In order for an organisation’s decision to be subject to judicial review, that organisation must have been exercising a public function. The Courts sometimes refer to this as there being sufficient ‘public flavour’. This was the key issue before the High Court in R (Macleod) v Governors of the Peabody Trust  EWHC 737 (Admin) and two other recent cases. These cases are a helpful reminder that it is not always clear when a private organisation is carrying out public functions. The specific facts in each case can determine the matter one way or the other.
The leading case on providers of social housing and when they are exercising public functions is R(Weaver) v London and Quadrant Housing Trust  1 WLR 363. This case found that the provider of social housing was a hybrid authority: some functions were public (and challengeable by judicial review) others were private. In contrast, in Macleod the housing association, the Peabody Trust, was found to only be exercising private functions, not capable of judicial review.
In the case a tenant of the Trust requested a mutual exchange of the flat he occupied in London with a tenant in Edinburgh, which the Trust refused. The flat was previously owned by the Crown Estate Commission (“CEC”), which sold it to the Trust. The relevant factors which determined that the Trust was not exercising a public function in relation to the tenancy were:
- The Trust purchased the property using funds raised on the open market and not with a public subsidy or grant.
- Although the property was not let at full market rent it was not clear it was pure social housing. The property was reserved for key workers including those with a family income up to £60,000 per annum. The commercial housing market in London adequately serves those workers’ needs. The provision of below market rent properties for such workers does not fall within the definition of social housing in the Housing and Regeneration Act 2008.
- (Unlike in Weaver) the Trust did not have an ‘allocation relationship’ with a local authority. Nor was it ‘acting in close harmony’ with an authority to assist it to fulfil its statutory duty.
- The rent from the properties was not subject to the same level of statutory regulation as social housing in general.
Overall the Court found that “the cumulative effect of the various factors in the circumstances of this case does not have the sufficiency of public flavour … found in Weaver”.
Even if the Trust had been amenable to judicial review, the court held that the decision was one that was open to a reasonable decision maker.
Two other recent cases have considered if a decision was made by an organisation which was exercising public functions:
- In Attorney General for the Prince of Wales v Information Commissioner and another  UKUT 154 (AAC) the Duchy of Cornwall was held not to be a public authority for the purposes of the Environmental Information Regulations 2004 (“EIRs”). The definition of public authority in the EIRs includes a “body or other person, that carries out functions of public administration”. The basis for this decision is that it was held that the Duchy does not have legal personality.
- In R (Holmcroft Properties Ltd) v KPMG  EWHC 323 (Admin) KPMG’s duties were held to not have “sufficient public law flavour to render it amenable to judicial review”. KPMG oversaw the implementation and application of a scheme set up by Barclays (in response to an undertaking to the Financial Services Authority) to redress customers who had been missold interest rate hedging products.
In summary, in borderline cases it may be difficult to judge whether there is enough ‘public flavour’ to mean an otherwise private organisation is exercising public functions that may be challenged by judicial review. If you are uncertain and have circumstances where you think the answer may matter, it is advisable to seek advice before any final decision is made so that you know what is at stake and how that decision might be challenged.
If you have any questions relating to this article, please contact Melanie Carter for more information.
Posted on 21/04/2016 in Legal UpdatesBack to Knowledge