24 August, 2009
The Court of Appeal has recently provided a decision on the validity of handing the review process of homelessness applications to independent third parties. A number of appeals were combined in the case of Michaela De-Winter Heald and Others v Brent London District Council  EWCA Civ 930 on this issue.
In an age of work being increasingly outsourced to the private sector, decisions such as this may become of greater relevance to the housing sector in the future. It provides an indication on how housing associations and other similar organisations can expect to operate and satisfy their legal obligations in the coming years.
Each of the applicants (A) had requested reviews under the Housing Act 1996 of either the suitability of their temporary accommodation which had been provided by Brent London District Council (B), or of the refusal of their homelessness applications.
B had contracted out the review stage to a private company (C) and the reviews were carried out by F, who was a director and controlling shareholder of C. The evidence provided by B said that each of the decisions provided by F had been adopted by them in determining the applications.
At the initial hearing in the county court, it was held that the 1996 Act allowed the contracting out of the review phase and said that none of the review decisions could be considered to be legally incorrect.
A appealed on the grounds that it was unlawful for B to contract out the application review process, as it had the result of making the reviews and their decisions unlawful. It was also argued that there was an appearance of bias on the part of F which meant that the reviews had also not been fairly conducted under Article 6 of the European Convention on Human Rights.
B countered these arguments by submitting that the contracting out of reviews was expressly authorised by the Deregulation and Contracting Out Act 1994 and that A's rights under Article 6 were not breached by the process itself or by F.
In dismissing A's appeals, the Court of Appeal expressly stated that statute clearly permitted the review function of such applications to be contracted out to a third party and as such, B was entitled to use companies such as C to perform the duties for them.
Following on from this, the court said that such a review carried out by a third party would not necessarily infringe Article 6, on the assumption that it would actually apply. Previous case law has stated that a review carried out by an employee of a local housing authority would not infringe Article 6, even though that worker was not independent. There was therefore no reason to assume that a third party such as C would be any less impartial than an employee. Additionally, the decisions reached by F had been adopted by B, so it was irrelevant whether F was not democratically elected or directly accountable. The court was also of the view that an objective and well-informed observer would not think that there was a real danger of F being biased and the decisions themselves were not marred by any apparent bias.
The decision of the Court of Appeal in this case has shown that there is relative freedom on the part of local housing authorities and housing associations to carry out their review procedures. However, it is important for decisions such as these to be conducted in a manner where there can be no allegations made of unfairness or bias and the process is carried out in a transparent way.