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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Broadway Care Centre Ltd, R (on the application of) v Caerphilly County Borough Council  EWHC 37 (Admin) (19 January 2012)
Cite as:  EWHC 37 (Admin)
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QUEEN'S BENCH DIVISION
Cardiff Civil Justice Centre
2 Park Street
B e f o r e :
(sitting as a Judge of the High Court)
| THE QUEEN ON THE APPLICATION OF
BROADWAY CARE CENTRE LIMITED
|- and -
CAERPHILLY COUNTY BOROUGH COUNCIL
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400 Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
Stephen Knafler Q.C. (instructed by Caerphilly County Borough Council) for the Defendants
Hearing Date: 9th Janaury 2011
Crown Copyright ©
HIS HONOUR JUDGE SEYS LLEWELLYN Q.C:
(i) Is the decision of the Defendant to terminate the contract amenable to Judicial Review?
(ii) Does the Claimant have standing to seek Judicial Review in order to protect, or relying upon, the residents' Article 8 rights? In particular is it entitled to assert that the Defendant owes to the residents duties in public law that restrict the entitlement of the Defendant to terminate the contract between it and the Claimant?
(iii) If so what duties are owed and is it arguable, or the case, the Defendant is in breach of any duties owed to residents, in such a way as to entitle the Claimant to the relief which it seeks?
(iv) Did the Defendant fail to give the Claimant prior notice of its intentions and/or an adequate account of its reasons, such that the decision was procedurally unfair (and, the Claimant would add, and/or such that the Claimant was deprived of an opportunity to remedy the situation)?
(v) was the decision to terminate the contract flawed by failure to implement, or to take account of, the regulatory framework for "closure" of a home such as this?
(vi) does termination of that contract engage the rights of the Claimant under Article 1 and if so do the acts and omissions of the Defendant in terminating the contract in circumstances amount to a breach of that right?
Authority to terminate.
The scope of the grounds of Claim.
The Contractual and Statutory Framework.
"(a) if either party considers the other party is in default of their obligations under this Contract they shall write to the other party stating the nature of the default. A review meeting will be held between the Provider and the purchaser's appropriate officer to identify a joint plan of action to remedy the
(b) where a dispute can not be resolved at such a review, the Provider may request the Director of Social Services to undertake a further review.
(c) it is the responsibility of the party deemed at fault to remedy the situation at no extra cost to the other party and to meet any resulting costs arising directly from the default".
"(a) either party to this Contract has the right to terminate this contract on giving 6 months notice in writing to the other party…..
(d) if the Provider
(i) commits a serious breach of its obligations under the Contract….. then in such circumstances the Purchaser may, without prejudice to any accrued rights or remedies under the Contract terminate the Contract by notice in writing having immediate effect and take action to enforce any rights arising to the Purchaser under the Contract……
(f) if the Provider commits a minor and persistent breach of its obligations under the contract the right to terminate only arises if the Council has complied with the provisions under Clause 15 hereof.
Statutory provisions and guidance..
National Assistance Act 1948 (Choice of Accommodation) Directions 1993
" Permanent placement in a care home needs careful consideration by the patient and carers as well as advice from health and social care professionals…..
2.2 If the individual concerned expresses a preference for particular accommodation ("preferred accommodation") within the UK the Local Authority must arrange for care in that accommodation provided that:
The accommodation is suitable in relation to the individual's assessed
needs…..The accommodation is available;…..
3.7 accommodation will not necessarily be unsuitable simply because it fails to conform to the Authority's preferred model of provision or to meet to the letter a standard specification laid down by the Authority……
and, in particular says the Claimant,
5.1 "individuals already placed by an Authority in a care home…. have the same rights as those yet to be placed by the Authority. Their needs should be assessed using the Unified Assessment Process….. The individual should not be….. expected to move from the care home if the assessment process has identified that a move to alternative accommodation poses a risk to the individual's care and wellbeing".
Purpose of guidance
1. This statutory guidance addresses the management of escalating concerns with, and closures of, care homes that are registered with the Care and Social Services Inspectorate Wales (CSSIW) to provide services to adults, including those providing nursing care…..
2. Escalating Concerns arise where there are accumulating issues relating to the operation of, or quality of care provided in, a registered care home providing services to adults……
4. The safety and wellbeing of service users is paramount. In circumstances where a failure in provision of care which causes suffering is indentified this is adult abuse which is a breach of the duty of care and could amount to a criminal offence being committed by the home.
5. Escalating concerns will warrant proactive or reactive intervention from those commissioning such services, possibly from one or more commissioning agencies, designed to improve the quality of services and, where possible, prevent what might be avoidable home closure.
6. Where abuse is suspected the policy and procedures to protect vulnerable adults must take precedence. The overriding objective should be to ensure the safety of vulnerable service users. In many situations it will be in the best interests of service users to use the escalating concerns procedure alongside the adult protection procedures in an effort to keep the home open. In such situations, clear communication between staff and agencies involved in both processes is essential…..
Legal duties in relation to closures
11. When home closures occur, working with service users and their families or other representatives to identify, prepare for and make the transition to a new home requires the key information is provided and constantly updated……
13. Enshrined in the Mental Capacity Act 2005 is the principle that people have capacity unless otherwise proven. Even when their capacity may be limited, they may still be able to make some clear choices or decisions. The Act emphasises the importance of supporting incapacitated service users to make decisions and has created a statutory entitlement to advocacy through specialist Independent Mental Capacity Advocates (IMCA's)….. the legislation requires Local Authority's to refer individuals to the IMCA's service where decisions about a change of residence is required……
Choice of accommodation
14. Local Authority's are reminded that the National Assistance Act (Choice of Accommodation) Directions 1993 will apply where individuals are moving location as a result of a home closure…….
15. In circumstances where a service user is currently accommodated in a home whilst waiting for a placement in their home of choice, local agencies must:When undertaking a needs and risk assessment, determine the potential impact a further temporary move may have upon the individual's health and wellbeing……
Accountability Roles and Responsibilites
17 It is important that managers and their agencies understand that this Guidance does not replace or interfere with existing statutory duties, functions or obligations. Additionally this guidance does not require local agencies to undertake any responsibility or functions which are currently managed by CSSIW.
Local Authority and Health Services working reactively and proactively with service providers
31. Health and Social Services need to ensure they work towards preventing escalating concerns developing, and potentially home closures occurring whenever possible…..
35. Local agencies will need to ….. work with registered providers to ensure that they understand why a [Development Action Plan or Corrective Action Plan] has been initiated and to establish the reasons for this, what improvements are required and by when, how the plans will be monitored and by whom and what criterion will be used to suspend or remove the need or requirement for an action plan continuing to be maintained. ……..
44. The use of CAP's and DAP's do not replace compliance notifications instituted by CSSIW. It is critical that agencies understand their distinctive roles and responsibilities in respect of poor performance and/or breaches in regulations or standards. Local Authorities and Health Services must act within the sphere of their own roles and responsibilities. For example they can take specific action in terms of breach of contract or poor performance where necessary…..
47. There must be a clearly evidenced rationale for usage of embargos. Application of an embargo would be open to challenge through Judicial Review. The use and removal of embargos, or indeed cancellation of a contract, must be linked to a thorough risk assessment which has been considered as part of the multi agency framework".
The emphasis in bold above is supplied by the Claimant; to this I have added emphasis in italics.
Issue (i) Is the Defendant's decision to terminate the contract amenable to Judicial Review?
"If an outside contractor is engaged on ordinary commercial terms to provide cleaning services, or the catering and cooking services, or any other essential services at a Local Authority owned care home, it seems to me absurd to suggest that the private contractor, in earning its fee for its business services, is publicly funded or is carrying on a function of a public nature. It is simply carrying on its private business with a customer who happens to be a public authority. The owner of a private care home taking Local Authority funded residents is in no different position. It is simply providing a service for which it charges a commercial fee".
"s145(1) A person ("P") who provides accommodation, together with nursing or personal care, in a care home for an individual under arrangements made with P under the relevant statutory provisions [as here] is to be taken for the purposes of sub section (3)(b) of Section 6 of the Human Rights Act 1998 to be exercising a function of a public nature in doing so".
Section 6 of the Human Rights Act 1998 provided (and provides) as follows:
"s6(1) It is unlawful for a Public Authority to act in a way which is incompatible with a Convention right.
(3) In this Section "Public Authority" includes –
(b) any person certain of whose function are functions of a public nature".
(ii) Does the Claimant have standing to seek judicial review in order to protect, or relying on, residents' Article 8 rights?
"So far as the Council is concerned it is a public body and as such, where it makes a decision which may result in the removal of a vulnerable person from their home, with the potential associated stress, distress and adverse impact on his or her health, then that engages Article 8 of the European Convention on Human Rights; and removal may constitute an interference with those rights such that it would be allowed only if the removal is proportionate and justified in pursuit of a legitimate public aim (Watts –v- UK 2010 51EHRR SE5 Application No. 53586/09) at paragraph 97; and Manchester City Council –v- Pinnock 2010 UKSC45 at paragraphs 45 and 51-52). In making its decisions in relation to Section 21, the Council is required to bear that in mind and make the appropriate proportionality balancing exercise where necessary. The Claimants, as the owners of care homes in which the residents reside, have an interest in seeking to protect those Article 8 rights (Greencorns Limited –v- Claverley Group Limited 2005 EWHC 958 (QB)."
"However it cannot be right that a Claimant suing a public body for breach of contract, who is dissatisfied with the remedy awarded him by private law, should be able to invoke public law simply because of his dissatisfaction, understandable though it may be. If he could do so it would place a party who contracts with a public body in an unjustifiably more privileged position than a party who contracts with anyone else, and a public body in an unjustifiably less favourable position than any other contracting party.
Equally importantly, it appears to me that it would be wrong in principle for a person who would otherwise be limited to a private law claim to be entitled to base his claim in public law merely because private law does not afford him a sufficiently attractive remedy."
He had also said,
"35. The fact that a contractual obligation is framed by reference to a statutory duty does not, in my view, render that obligation a public law duty."
"38. Thus the mere fact that the party alleged to have been in breach of contract is a public body plainly cannot on its own transform what would otherwise be a private law claim into a public law claim. There are, of course, circumstances where in a contractual context a public body is susceptible to public law remedies. However where the claim is fundamentally contractual in nature, and involves no allegation of fraud or improper motive or the like against the public body, it would at least in the absence of very unusual circumstances, be right, as a matter of principle, to limit a Claimant to private law remedies". (Neuberger, LJ at paragraph 38, emphasis supplied).
Moreover whether a litigant has a sufficient interest in an alleged breach of public law duty is not a discretionary question but
"a mixed question of fact and law; a question of fact and degree and the relationship between the (Claimant) and the matter to which the application relates, having regard to all the circumstances of the case" (RVIRC 1982 AC617 at 659A).
(i) this is not a case where if the Claimant did not have standing, no one else would :namely the residents or their representatives, and in the ordinary course, the existence of directly affected persons able to litigate is a strong indication that the Claimant should not be treated as having standing; (ii) provisions of the Mental Capacity Act 2005 particularly Sections 35, 36 and 39 in effect require the Local Authority to appoint an Independent Mental Capacity Advocate ("IMCA") when it proposes to make arrangements for change in the residential accommodation of an incapacitated adult if satisfied that there is no person other than [the care provider] whom it would be appropriate for them to consult in determining what would be in [his] best interests; (iii) the Claimant company clearly would not be appointed as a Litigation Friend for any of the residents, as would be necessary for proceedings on their behalf, for such can be appointed only if the litigation friend can conduct proceedings fairly and has no interest adverse to the protected party.
(The Defendant also draws attention to Regulation 20(3) of the Care Homes (Wales) Regulations 2002, "the registered person shall ensure so far as practicable that persons working in the care home do not act as the agent of the service user". However, that may be directed to protecting the possessions and or assets of vulnerable adults as against the individuals with whom they come into contact who are working in the care home, as opposed to steps taken by the care home itself).
(i) they lack sufficient mental capacity and would be protected parties subject to the CPR 21 Procedure; (ii) in the absence of a deputy or attorney under a registered Lasting Power of Attorney, a suitable Litigation Friend would have to be identified, whether an IMCA or a relative, who would have to take the necessary steps under CPR 21; (iii) it is unlikely that any resident/family would be able to fund litigation privately and/or it would be necessary to rely on Legal Aid; but in particular (iv) the speed with which action was required and the intervention of the Christmas and New Year break meant that taking these steps and time was unrealistic.
Section 7(1) Human Rights Act 1998
"a person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by such Section 6(1) may –
a. bring proceedings against the Authority under this Act in the appropriate Court or Tribunal or
b. rely on the Convention right or rights concerned in any legal proceedings,
but only if he is (or would be) a victim of the unlawful act.
"the Registered Person [the Care Home] shall so far as practicable enable service users to make decisions with respects to the care they are to receive and their health and welfare".
"11.1 the Registered Person ensures that service users have their legal and civic rights protected, are able to exercise their legal rights directly and participate in civic process if they wish.
a. Where service users lack capacity, the registered person facilitates access to advocacy services".
(iii) If there were standing , what duties are owed and is it arguable, or the case, that the Defendant is in breach of duties owed to residents, in such a way as to entitle the Claimant to the relief which it seeks?
"We have been instructed to write to you again in relation to the contract between you and Caerphilly CBC in relation to Hillside Care Home.
We have been made aware of a serious breach of your contract with Caerphilly CBC, which has involved neglect of residents. This includes but is not limited to, two recent POVA (Protection Of Vulnerable Adults) referrals for neglect that have shown that despite severe weight loss and concerns about medication and nutrition, no referrals to appropriate health service were made. In light of the serious breach we are entitled to terminate the contract with immediate effect under Clause 18. Our Social Services Department will be in contact with you in respect of interim arrangements with the respect for the homes.
This breach is in addition to ongoing minor and persistent breaches, which you have been made aware of as a result of the contract for meeting you attended on 15th July 2011, and the action plan that was provided to you. Neither the action plan nor the 4 outstanding Compliance Notices from the Care and Social Services Inspectorate for Wales (CCSIW) have been complied with: this is also a clear breach of the contract. This would also entitle us to terminate the contract under Clause 18. As you will be aware the individual care plans form part of the contract (under Clause 5(c)) please therefore also accept this as their termination. Clause 6(e) of the care plan contracts also entitles us to terminate the agreement on the grounds that there are serious concerns of the wellbeing of the residents".
The letter proposed a continuity period of 2 to 3 months depending on the residents that remained at the home, to allow a smooth transition for residents.
(i) At the meeting of 15th July 2011 between the Claimant and the Defendant, referred to in the letter of confirmation, there was no notice of contemplated termination of the Contract, and on the contrary the Claimant was given to understand that it was the Defendant's intention to maintain it.
(ii) There was not adequate investigation or sufficient evidence to justify termination of the contract without notice (or at all).
(iii) There was an implied duty to consult with (a) the residents or their representatives and (b) the Claimant prior to taking the decision to terminate
(iv) The Defendant cannot reasonably have had concerns such as warranted termination without notice, where beyond July 2011 it continued to refer residents to the home, and/or following the meeting of July 2011 the Defendant did not send to the Claimant an Action Plan specifying matters for development or correction until 21.10.2011; and it was contended by Counsel for the Claimant in oral argument that the Defendant needed to tell the Claimant in the Action Plan what was the order of priority for dealing with that which ought to be brought up to standard.
(v) There may have been system failures, but those went to matters of incomplete or inadequate written records, or reporting to the Local Authority, and the Claimant does not accept in these proceedings that systems failures led to serious harm to residents.
(vi) In respect of the two recent POVA's for neglect to which reference is made in the letter of termination, close examination of the records and evidence will show that whether or not the Claimant's records were complete in respect of those residents, no harm came to them; paperwork not being up to standard is not a rationale for closure of a home.
(vii) The Claimant was able to show that several residents, or their relatives, were disappointed by the prospect of a move from this home in consequence of the Defendant's termination of the contract, and/or approving of the care which the resident had received at the home, and/or that there was perceived pressure on the part of Social Workers in discussions to regard a move as desirable or imminent.
In addition, as reflected in the Amended Grounds of Claim, the Claimant contended that in reality the decision to terminate the contract was taken on 30th November 2011. This arose from a minute of an internal meeting held on that date within the Local Authority
"Meeting held between Dave Street and the Service Managers where the serious concerns were discussed and weighed against the risk to residents of moving them. The disruption to relatives/residents of moving them before Christmas or the risks of them being in the home over Christmas with the concerns was considered. These risks were weighed up and considered to be serious. It was considered that the two POVA referrals highlighted a serious breach and in light of the competency issues that there are with the manager and the potential serious consequences of medical referrals not being made. The alternative provisions for the residents at the home and practical considerations was discussed in detail. It was agreed that a full assessment would be needed in relation to each individual residents capacity and following on from that a meeting with each relative. It was decided that the decision to terminate should not result in the immediate removal of residents, as this would not allow for the best way to manage process for relatives instead a planned procedure of a period of three months was suggested whereby the needs and wishes of each resident could be ascertained before they were moved. It was acknowledged that this would require the co-operation of the Home, as once the contract was terminated they would not be required under the contract to care, other than the requirements of the Care Standards."
The meeting of 15 July 2011.
"AP [Solicitor for the Local Authority] confirmed that with regard to recommendations made by us, the Authority would assist SB [Mr Bamrah, the owner] to complete these, however with regard to any requirements not completed, this would result in a breach of the contract. AP further stressed that the default clearly states both parties must work together and this clearly has not been done.
AC [Solicitor for the Claimant] requested clarification from AP whether the Authority felt SB was in breach of the Contract. AP explained that SB was potentially in breach of the Contract due to the default therefore an Action Plan was required. AP observed that the monitoring reports provide evidence of potential breaches, which necessitates both parties working together hence the reason for this meeting being called today.
AC noted that SB had advised her that a number of issues had been corrected since the last monitoring visit. VD [Vivienne Daye Commissioning Service Manager for the Local Authority] suggested that a further monitoring visit was required and highlighted progress to date as follows:
December 2010 – outstanding issues remaining.
April 2011 – further issues raised.
June and July 2011 – Compliance Notices issued by CSSIW".
"As you will be aware, the Contract Monitoring Officer assessed your compliance and provided you with a report dated 16th December 2010. This report highlighted a number of quality issues and asked you to take action in respect of them within 2 months; these issues remain outstanding to date.
A meeting was held between yourself and relevant service managers on 23rd March 2011 to discuss the ongoing concerns in relation to the quality of service at home. A further contract monitoring report dated 6th April 2011 (also enclosed) identified that the issues remained outstanding. You were sent this report and you were asked to provide a written response by 20th April 2011. To date you have not provided this response……
On 18th May 2011 the Service Manager wrote to you confirming that the response with regards to the safeguarding issues were satisfactory, but that the quality issues remained outstanding. A new date for the Contract Default meeting was arranged [Mr Bamrah did not attend, but this appears to have been because of a mis-addressed letter]……
As you will be aware, this is not the first time quality issued have been raised, as the home went through out Provider Performance Procedure in both 2007 and 2009. This shows our commitment to improvement and the number of opportunities you have been given to improve. Clause 15(d)(c) of the Contract states
"It is the responsibility of the party dealing with that fault to remedy the situation at no extra costs to the other party and to meet any resulting costs arising directly from the default".
If you do not co-operate with us in relation to the default, we will have no option but to enforce this Clause and to seek that you pay the costs of any action.
We are also very concerned about the management arrangements you have in place at the home, as we understand that there is still no registered manager".
"The tone of Ms Powell's report [the Monitoring Officer for the Local Authority in respect of this home] contrasts markedly with the tone of the letters of 4th and 21st April 2011, and your letter of 6th July 2011. It is not clear to me, reading these documents as would a court, whether the Council is alleging 'serious breach' or 'minor and persistent breach, or both, and precisely in relation to which contractual requirements. It also seems to me that neither the letter of 21st April 2011 nor your letter of 6th July 2011 are sufficiently clear as to the "nature of the default" required by Clause 15(a) of the Contract".
(i) The minutes of the meeting themselves are headed, in bold, "MINUTES OF CONTRACT DEFAULT MEETINGS".
(ii) The letter dated 6th July 2011 from the Local Authority had stated, and clearly given warning, as to defaults which had been identified and yet remained outstanding, and those which needed current corrections.
(iii) The context of the meeting was that this care home had been in the ownership and control of the Claimant since 2006. It was the responsibility of the Claimant to identify and remedy any defaults, and bring the home if necessary up to the required standard. The letter dated 6th July 2011, from the solicitor for the Defendant, had identified defaults and the fact that they remained despite two periods of prior support for the home.
(iv) Nothing in the minutes suggests that the local authority considered that the defaults it alleged in its letter of 6th July 2011 had disappeared or been corrected.
In my judgment, the minutes of 15th July 2011as a whole, and read fairly, demonstrate concern on the part of the Local Authority as to continuing defaults. In context, it is irresistible that it considered that there were continuing defaults.
General approach of the court in its supervisory jurisdiction.
"where the existence or non existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debateable to the just conceivable, i It is the duty of the Court to leave the decision of that fact to the public body to whom Parliament has entrusted the decision making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely (Puhlofer R –v- Hillingdon LBC 1986 AC484 518 D-E).
(I note that more recently, in a community care case Hallett, LJ said "those remarks may have been directed at a different statutory function in a different era, but to my mind, they are as pertinent today as they were in 1980" (R (Ireneschild) –v- Lambeth LBC 2007 EWCA Civ 234 at paragraph 44).
"Social Workers have been allocated to work with each resident whose needs will be reassessed including any specialist assessments that are required, e.g. mental health, moving and handling, behaviour, medication etc. These are being undertaken by other professionals such as community nurses, community psychiatric nurses, occupational therapists, etc. It is important to note that there are existing assessments, risks assessments and care plans in place.
The assessment includes the views of the resident, family, care home staff, other specialist assessors, and any other relevant person in compliance with Unified Assessment Guidance…….
Known or anticipated issues in relation to the actual move of an individual is included in the care plan and discussed with the new care home staff………
It is important to note that individuals moving from one care home to another is a frequent occurrence in a Social Workers case load. Individuals can move from one home to another for a variety of reasons e.g. choice, existing care home unable to manage their needs, people needing alternative categories of care due to a deterioration in their health etc. (Paragraphs 40 to 43)."
"The risk to the residents remaining at the Home had to be carefully weighed against the risks and disruption caused in moving them".
Did the Defendant fail to give the Claimant prior notice of its intentions and/or an adequate account of its reasons, such that the decision was procedurally unfair (and, the Claimant would add, and/or such that the Claimant was deprived of an opportunity to remedy the situation)?
"It may be the litigation at least in its early phase concentrated the minds of Local Authorities on the nature and extent of their duties towards care home residents who had to be relocated; but there has been no evidence before the Courts in recent Applications of which we have knowledge that these duties are being either ignored or violated. Nothing is wholly without risk, but so long as Councils do the best that can professionally be done to minimise the risks to frail and elderly people in their care, the law has no immediate role to play" (R (Turner) –v- Southampton CC 2009 EWCA Civ 1290 at paragraph 32).
The Claimant's asserted rights under Article 1 of the First Protocol of the Convention.
Amendment to pursue Public Law view of termination of individual care plan
Injunctive relief in Queen's Bench contractual proceedings.
Interim relief pending judgment.