Public Sector Update - January 2012

Planning

Draft National Planning Policy Framework ("NPPF") considered by Commons Community Committee

The House of Commons Communities and Local Government Committee has released a report on the draft National Planning Policy Framework ("NPPF").  The draft NPPF would cut down over 1,000 pages of planning regulations down to just 52 with a view to overcoming planning delays, which the Government believes stunt economic growth. The committee has suggested a number of significant changes and included their own definition of sustainable development.  

One of the main issues looked at in the report was the government's presumption of sustainable development.  The report said that in its current form the NPPF gave the impression that greater emphasis should be given in planning decisions to economic growth and undermined the environmental and social elements of the planning system. This was certainly the opinion that the NPPF's opponents, organisations like the National Trust, had expressed last year when the draft NPPF was first published.

The report sought to redress this and suggested their own definition of sustainable development; Sustainable development is development that should address economic, environmental and social benefits "positively and equally". Furthermore that planning decisions and policies should be based on principles that "areas should live within their environmental limits; should achieve a sustainable economy and should seek to ensure a strong, healthy and just society". The committee's suggestion shifts the focus away from the Government's earlier intent to promote economic growth to a more harmonised approached between economic, environmental and societal interests.

The report also called for more certainty in the draft NPPF. The fact that the NPPF had been condensed into 52 pages meant that critical wording had been lost and what remained was "often unhelpfully vague." The report singled out phrases like ‘significant weight’, ‘great weight’, ‘substantial weight’, ‘considerable weight’ and ‘significant flexibility’, and suggested that they should be more tightly defined.

Other key suggestions in the report included emphasising the importance of the local plan and clarifying the expression of policy on brownfield land, offices in town centres and windfall sites.

It remains to be seen, however, what suggestions the Government will now implement into the final version of the NPPF. Government Minister Greg Clark has welcomed the report and said that he and the Government would consider the committee's report "very carefully".

Doctor Awarded Record Discrimination Compensation

Mid Yorkshire Hospitals NHS Trust, along with three of its senior employees, has been ordered by an Employment Tribunal to pay almost £4.5 million in compensation for racial and sex discrimination.  The award is believed to be the largest ever to be ordered in a UK discrimination case.
The successful claimant, Dr Eva Michalak, was employed as an obstetrician at Pontefract General Infirmary.  Before her dismissal in July 2008 she had, the Tribunal found, been subject to a "concerted campaign" to end her employment, which began shortly before she went on maternity leave.  She was the victim of false allegations, harassment, and unjustified suspension from work. These actions had a serious effect on Dr Michalak's psychiatric health, and she is, as a result, unlikely to return to her former profession.

This ruling is a dramatic reminder to employers of the need to take steps to avoid employees being subject to discrimination and harassment. Unlike the compensatory award in unfair dismissal cases, which is currently limited to £68,400 (£72,300 from 1/2/12) there is no statutory cap on awards where discrimination is established.  This will be of particular concern to public sector employers, which are under increasing budgetary pressures - the NHS Trust in this case, for example, is already struggling to make £30 million of efficiency savings. 

The fact that Dr Michalak was a relatively high-paid employee, with an annual salary of £88,000, was clearly relevant to the size of her compensation award.  However, it is important to note that even lower-paid employees can be awarded sizeable sums if they are found to be the victims of discrimination.  In general, compensation for loss of future earnings is rising, as Employment Tribunals recognise the lack of alternative positions in the current job market.  In the public sector context in particular, compensation for loss of pension rights can be substantial, as it is unlikely that most employees would be able to find a comparable pension in the private sector. In this case, for example, £660,000 was awarded for loss of pension rights alone.

Fortunately, there are practical steps that public sector employers can take to limit  the risk of discrimination and harassment claims succeeding.  Employers should ensure that their policies and procedures are comprehensive and are updated to reflect developments in the law.  In particular, training and written policies can be used to make staff aware of what constitutes discrimination and harassment, and appropriate disciplinary sanctions applied for discrimination-related misconduct.  An effective Anti-Harassment procedure may also allow employees' concerns to be addressed internally, before they give rise to potentially expensive claims.

Construction

Disclosure of Experts' Reports in Construction Disputes

Many construction disputes revolve around technical points and issues.  As a result, professional consultants are often used as experts to help resolve or determine construction disputes by giving their opinions on critical issues such as price (where the value of works is in dispute) and/or quality (where it is alleged, for example, that work has not been carried in accordance with the contract).  When a party instructs an expert in support of its case, while investigations take place, and perhaps as a result of further and important information emerging, the report is likely to develop through a number of draft stages before it is presented in its final form. 

Any report relied upon by a party to litigation proceedings must be disclosed to the other parties for them to examine and, if appropriate, challenge its contents.  However, the general rule is that until an expert report is adduced as evidence its contents are legally privilege - in other words they are not disclosable as a matter of right to the other parties. 

The question of whether privilege in a report is waived at an earlier stage, specifically when the contents of a document are 'deployed' in evidence by, for example, quoting extracts in a witness statement or claim form, was explored recently by the Technology and Construction Court in ACD (Landscape Architects) Limited v Overall [2011] EWHC 3362 (TCC).

The Court considered and decided that privilege would be waived where the document is "actually or effectively referred to… and or part of its contents are deployed for use actually or potentially" in the proceedings.  The crucial distinction is "whether the contents… are being relied upon rather than the effect or impact of the document".

If a party relies on parts of the contents of a document, then that party will be required to disclose the whole document to avoid situations that may allow parties to cherry-pick extracts and withhold information that could benefit another party.

Accordingly, if a party does not want to disclose certain aspects of a report then they should not refer to any of its contents, even if particular extracts support that party's case.

Such waiver of privilege may also impact on compliance with procedural rules.  In the ACD case above, as the draft report in question had become disclosable, the Court took the view that the Defendant had failed to comply with Paragraph 6.4.2 of the TCC Guide, which states

"It is important to ensure that the evidence in opposition to the application is served in good time [5 days minimum] before the hearing so as to enable:

• The court to read and mark up the evidence;and

• The applicant to put in any further evidence in reply that may be considered necessary."
  

In short, a party to litigation proposing to quote from an expert's report in support of its case should, before doing so, decide whether it is prepared to share in full the contents of that report at that particular time. 

Education

Admissions

It is anticipated that the new Admissions Code and Admissions Appeal Codes will come into force on 1 February 2012, affecting the 2013/14 admissions intake.  These make a number of changes, including the ability of schools to increase their numbers without objection.

Consultations

The Department for Education is very active at present, with a number of consultations due to close shortly (see http://www.education.gov.uk/consultations/). The consultation on Academy Land Schemes closes on 18 January.  It is aimed at local authorities and relates to the Secretary of State's power to make schemes to transfer local authority land, which has been used for the purposes of a maintained school in the last 8 years but is no longer so used, to a free school or academy.  This would require local authorities to provide certain prescribed information (such as title information) to the Secretary of State. 

The consultation on revised exclusions guidance and regulations is open until 17th February 2012.  It reflects provisions of section 4 of the Education Act 2011 (not yet in force), which replaces Independent Appeal Panels with Independent Review Panels ("IRPS").  IRPs cannot direct the reinstatement of a pupil; where the IRP considers an exclusion decision to be flawed on judicial review principles, it can quash the decision and require governors to reconsider.  If the school does not then reinstate, it will be expected to pay a contribution towards alternative provision for that pupil. Parents will also be able to request the appointment of a SEN expert to advise the panel on how SEN may be relevant to the exclusion.  Where disability discrimination is alleged, the exclusion case can be taken to the First Tier tribunal.
 
Substantive legitimate expectations and barring

In R (on the application of W) v Secretary of State for Education [2011] EWHC 3256 (Admin) a Claimant teacher, Mr Wood, had been investigated following allegations of assault and indecency in 2000-2002.  Mr Wood was clearly notified by letter in 2005 that no further action would be taken in the absence of further misconduct.  There was no further misconduct.  In January 2009 the Claimant was informed that his case was being reconsidered as part of a Historical Cases Review (arising from general concerns about child protection cases), following which the Claimant was barred.  The Claimant did not appeal, but challenged the decision by judicial review on grounds that it was an abuse of power as it was taken in breach of a substantive legitimate expectation that he would not be barred, and/or that it breached his human rights to a fair hearing (article 6) and to respect for private life (article 8). 

The claim failed.  Whilst it was accepted that the Claimant had a substantive legitimate expectation based on the 2005 letter, it was found that the Secretary of State had both a legitimate aim and acted proportionately in deciding to reconsider the Claimant’s case.  There was an overriding public interest in protecting children, and it was proportionate: cases had only been reconsidered where there might be a current risk to children, and fair procedures (e.g. the right to make representations, an expert panel, and right to appeal any barring decision) were in place. In terms of human rights, the article 6 claim failed because that related to procedural fairness, and the real issue related to the barring decision.  It was accepted that the bar interfered with the article 8 right to private life, but this was found to be justified.

Personal Injury

In many local education authorities it remains part of the physical education curriculum for schoolchildren to be given swimming lessons. Often the solution has been for schools to take their pupils to the local council-run swimming pool to conduct the lessons.

The High Court case below reviewed the extent of duty of care on local authorities when injury is sustained at these premises.

Woodland v The Swimming Teachers' Association, Essex County Council and others [2011] EWHC 2631 (QB)

The claimant was a ten year old child who had attended a swimming lesson arranged by her school at a swimming pool run by Basildon District Council. During the lesson the claimant suffered a head injury which caused severe hypoxic brain damage.

The claimant, through her father, brought a claim in negligence against a number of bodies, including Essex County Council, the local education authority. The claimant alleged that the defendant had failed to act as a reasonable parent would have done.

The Council accepted that it owed a duty to the claimant to take the reasonable care that a reasonable parent would take, and to reasonably ensure that any contractors would be able to fulfil their duties. The Council denied any duty to ensure that reasonable care is taken by third parties to the extent that the Council would be responsible for any breach of care ('non-delegable duty of care').

The court agreed with the Council's arguments. Neither the lifeguard on duty nor the people running the swimming lessons were employees of the defendant. The accident did not occur on school premises or under the school’s control. To impose a non-delegable duty of care would involve a considerable expansion of liability beyond the standard of a reasonable parent. The appropriate duty was for the Council to take reasonable care that the contractors it hired had laid down safe and proper systems of work for their lifeguards, which the defendant had done.
 
Comment
There is a policy dilemma with the contracting out of work that public authorities may have previously performed using direct employed labour. In Australia the courts have recognised that in some circumstances a school authority may owe a duty not to just take reasonable care of a pupil themselves but also to ensure that reasonable care is taken by others. The distinction is that the Australian authorities have arrived at their judgments by looking at the position of the person to whom the duty is owed as opposed to looking at the position of the person owing the duty. To place a non-delegable duty of care upon local education authorities in respect of their pupils, as a policy decision at least, would be unduly burdensome.

Ashfords' Personal Injury Team has extensive experience in all areas of personal injury claims, ranging from accidents on public property or at work to road traffic accidents and clinical negligence.  If you have had a claim made against you and would like to discuss your options, please contact Flora Wood, Partner, on 01392 334020.

The end of the relaxation on the use of the accelerated restricted procedure

On 31 December 2011 the European Commission's authorised relaxation on the use of the accelerated restricted procedure, on the basis that acceleration benefits the economy, ended. This means that the accelerated restricted procedure is once again only available for situations in which urgency renders impracticable the time limits for the restricted procedure.

Contract set aside for immaterial considerations not specified in tender documents: Resource (NI) v Northern Ireland Courts & Tribunals Service [2011] NIQB 121

The Northern Ireland High Court has set aside a contract award decision where it held that the Northern Ireland Courts and Tribunal Service ("NICTS") made a manifest and serious error in taking into account immaterial considerations that were not specified in the tender documents.

In 2010 the NICTS issued a contract notice for the provision of security services and other services at court locations. The tender documents stated that the contract was to be awarded to the most economically advantageous tender based on specified criteria and sub-criteria. The tender documents explicitly required the bidder to collect cash at the various courts and deposit those monies on a daily basis. While the successful bidder stated that it would comply with this requirement, it made its bid more appealing by proposing a superior cash collection mechanism that it was uniquely positioned to offer.

In its judgement, the Northern Ireland High Court held that this additional piece of information had such a powerful effect on the NICTS that it "infected" it with impermissible influences, thereby prejudicing its objectivity and amounting to preferential treatment. In less florid language, the court recorded that the evaluation panel had failed to make its judgement based solely on "the evaluation criteria or information requested".

This case is significant for a number of reasons. First and foremost is the reminder that no matter how impressive a tender is in the optional extras, evaluation panels must make sure that they only judge submissions on the stated award criteria. A second lesson that can be learned from this case is the importance of keeping detailed records, as in this case the evaluation panel was unable to disprove the claims or convince the court of its position because it had failed to clearly state in its evaluation report that the additional information provided by the successful bidder was irrelevant to their considerations.

Finally, the remedy awarded in this case highlights the court's general unwillingness to go beyond a strict interpretation of their power to set aside contract award decisions. In the present case the unsuccessful bidder claimant not only argued that the contract should have been awarded to it, but went so far as to ask the court to make such an order. Avoiding the radical step of actually awarding a contract and sidestepping the more surgical proposal of requiring that only the tainted aspects of the tender be re-evaluated, the Northern Ireland High Court set aside the contract in its entirety.

Commission proposals for modernising public procurement

In December 2011 the European Commission adopted proposals for the modernisation of public procurement. The proposals include revisions to the Utilities Directive (2004/17/EC) and the Public Contracts Directive (2004/18/EC) and the adoption of a new directive for the comprehensive regulation of concessions. The objective of these reforms is to simplify the procurement process and make it more flexible in order to promote efficiency and ensure value for money. It is hoped that this will level the playing field for SMEs and facilitate the promotion of socially responsible procurement.

Proposals of note that will amend the Public Contracts Directive if adopted include:

• New amended definition of procurement: "the purchase or other forms of acquisition of works, supplies or services by one or more contracting authorities from economic operators chosen by those contracting authorities, whether or not the works, supplies or services are intended for a public purpose. An entirety of works, supplies and/or services, even if purchased through different contracts, constitutes a single procurement within the meaning of this Directive, if the contracts are part of one single project";

• Mandating two basic procedures that member states must make available: the open procedure and the restricted procedure;

• Permitting optional procedures that member states may use: a competitive procedure with negotiation, the competitive dialogue procedure and the newly created innovation partnership designed to embrace research and innovation; and

• The promotion of e-procurement in the form of mandatory transmission of notices in electronic form and fully electronic communication after a two year transition period.
  

The proposals have been passed to the European Council and the European Parliament for adoption. If adopted in the current year, the measures should be transposed by the member states in the second half of 2014.

Have your say on the Right to Buy

Social housing has hit the headlines on several occasions over recent weeks, with various consultation documents being published. One of the highest profile consultations relates to the Government's proposed amendments to the 'Right to Buy' and 'Preserved Right to Buy' schemes. The Government's aim is to boost home ownership for social tenants whilst maintaining the affordable housing stock and stimulating construction activity by the reinvestment of the Right to Buy sale receipts in house building.

The consultation suggests an increase in the discount purchasing tenants can receive to a maximum £50,000 discount, whilst maintaining the current 5 year qualifying period. The Government is inviting views on this proposal, and (amongst other things) on how the changes will impact on rural areas.

The consultation goes on to discuss the proposed changes to the accounting procedures in respect of Right to Buy sales and then at the plans to deliver one for one replacement of homes sold under Right to Buy. In respect of housing associations with Preserved Right to Buy tenants, the Government is keen to incentivise housing associations to use Right to Buy receipts for replacement homes. Proposals include giving associations who invest Right to Buy receipts in replacement homes priority for future funding and priority to extra funds in the Affordable Homes Programme.

This consultation is open until 2 February 2012. For further information and for details of how to respond the full consultation document can be found at http://www.communities.gov.uk/publications/housing/reinvigoratingrighttobuy

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