Contracting Out of the Provision of Welfare Services to Private Actors and Liability Issues

The article discusses liability issues related to the contracting out of welfare services. It focuses on the possible liability of the private actor and of the public entity towards the individual (the citizen) for non-performance or malperformance of the welfare service. It is argued that since there is no contract between the individual and the private service provider there may be several obstacles to a claim against the private service provider based on contract. At the same time it is a general tort law principle that there is no vicarious liability for independent contractors, making it difficult also to succeed with a claim against the public entity based on tort law. Thus, a liability gap seems to exist. However, the article demonstrates that there are signs in different jurisdictions that solutions are being found in case law to this problem allowing to some extent for the imposition of some kind of vicarious liability on the public entity. Four different models are identified. The reasoning behind these models varies but they all have in common that the public law nature of the service that has been outsourced somehow plays a role.