R Advinia Health Care Ltd v Care Quality Commission
| Jurisdiction | England & Wales |
| Judge | Mr Justice Butcher |
| Judgment Date | 27 April 2022 |
| Neutral Citation | [2022] EWHC 965 (Admin) |
| Docket Number | Case No: CO/1770/2021 |
| Court | Queen's Bench Division (Administrative Court) |
[2022] EWHC 965 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HON Mr Justice Butcher
Case No: CO/1770/2021
Fenella Morris QC and Jack Anderson (instructed by Browne Jacobson LLP) for the Claimant
David Blundell QC and Admas Habteslasie (instructed by Central Legal Services Team, Care Quality Commission) for the Defendant
Hearing date: 30 March 2022
Approved Judgment
THE HONOURABLE Mr Justice Butcher
This is an application for judicial review made by Advinia Health Care Ltd (‘Advinia’), of the revised Guidance for providers published by the Defendant, the Care Quality Commission (‘CQC’), in relation to Market Oversight of ‘difficult to replace’ providers of adult social care.
Advinia is a registered provider of social care. The CQC is the independent regulator of health and social care services in England.
The CQC was established by the Health and Social Care Act 2008 (‘the 2008 Act’). Section 2 sets out the CQC's functions, which include its market oversight functions.
Section 3(1) of the 2008 Act identifies the CQC's main objective as being to ‘protect and promote the health, safety and welfare of people who use health and social care services’. Section 3(2) is as follows:
(2) The Commission is to perform its functions for the general purpose of encouraging—
(a) the improvement of health and social care services,
(b) the provision of health and social care services in a way that focuses on the needs and experiences of people who use those services, and
(c) the efficient and effective use of resources in the provision of health and social care services.
Section 4(1) of the 2008 Act sets out a range of matters to which the CQC must have regard in performing its functions:
‘(a) views expressed by or on behalf of members of the public about health and social care services,
(b) experiences of people who use health and social care services and their families and friends,
(c) views expressed by Local Healthwatch organisations or Local Healthwatch contractors about the provision of health and social care services,
(d) the need to protect and promote the rights of people who use health and social care services (including, in particular, the rights of children, of persons detained under the Mental Health Act 1983, of persons who are deprived of their liberty in accordance with the Mental Capacity Act 2005 (c 9), and of other vulnerable adults),
(e) the need to ensure that action by the Commission in relation to health and social care services is proportionate to the risks against which it would afford safeguards and is targeted only where it is needed,
(f) any developments in approaches to regulatory action, and
(g) best practice among persons performing functions comparable to those of the Commission (including the principles under which regulatory action should be transparent, accountable and consistent).’
The CQC's Market Oversight Regime was introduced by the Care Act 2014 (‘the 2014 Act’). The relevant provisions of the 2014 Act were in part a response to the failure of Southern Cross Healthcare in 2011, and had been preceded by a Department of Health Consultation (entitled ‘Market Oversight in Adult Social Care’) published on 1 December 2012, and an Impact Assessment dated 26 March 2013. The Market Oversight Regime which was introduced by the 2014 Act applies to providers of care services who, by reason of their size or concentration, would be particularly difficult to replace in the event of failure. The relevant criteria are contained in The Care and Support (Market Oversight Criteria) Regulations 2015 (SI 2015/314), made under section 53 of the 2014 Act.
The 2014 Act establishes a framework designed to respond to the risk of failure of care providers by two mechanisms.
One of those mechanisms is a duty imposed on relevant local authorities by section 48 of the 2014 Act. Under that section, where a registered care provider becomes unable to carry on a regulated activity because of business failure, the relevant local authority comes under an obligation to meet all the needs for care and support of adults (as well as the support needs of carers) that were being met by the registered care provider immediately before it became unable to carry on the regulated activity. By section 48(3) it is specifically provided that this obligation on the local authority arises whether or not the adults in question are ordinarily resident in its area.
The other mechanism is the Market Oversight Regime. This is provided for in sections 53–57 of the 2014 Act. Of particular relevance are sections 55–57, which, so far as germane, are as follows:
55 Assessment of financial sustainability of care provider
(1) Where this section applies to a registered care provider, the Care Quality Commission must assess the financial sustainability of the provider's business of carrying on the regulated activity in respect of which it is registered.
(2) Where the Commission, in light of an assessment under subsection (1), considers that there is a significant risk to the financial sustainability of the provider's business, it may—
(a) require the provider to develop a plan for how to mitigate or eliminate the risk;
(b) arrange for, or require the provider to arrange for, a person with appropriate professional expertise to carry out an independent review of the business.
(3) Where the Commission imposes a requirement on a care provider under subsection (2)(a), it may also require the provider—
(a) to co-operate with it in developing the plan, and
(b) to obtain its approval of the finalised plan.
(4) Where the Commission arranges for a review under subsection (2)(b), it may recover from the provider such costs as the Commission incurs in connection with the arrangements (other than its administrative costs in making the arrangements).
(5) Regulations may make provision for enabling the Commission to obtain from such persons as it considers appropriate information which the Commission believes will assist it to assess the financial sustainability of a registered care provider to which this section applies.
(6) Regulations may make provision about the making of the assessment required by subsection (1).
(7) The Commission may consult such persons as it considers appropriate on the method for assessing the financial sustainability of a registered care provider's business; and, having done so, it must publish guidance on the method it expects to apply in making the assessment.
56 Informing local authorities where failure of care provider likely
(1) This section applies where the Care Quality Commission is satisfied that a registered care provider to which section 55 applies is likely to become unable to carry on the regulated activity in respect of which it is registered because of business failure as mentioned in section 48.
(2) The Commission must inform the local authorities which it thinks will be required to carry out the duty under section 48(2) if the provider becomes unable to carry on the regulated activity in question.
(3) Where the Commission considers it necessary to do so for the purpose of assisting a local authority to carry out the duty under section 48(2), it may request the provider, or such other person involved in the provider's business as the Commission considers appropriate, to provide it with specified information.
(4) Where (as a result of subsection (3) or otherwise) the Commission has information about the provider's business that it considers may assist a local authority in carrying out the duty under section 48(2), the Commission must give the information to the local authority.
(5) Regulations may make provision as to the circumstances in which the Commission is entitled to be satisfied for the purposes of subsection (1) that a registered care provider is likely to become unable to carry on a regulated activity.
(6) The Commission may consult such persons as it considers appropriate on the methods to apply in assessing likelihood for the purposes of subsection (1); and, having carried out that consultation, it must publish guidance on the methods it expects to apply in making the assessment.
57 Sections 54 to 56: supplementary
(1) For the purposes of Part 1 of the Health and Social Care Act 2008, the duties imposed on the Care Quality Commission under sections 54(1) and 55(1) are to be treated as regulatory functions of the Commission.
…
(4) The Commission must, in exercising any of its functions under sections 54 to 56, have regard to the need to minimise the burdens it imposes on others.
As set out above, section 56(5) of the 2014 Act provides that Regulations might be made ‘as to the circumstances in which the [CQC] is entitled to be satisfied for the purposes of subsection (1) that a registered care provider is likely to become unable to carry on a regulated activity’. No such Regulations were made.
Regulations were, however, made as to what constitutes ‘business failure’ for the purposes of sections 48 and 50–52 of the 2014 Act, and thus for the purposes of section 56(1), which refers to ‘business failure as mentioned in section 48’. Those Regulations are the Care and Support (Business Failure) Regulations 2015 (SI 2015/301). Those Regulations provide, insofar as germane, that, in relation to a provider other than an individual, business failure consists of the appointment of an administrator, receiver or administrative receiver, the passing of a resolution for a voluntary winding up or the making of a winding up order.
The evidence was that, at present, there are 61 registered care providers who are subject to...
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