Shock to the system

Being prepared for potential legal actions is crucial to public sector risk management strategies. Tim Smith and Jeremy Davies scan the horizon to alert organisations to issues they may face in the future

Local authorities and their insurers have seen more than their fair share of legal development and test cases recently. Claims against public bodies continue to test legal boundaries and the importance of the issues mean first instance decisions are likely to go to appeal.

Following recent guidance from the courts on limitation in abuse cases, there are yet more important cases in the pipeline. And against the background of the harrowing facts of some claims brought against social services departments, there is a need to assess the changing legal framework and to look out for test cases.

Local authorities used to enjoy immunity from negligence claims against social workers - the high mark was the 1995 House of Lords decision in X (Minors) v Bedfordshire. But times have changed; the increasing number of claims against public bodies, as well as European Convention case law, means new types of claims against social services departments are now being seen.

Claims upsurge

Since the 1999 House of Lords decision in Barrett v Enfield, claims have been brought by adults who were previously children in care. They range from cases where a local authority failed to take proactive steps to promote a child's welfare, to instances where a care worker or a foster parent abused a child in care. The 2003 Court of Appeal case of J D v East Berkshire Community Health NHS Trust pointed to wider possible liability, not limited to a child's time in care, but also to the conduct of investigations into suspected child abuse and the initiation and pursuit of care proceedings.

Boundaries are now being tested further. The courts have so far resisted claims by parents in respect of investigations into child abuse. With the exception of bad faith, no duty is owed by local authorities to parents, whose interests conflict with those of the children. This is the case before and after an interim care order is made; such as was seen in the 2006 Court of Appeal case AD and OH v Bury.

At the same time, more claims are emerging brought by children currently in care who say they should have been taken in sooner, plus claims from individuals who say they should have remained in care. For example in the high court case of Pierce v Doncaster last year, the claimant recovered damages after he was wrongly returned to his birth family in 1977. Most recently - in X and Y v Hounslow (2008) - the high court found that a local authority owed a duty of care to vulnerable adults who were its council tenants, adding that it had breached this duty in failing to arrange an emergency transfer. And more claims from disabled or elderly adults regarding the care provided by local authorities are expected in the future.

Another area where claimants are testing the frontiers in abuse claims is in relation to vicarious liability. The House of Lords case of Lister and others v Hesley Hall (2001) followed Canadian cases in deciding that, as a matter of principle, there could be vicarious liability for acts of abuse. The key question was whether there was a close connection between the acts themselves and the nature of the abuser's employment.

Essentially this made the route to liability for claimants far easier. If the claimant could establish vicarious liability then all that was required, subject to any limitation barrier, was to establish the abuse took place. In that context a criminal conviction for the abuse could often be a key factor.

In relation to cases when children contend that they were placed with foster parents who abused them, the question is not only whether the local authority acted negligently but also whether vicarious liability applies. The claimant lobby is now seeking to argue that local authorities are vicariously liable for acts of abuse by foster parents.

By way of an example, Berrymans Lace Mawer is currently dealing with a case where the arguments are that the local authority negligently placed a child with unsuitable foster parents and then failed to monitor that placement. The claimant is now seeking to amend her case to the effect that the defendant local authority is vicariously liable for the acts of the foster parents. There is no English authority for this proposition but Canadian authority suggests such an argument might be maintained. Undoubtedly this will be a key battleground in the next year or two.

Freedom of information

Recent media focus on the 'big brother' culture - particularly related to computerising health records on a national basis, the use of DNA material in passports and the possibility of DNA databases - coupled with some extremely high-profile losses of data by public authorities has focused attention on the nature and extent of information held by those authorities. The Data Protection Act 1998 and the Freedom of Information Act 2000 are increasingly being used by individuals to obtain access to information held about them and others.

This is often only the first step in the process. Once such information is obtained, these individuals often object to what they find. Consequently we are seeing an increase in the number of claims brought for compensation under the Data Protection Act or for rectification of material that is said to be inaccurate (frequently where the individual disagrees with what has been said about them). This often gives rise to claims for defamation as well. Local government is particularly susceptible to claims where highly sensitive - and potentially contentious - material is involved. This is often the case, for example, in relation to records held by social services.

The two Acts are relatively new statutes and the law in this area is very much developing. As well as new case law, fresh guidance notes are regularly issued by the Information Commissioner. Given the heightened awareness of material held by national and local government, coupled with concerns about the use and misuse of that information, the number of claims is expected to keep growing.

In addition, discrimination claims are now emerging with some frequency - particularly in an education context - to clarify the Disability Discrimination Act 1995. Only last month the House of Lords provided guidance on disability discrimination in the context of local authority possession proceedings. Lewisham Borough Council showed that there had been no discrimination when it evicted a mentally ill tenant who had sublet his flat. This decision will be welcomed by local authorities as a common-sense approach.

- Tim Smith and Jeremy Davies are partners at Berrymans Lace Mawer.

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