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Libel News: Care companies bring action against Rochdale Council Leader

Rochdale MBCTwo care companies have issued libel proceedings against Rochdale Council and its Labour leader Colin Lambert after he said that the borough was the “wrong place” to put vulnerable youngsters in private care and that their safety was not being “guaranteed”.  The remarks were made last year after nine men were convicted for the illegal grooming of under age girls for sex in Rochdale.

Mr Lambert was widely quoted at the time as saying that the borough’s 41 privately-operated care homes were failing to protect the young people they are looking after.  He said

“This is a scar and a disgrace on the country’s record of looking after its most vulnerable children.  The council doesn’t know anything about the children who are sent to Rochdale and we do not know what is going on inside those care homes and have no right to find out.  … Host councils do not ask if the needs of child are being met by the contract that they sign with the private care home operator.  Rochdale borough, at the moment, in the current climate, is the wrong place to send these children, yet host authorities are doing exactly this”.

Meadows Care Ltd and Pathfinders Childcare Ltd have filed a joint High Court claim alleging that Councillor Lambert’s comments damaged the reputation of both companies.  They contend that the words meant that the homes which run in Rochdale, which have been highly rated by Oftsed, were “dangerous, unsafe and damaging both to vulnerable children and society”

The claimants say that Lancashire and North Yorkshire county councils, the metropolitan boroughs of Calderdale, Doncaster, Kirklees, Rotherham and St Helens and the London Borough of Ealing stopped placements in Rochdale as a result of Councillor Lambert’s remarks.

The two claimants contend that they lost business worth more than £400,000 from eight local authorities. It said that Meadows lost £260,000 as a result of the remarks while Pathfinder is said to have lost £156,000.

There are reports of the action in Rochdale News and on the BBC Website.

Speaking on Mr Lambert’s behalf, Linda Fisher, deputy chief executive at Rochdale Borough Council said:

“The council is taking the matter seriously and the action will be defended.

The claimants’ solicitor, Mark Manley told Local Government Lawyer

“Before issuing proceedings we requested that Councillor Lambert retract his comments and apologise but he was unwilling to do either and his comments are highly damaging, inaccurate and have cost my clients significant sums of money.

They are therefore determined to vindicate their reputations and in the absence of the serious allegations being retracted they were left with no alternative other than to seek redress from the courts.”

The claim raises a number of interesting legal issues.

First, there is the question of reference.  Although it appears that Mr Lambert did not mention the claimant companies by name, his quoted words do appear to relate to all privately run care homes in Rochdale – which would, therefore, have covered those operated by the claimants.  Whether this is sufficient to refer to the claimant is a difficult question on which we cannot express any view without having seen the way the case is put.

Secondly, and more interestingly there is the question of “public functions”.  The two claimants were private corporations – but they may have been carrying out public functions. Under the principle in Derbyshire v Times Newspapers, public bodies cannot sue for libel.  An unsuccessful amendment to the Defamation Bill sought to extend this principle to any corporation performing a public function.  The proposed clause (rejected by the House of Commons and not forming part of the Defamation Act 2013) provided that

“Non-natural persons performing a public function do not have an action in defamation in relation to a statement concerning that function”.

In a blog post last week, libel reform campaigner David Allen Green, condemned the Government for refusing to accept this amendment.  He argued that

“The extension of the so-called Derbyshire principle to private companies providing public functions was an important modernising measure.  Under the Derbyshire principle, public bodies cannot sue for libel, as a matter of law.  The actual case was in respect of a statutory corporation, but the principle has been developed to cover all public bodies, whatever their legal basis.  It even now covers political parties.  But the principle does not apply to the forms of outsourced services unimaginable in 1989 when the facts of Derbyshire occurred.

This means that companies (often with lucrative payments of taxpayers’ money) performing public functions can scare off critics with the threat of libel proceedings, which simply could not be possible if they were public bodies.  This, of course, is unacceptable. Free and frank criticism of the  performance of public functions by private companies should be uninhibited for the same reasons criticism of public bodies should be”.

The position is arguably not as clear as David Allen Green suggests.  There are good public policy reasons for preventing public corporations stifling criticism by means of libel actions.  Public bodies are subject to democratic oversight and scrutiny and the validity of criticisms of their operation can be tested in the appropriate democratic forum.  The courts are unnecessary.  Furthermore, public bodies do not usually trade and have no “commercial reputation” to protect.  The citizens of Derbyshire are not going to look for alternative providers of public services if they read criticism of Derbyshire County Council in the press.

But the position may be different in relation to companies providing “outsourced” functions.  They are commercial concerns with commercial reputations and businesses to run.  If the amendment had been passed then such a company would, if falsely accused of wrongdoing in the press or elsewhere, have had no remedy (save in the highly unlikely event that the critic could be proved to be malicious).

This claim may be a case in point.  If, on analysis, it turns out that the leader of Rochdale Council did wrongly condemn the claimant care home providers as providing an inadequate standard of care – and there is no libel defence available to the Council – then it is difficult to see why the claimants should not be compensated for any losses suffered.

It is clear that criticism of those performing public functions is a valuable form of speech which requires clear and robust protection.  It is less clear that such bodies should be wholly deprived of any possible remedy in libel, however bad and unjustified the criticism turns out to be.

2 Comments

  1. Rights Lawyer

    One thing that the post doesn’t consider is whether the Courts would expand the common law Derbyshire principle to cover outsourced public services. If the principle extends to political parties then why not to companies like Group 4 or Serco?

    • INFORRM

      This is an interesting point. There seems to be quite a strong public policy in favour of encouraging unfettered criticisms of this kind of company but granting a complete immunity may be problematic.

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