Contracting Out Section 202 Reviews
The Court of Appeal has held that a local authority could contract out its function of carrying out statutory homelessness reviews and that a third party carrying out such reviews did not breach human rights. Elizabeth Wood examines the judgement.
Background law
Part VII of the Housing Act 1996 (the Act) sets out the obligations of local housing authorities to persons who are homeless or threatened with homelessness. There is a right under section 202 of the Act for a person who has been refused housing assistance to request a review of the local housing authority's decision.
Facts
In De-Winter Heald and Others v London Borough of Brent [2009] EWCA Civ 930, Brent, in common with 12 other local authorities, had contracted out its section 202 review function to Housing Reviews Limited, of which Mr Minos Perdios was the director and controlling shareholder.
The appellants had all had their application for review under section 202 refused by Mr Perdios, who sent them a letter on Brent notepaper signed 'Minos Perdios Reviews Manager'. The appellants had exercised their right under section 204 of the Act to have that refusal challenged by the County Court, which had upheld the decisions.
The two issues before the Court of Appeal were:
- Whether a local authority may lawfully delegate the performance of its reviews to a person who is not an officer or employee
- Whether a review carried out by that person satisfies the requirements of Article 6 of the European Convention on Human Rights (the right to a fair hearing), assuming it to be applicable.
On the first issue, the Court ruled that contracting out section 202 reviews was lawful.
The Local Authorities (Contracting Out of Allocation of Housing and Homelessness Functions) Order 1996 (the 1996 Order) made under the Deregulation and Contracting Out Act 1994 allows any function of an authority which is conferred by or under Part VII of the Act, except one listed in Schedule 2 to the 1996 Order, to be exercised by, or by employees of, such person as that authority may authorise. Since the review function was not listed in Schedule 2, it must be able to be contracted out. This clarified case law which had been inconsistent on this point.
On the second issue, the Court did not see that a third party should necessarily be any less impartial than an employee of the authority. In any case, Brent accepted the decisions made by Mr Perdios as its own. In fact, Lord Justice Sedley in his concurring judgment said: "It is difficult to envisage a process less compatible with Article 6 than the in-house review by one official of another official's decision on an issue on which the local authority, through both of them, sits as judge in its own cause" and that delegating the review function to a complete outsider probably offers more in the way of independence and impartiality than the in-house system.
Comment
This case is welcome confirmation that local authorities can contract out their section 202 review function. Be careful to make the status of the reviewer clear though. In this case Mr Perdios had sent his decision letters out on Brent headed notepaper and signed them 'Minos Perdios Reviews Manager', giving the impression he was an officer of Brent. The Court said that this was not materially misleading but that if it had been, that might give rise to a ground for judicial review. To be on the safe side, make sure the contractor sends letters out on their own paper stating that they are acting on behalf of the authority.
Elizabeth Wood is an Associate in the Public Sector and Projects team at Walker Morris. She and colleagues regularly contribute articles and updates to reach…®, the Walker Morris knowledge database and alerter service.
