Court: House of Lords
Citation:YL v Birmingham City Council [2007] UKHL 27, [2008] 1 AC 95
Legal Domain: UK Constitutional Law – Human Rights – Judicial Review – Public Authorities – Private Care Homes
YL v Birmingham City Council is a leading case in British constitutional law that addresses the interpretation of “public authority” under the Human Rights Act 1998 (HRA 1998). The case is particularly significant in the context of privately delivered public services, raising important questions about the reach of human rights obligations when local authorities delegate their statutory responsibilities to private entities.
This judgement had far-reaching implications for how vulnerable individuals, especially those in care settings, can rely on the protection of the European Convention on Human Rights (ECHR).
Facts of YL v Birmingham City Council Case
The claimant, referred to as YL, was an elderly woman residing in a care home operated by Southern Cross Healthcare Ltd, a private company. Her accommodation at the care home was arranged by the Birmingham City Council (BCC) under its statutory obligations pursuant to Section 21 of the National Assistance Act 1948. The placement was largely funded by the local authority, with additional contributions made by YL’s family, and the National Health Service (NHS) covering certain nursing care costs.
Following allegations concerning the behaviour of YL’s family during their visits to the care home, Southern Cross decided to terminate YL’s placement by giving her 28 days’ notice to vacate the premises. In response, YL brought a claim under the Human Rights Act 1998, alleging a violation of her rights under Article 8 of the European Convention on Human Rights, which guarantees respect for private and family life, home, and correspondence.
YL contended that since Southern Cross was delivering care services pursuant to a local authority’s statutory duty, it was exercising functions of a public nature, and therefore should be considered a public authority under Section 6(3)(b) of the HRA 1998. If so, Southern Cross would have been under a legal obligation not to act in a way incompatible with her human rights.
Legal Issue
The principal issue in YL v Birmingham City Council was:
Whether Southern Cross Healthcare Ltd, a private company providing care home services under contract with a local authority, was exercising a function of a public nature within the meaning of Section 6(3)(b) of the Human Rights Act 1998, and thereby subject to the ECHR obligations.
This question concerned the broader matter of whether private companies could be liable under the Human Rights Act when delivering public services.
YL v Birmingham City Council Judgement
The House of Lords, by a 3–2 majority, held that Southern Cross Healthcare Ltd was not exercising a public function, and therefore was not a public authority under Section 6(3)(b) of the Human Rights Act 1998. As a result, YL’s claim under Article 8 of the ECHR failed.
Reasoning of the Court in YL v Birmingham City Council
Commercial Nature of the Provider
Lord Scott, concurring with Lords Mance and Neuberger, emphasised that Southern Cross was a commercial, profit-making company operating in a competitive market. The company was not a public or charitable institution and entered into private law contracts both with local authorities and directly with care home residents. Southern Cross had no statutory powers, was not publicly funded, and had full discretion over whom it accepted as residents, subject only to general anti-discrimination laws.
Lord Scott stated:
“Southern Cross is a company carrying on a socially useful business for profit. It is neither a charity nor a philanthropist.”
This commercial motivation, in the court’s view, supported the conclusion that the company was not performing a public function.
Lack of Public Funding and Statutory Status
The Lords highlighted that although fees were paid by the local authority, these payments were made under standard commercial contracts, and did not constitute public subsidy. Southern Cross received money in exchange for services, not as part of any government funding scheme. Lord Scott noted that such arrangements did not make the provider a public authority:
“There is no element whatever of subsidy from public funds… It is simply carrying on its private business with a customer who happens to be a public authority.”
The court analogised Southern Cross’s position to that of contractors providing cleaning or catering services to local councils—just because they serve public clients does not mean they become public bodies.
Context of Care and Autonomy of the Company
The court considered the context in which services were provided. Although local authorities had a statutory duty to arrange care, Southern Cross was not created by statute, did not operate under any statutory framework, and had no statutory powers to enforce or regulate care. Its role was purely contractual, and it maintained autonomy over its business operations.
The Lords concluded that the provision of care and accommodation, in these circumstances, did not elevate the company’s function to that of a public nature.
Dissenting Views
Two Lords dissented, arguing that the nature of the function performed should determine public status, not the identity or structure of the provider. They believed that where private entities perform essential public duties, particularly in areas involving vulnerable individuals, those bodies should be held to the same human rights standards as public authorities.
They were concerned that privatisation of public services should not lead to diminished human rights protections.
Conclusion
YL v Birmingham City Council [2007] UKHL 27 remains a landmark case in British constitutional and human rights law. The House of Lords ruled that Southern Cross Healthcare Ltd, a private care home operator, was not exercising a function of a public nature, and therefore not subject to the Human Rights Act 1998.
The court’s reasoning rested on the commercial nature of the company, its lack of statutory powers, and the private contractual framework through which it operated.
The case has had enduring relevance in discussions about the boundaries of judicial review, the definition of public authority, and the scope of human rights protections in a changing public services landscape.