his choosing to promote himself in these terms.
[A list of Councils for which Mr Pedios/HRL has provided services is on HRL's site, here. The site has been edited a little, removing the reference to success in appeals, but the passage on 'watertight' s.184s is still there.]
On Article 6, Barnet had relied on the Local Authorities (Contracting Out of Allocation of Housing and Homelessness Functions) Order 1996 and the 1999 Regulations, arguing that it was permitted by Parliament to contract out the review functions and no other safeguards had been imposed other than the 1999 Regs. The court should be very reluctant to hold Parliament’s intention fell foul of Art 6.
However, the Court found that, while there is a power to contract out the s.202 function, it depends on the terms and circumstances of the sub-contracting as to whether there is an Art 6 breach. The 1996 Order contemplates that the Local Authority will exercise its sub-contracting power in a manner as will avoid a breach, e.g. by not contracting to an organisation whose integrity, competence and experience were clearly deficient, even leaving bias out of the picture. No compliance with the procedural safeguards in the 1999 Regs nor any power of judicial review could cure the manifest defects in such a case. And deciding Art 6 compliance requires a view to the composite decision-making process, including but not limited to the judicial review process (R (Alconbury Developments Limited) v SS for the Environment, Transport and Regions  2 AC 295, Runa Begum  2 AC 430 and Adan v Newham LBC  1 WLR 2120. Ironically, in Adan, the applicant’s submisison was that the LA was obliged to contract out, to ensure independence. This was rejected by the Court of Appeal).
Hale LJ and Brooke LJ in Adan agreed that the constitution and procedures of the body to whom reviews were contracted out would be relevant to judging compliance with Art 6. In Runa Begum, the Lords expressed concerns over the Art 6 compliance of the independence of ‘a contracted fact finder, whose services could be dispensed with’ (Lord Hoffmann) and Lords Bingham and Millett doubted that ‘the exercise of quasi-judical powers is a function of the authority within the meaning of the 1996 Order’ and doubted that a person ‘appointed ad hoc by the authority directly concerned and lacking any kind of security of tenure could constitute an independent tribunal established by law for art 6(1)’. These were all dicta in those cases, though.
The Court found that the review was ‘a classic administrative decision, involving a high degree of discretion and subjective judgment’. The decision maker must be expert and also take into account policy considerations,, such as local housing and financial constraints. The ‘was a decision that Parliament had delegated to a democratically accountable institution, not the courts.’ Article 6 respected that democratic principle (per Lord Hoffmann in Alconbury, para 69).
When Barnet contracted out the review function to a person such as Mr Perdios and HRL, the decision-making ceased to be that of a democratically accountable institution. The respondent had relied on that very independence in arguing no breach of Art 6. It follows that all the reasons for the deference to the Local Authority’s judgment and discretion that are present in Article 6 fall away.
In order to comply with Art 6, contracted out review functions would either have to mean greater powers of review on merits for the courts than are given in s.204 or greater safeguards in the procedure of the review process than those in the 1999 Regulations. The review process in this case breached Art 6.
[Edit: It should be noted that it was common ground in this case that it did involve a determination of civil rights, but Barnet expressly reserved the position to argue to the contrary in the House of Lords.]
This is, of course, just a County Court s.204 appeal. It is also primarily decided on the appearance of bias rather than the article 6 point, but the argument is interesting and clearly has further to go. Two previous s.204 appeals on the issue are mentioned in relation to Mr Perdios’ review decisions and Art 6 – HHJ Dedman at Southend on Sea County Court in April 2008 found no objection, while HHJ Barnett QC at Colchester Couty Court in October 2008 held there was a valid objection. We’d be happy if anyone with any further information on those cases would contact us.
So, we’ll see what the Court of Appeal makes of the issue this time round. Again, any information on those forthcoming appeals gratefully received.