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Mathew McDermott discusses the recent Court of Appeal decision in James v Hertsmere BC [2020] EWCA CIV 489 and the 'contracting out' of review decisions pursuant to s.202 of the Housing Act 1996 James

Mathew McDermott discusses the recent Court of Appeal decision in James v Hertsmere BC [2020] EWCA CIV 489 and the 'contracting out' of review decisions pursuant to s.202 of the Housing Act 1996 James

What is the case about?

Hertsmere chose to ‘contract out’ their s.202 Housing Act 1996 ‘homelessness review decisions’ to a company called RMG. There had been a long delay between the review being requested and it being concluded. This delay was such that, by the time it was concluded, the 1-year written contract pursuant to which RMG undertook the review procedure had ended. Hertsmere argued that if a review had started during the life of the written contract (1 year) the s.202 decision was valid; the appellant argued that the review had to be both started and completed during the life of the contract.

Importantly, Hertsmere filed evidence in response to the s.204 appeal in the County Court stating that an officer had verbally extended the 1-year period in any event. There were later, as a result, arguments about whether this officer had the authority to do that, and also whether or not one could do so verbally (and not in writing). More importantly, it also served witness evidence from the Chief Executive saying he formally confirmed his approval of the extension for a year, as well as from the Leader of the Council saying he ratified both the initial contracting out to RMG (until 11 April 2018) and the extension (until 11 April 2019).

In the Court of Appeal, Hertsmere argued that challenges like these -- ‘contracting out’ challenges -- were not matters the County Court could hear, as they were not intrinsic to the review decision.

What did the Court decide?

This ‘jurisdiction issue’ has been ping-ponging around for a few years, and whilst Mr James’ appeal to the Court of Appeal was dismissed -- due to the content of the witness statements relied upon by Hertsmere - the Court (unanimously) held that:

"... the correct interpretation of s. 204 Housing Act 1996 is that a point of law arises from a decision if it concerns or relates to the lawfulness of the decision".

Following Nipa Begum this extends “...to the full range of issues that would otherwise be the subject of an application to the High Court for judicial review." (Per Peter Jackson LJ, paragraph 31) 


As such:

  • The County Court has jurisdiction to hear ‘contracting out’ arguments when hearing s.204 appeals (paragraph 31);
  • This review was commenced during the initial 1-year contractual period and that was all the contract in question required;
  • If this were wrong, however, the review decision was validly ratified by the Leader of the Council and by the Chief Executive (paragraph 46);
  • It is likely to be this point that is, for others interested in this decision, the most important: every case, especially those concerning clauses in contracts, is fact-specific but here the evidence on ratification by the Leader was ultimately seen as substance beating style;
  • Or to phrase this differently: it may be felt that this will lead to an increase in ‘contracting out challenges’ (and it could), but that is quite different to saying that there will be an increase in successful s.204 appeals as a result.

Mathew McDermott

Call 2008

Mathew McDermott

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