Friday, 25 October 2013

Outsourcing and the Liability of the NHS

The Supreme Court decision in Woodland-v-Essex CC provides very clear guidance as to when a non-delegable duty may arise, fixing liability for tort on an organisation such as a state school, a care home or a public healthcare provider even when the harmful negligence has been committed by an independent contractor.

The claimant suffered catastrophic injury during a school swimming lesson. Her school was run by Essex CC but the alleged negligence was that of an independent contractor to which the provision of swimming teaching had been "outsourced". The High Court and Court of Appeal had held that the education authority was not vicariously liable for the acts and omissions of the contractor. It did not owe a non-delegable duty of care to the claimant.

In the clinical negligence context those decisions seemed to build on the case of Farraj-v-King's Healthcare NHS Trust  in which case the Court of Appeal had dismissed a claim against a hospital which had employed an independent laboratory to analyse a tissue sample for a patient who was not being treated by the hospital and was therefore not in its custody or care.

The concern was that the NHS could outsource even core services to independent contractors and thereby avoid liability. Would such contractors be adequately insured. What would happen if the went into liquidation? PPOs might well not be available even if the contractor was liable if the NHS was not liable as well.

The Woodland decision should put to rest such concerns.

Lord Sumption, delivering the lead judgment, was critical of the fact that the Defendant's liability in principle had been taken as a preliminary issue. Although the Supreme Court decided the issue in the claimant's favour the case will now go back to the High Court to determine the other substantive issues. However, on the preliminary issue Lord Sumption reviewed the case-law paying some attention to Denning LJ's judgement in Cassidy v Ministry of Health [1951] 2 KB 343, and a series of Australian cases and extracted the following principles:

  1. In my view, the time has come to recognise that Lord Greene in Gold and Denning LJ in Cassidy were correct in identifying the underlying principle, and while I would not necessarily subscribe to every dictum in the Australian cases, in my opinion they are broadly correct in their analysis of the factors that have given rise to non-delegable duties of care. If the highway and hazard cases are put to one side, the remaining cases are characterised by the following defining features:

  2. (1) The claimant is a patient or a child, or for some other reason is especially vulnerable or dependent on the protection of the defendant against the risk of injury. Other examples are likely to be prisoners and residents in care homes.
    (2) There is an antecedent relationship between the claimant and the defendant, independent of the negligent act or omission itself, (i) which places the claimant in the actual custody, charge or care of the defendant, and (ii) from which it is possible to impute to the defendant the assumption of a positive duty to protect the claimant from harm, and not just a duty to refrain from conduct which will foreseeably damage the claimant. It is characteristic of such relationships that they involve an element of control over the claimant, which varies in intensity from one situation to another, but is clearly very substantial in the case of schoolchildren.
    (3) The claimant has no control over how the defendant chooses to perform those obligations, i.e. whether personally or through employees or through third parties.
    (4) The defendant has delegated to a third party some function which is an integral part of the positive duty which he has assumed towards the claimant; and the third party is exercising, for the purpose of the function thus delegated to him, the defendant's custody or care of the claimant and the element of control that goes with it.
    (5) The third party has been negligent not in some collateral respect but in the performance of the very function assumed by the defendant and delegated by the defendant to him.

    Lord Sumption carefully considered but dismissed the suggestion that to find a non-delegable duty of care on an education authority in such circumstances would be overly burdensome. 
Farraj fell on the wrong side of the line from the claimant's perspective. In that case the claimant was not a patient was not in the custody or care of the Trust. 

It is obvious that Woodland has important implications for NHS outsourcing and for the liability of NHS bodies which rely on independent contractors to carry out their core positive duties to a patient under their care and control.

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