Care home providers win High Court battle with council over payments

A High Court judge has quashed a local authority’s proposed fees for providing care services, following a challenge by an association of independent care home operators.

In Torbay Quality Care Forum Ltd, R (On the Application Of) v Torbay Council [2014] EWHC 4321 (Admin) the claimants sought a judicial review of the local authority’s decision on 5 February 2014 setting a ‘usual cost’ figure in respect of the costs of care.

The figure was the amount which Torbay assessed as the normal cost of providing care home services for residents, and was the figure the authority was prepared to pay providers where it was responsible for the costs of care.

The claimants argued that:

1. the model on which the decision was based, specifically with regard to a staffing ratio calculation (staff hours required per patient), was mathematically flawed and was, thus, unreasonable; and
2. the decision was unreasonable as the model considered top-up fees paid by privately paying residents which were not relevant. This took into account costs in an unlawful manner and was contrary to Government guidance.

In turn Torbay argued that there had been no mathematical errors, and that the challenge to the staffing ratio calculation represented no more than a difference of opinion and approach.

The council also argued that it was entitled to take into account the fees paid by privately paying residents. The duty here, it suggested, was restricted to ensuring that those residents receiving state-funded care were not required to, themselves, top-up fees paid on their behalf.

His Honour Judge Lambert found for the claimants. The judge said: “With regret for the consequences, but with no real hesitation as to the principle I must honour I consider that the claimant's first ground is well made out.

“If the decision maker treads the path of economic modelling then it seems to me it cannot proceed with a model that is significantly flawed. I was careful to take into account the fact that one person's flawed mathematical model might be another person's best estimate. I took heavily into account the fact that the intensity and nature of the inquiry which is required of the local authority is primarily a matter for the decision maker.

“But if the local authority chooses to adopt a mathematical model some scrutiny of this is available on general public law principles. Those principles require, it seems to me, that wherever possible the merits of the decision remain with the decision maker.”

However, the judge said that in this case the merits of the decision were “so fundamentally flawed by adopting the unnecessary weighting which no-one can explain as being necessary that the decision to employ this falls fairly and squarely within the scope of judicial review as being a decision which no reasonable decision taker properly directing themselves on the facts could take”.

HHJ Lambert continued: “In the end no matter what epithet is used to describe the decision, whether it not adding up or being beyond the bounds of logic or all reasonableness the decision does, it seems to me, fall within that narrow band of decisions which can properly be the subject of judicial review.

“The deployment of the weighted average makes no sense in the first place and has no reasonable application in the model. There may, perhaps, have been some explanation for this but there is none which I can now scrutinise. The presence of an inexplicable weighting within the mathematical model shows it to be a matter of fact which no reasonable decision taker could properly take into account.”

The judge said he also found the second ground to be made out. “Adopting all the cautions I have applied to my decision on ground 1 I cannot, with the best will in the world, see that the defendant provides any justification for departing from the plain wording of the [Department of Health] Circular.

“Guidance is, of course, just that and a decision maker is free to depart from it if there is a good reason to do so and if the decision maker articulates that particular reason. What the decision maker, it seems to me, cannot do is to say ‘I shan't comply with the guidance because I don't agree with it.’ Nor can the decision maker fail to take into account the guidance because it considers its duty lies elsewhere. Whilst referring to best value principles the guidance is utterly explicit as to what can and cannot properly be taken into account.”

HHJ Lambert said Torbay’s approach in this case failed to take any proper account of the guidance concerned and therefore failed to take into account a highly relevant matter.

“On the facts of this case I am convinced…..that taking these fees into account in the cost analysis does not pay due regard to actual cost and amounts to a significant error in the decision making process,” he added.

The judge also said he did not consider that this was an exceptional case where he should refuse to grant relief under Section 31(6) of the Senior Courts Act 1981. He quashed the original decision and remitted the matter to the council for further consideration and redetermination.