R Mavalon Care Ltd and Others v Pembrokeshire County Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Beatson |
| Judgment Date | 16 December 2011 |
| Neutral Citation | [2010] EWHC 3514 (Admin),[2011] EWHC 3371 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 16 December 2011 |
| Docket Number | Case No: CO/10951/2010,Case No: CO/3918/2011 |
[2010] EWHC 3514 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT IN WALES
Cardiff Civil Justice Centre
2 Park Street
Cardiff
Wales
CF10 1ET
Before: The Honourable Mr Justice Hickinbottom
Case No: CO/10951/2010
Mr Charles B éar Qc And Mrs Madeleine Heal (instructed by Alison Castrey Limited, Solicitors) appeared on behalf of the Claimants
Mr David Phillips Qc And Mr Andrew Green (instructed by the Council Solicitor) appeared on behalf of the Respondent
The Interested Parties did not appear
Hearing dates: 13–16 December 2010
(As approved)
Introduction
The defendant council ("the Council") is the social services authority for Pembrokeshire, and, as such it has an obligation under section 21 of the National Assistance Act 1948 to provide residential accommodation to those in its area who, by reason of age, are in need of care and attention not otherwise available to them. It does so in a variety of ways, including providing support in the community and through its own homes. However, to comply with its section 21 obligation, it mainly engages private residential care homes to which it pays a weekly fee for the provision of accommodation and care to those in relevant need. The fee is usually expressed on a per resident per week rate basis, and, in this judgment, given rates will be on that basis unless otherwise indicated. There are approximately 500 elderly people who are so accommodated in Pembrokeshire on the payment by the Council of such a fee.
The claimant companies (Forest Care Homes Limited, Mavalon Limited and Woodhill Care Limited) have common shareholders and directors, including the effective chief executive and manager of the companies, Mr Michael Davies, who is also the Chairman of the Pembrokeshire Care Home Owners ("the PCHO"), a trade association, the name of which is self-describing.
The claimants own and manage four residential care homes in Pembrokeshire, accommodating 87 people, 43 of whom are paid for by the Council. The average age of the residents in each home is over 86 years, and some are in their late 90s. All of the homes provide the accommodation and care to which I have referred. However, one is also a nursing home, i.e. in addition, it provides care by a registered nurse which, under different provisions (i.e. section 3 of the National Health Service Act 1977, and the NHS (Nursing Care in Residential Accommodation) (Wales) Directions 2004), is paid for, not by the Council, but by the relevant local health board. The residents in the nursing home have particular nursing care needs, and they include those who suffer from dementia and other mental conditions.
As I have indicated, about half of the residents in the claimants' homes are paid for by the Council, the fee rate being fixed by the Council under the relevant statutory provisions. In this action, the claimants challenge various decisions of the Council in relation to the fee rate fixed for the year 2010–11. During the course of the proceedings the claimants' case has evolved, but the challenges made fall under three broad heads.
First, the claimants seek to challenge the failure of the Council to make any decision setting a fee rate for the year 2010–11. The Council asserts that, following the collection of relevant data from care homes in Pembrokeshire, it made a decision to fix the fee at £390 per resident per week, prior to 7 May 2010, on the basis of a well-known economic model or toolkit, designed to ensure that an appropriate, fair and justifiable rate was set; and that that decision was communicated to the claimants, through Mr Davies, at a meeting on 24 June 2010.
Second, the claimants contend that, if a decision was made to fix the rate at £390, then that decision was unlawful; because it was irrational or, in the phrase used by Sedley J (as he then was) in R v Parliamentary Commission for Administration ex p Balchin (unreported, 25 October 1996) at page 19, "There is an error of reasoning which robs the decision of logic". Indeed, Mr Charles Béar QC for the claimants identified six such alleged legal errors.
Five of these sub-grounds are in relation to the methodology used in the assessment of the costs of care home providers as follows.
First, the methodology failed to deal properly with capital costs ("the capital costs issue"). I will come on to deal with this sub-ground in detail in due course; but, during the course of the hearing before me, the Council accepted that the manner in which it had dealt with providers' capital costs to arrive at the 2010–11 rate was wrong and unlawful, with the result that it conceded that the decision to set the fee rate at £390 should be set aside and a new decision taken. It also conceded that, as a result of that error, the claimants were entitled to be paid at a rate of £405.50, backdated to 1 April 2010: and, as I understand it, the relevant back-payment has subsequently been made. However, the claimants do not accept that that is the full extent of the legal errors in the methodology used by the Council to arrive at a rate, either in respect of capital costs discretely, or in respect of the other sub-grounds upon which they rely. Other than its concession, the Council denies any irrationality or illogic in its decision-making process that arrived at the figure of £390, now revised to £405.50. That is why this claim has proceeded to judgment, so that I can rule on the grounds remaining in issue and, if I find that any other legal errors were made, hopefully prevent the Council making similar errors in the new decision it is now bound to make.
The second sub-ground relied upon by the claimants in relation to the costs methodology, is that it failed to use appropriate local data on the average number of care hours spent on each resident per week ("the first staffing issue").
Third, it failed to recognise that residents who require nursing care, for which the local health board is responsible, also require more non-nursing care for which the Council is responsible ("the second staffing issue").
Fourth, it failed to take into account data from all care homes in Pembrokeshire, it being based upon data from only the larger homes, i.e. those with 20 or more registered places ("the smaller homes issue").
Fifth, it was based upon costs data collected from the year 2008–9, and failed to take into account inflation in the two years to 2010–11 and the introduction of new Working Hours' Regulations in April 2010 which increased the minimum holiday entitlement from 24 to 28 days ("the inflation etc issue").
In response to each of those five sub-grounds, the Council submits that its methodology was appropriate and lawful.
The sixth sub-ground does not relate to the methodology used to assess providers' costs; but rather that, in determining the rate on the basis of those assessed costs, it took into account the Council's own limited resources which, the claimants contend, is an irrelevant consideration for these purposes. The Council contend that, in setting the rate, it is lawful to take account that factor, as it did.
Those are the six sub-grounds upon which the claimants seek to challenge the Council's decision to set the 2010–11 fee rate at £390. They lie at the heart of this claim.
The third and final broad ground of challenge, also still in issue, is that the claimants contend that the Council acted unlawfully in taking steps to prevent them from seeking a contribution towards its costs from next of kin and others responsible for residents, over and above the fee set and paid by the Council. In response, the Council says that there is no relevant public law decision here that might attract relief in this court; and, in any event, that, by seeking such a contribution, the claimants acted in breach of their contracts with the Council and that therefore the Council was entitled to take the action it did to stop them.
The claimants' application for permission and interim relief came before His Honour Judge Jarman QC on 9 November 2010. He granted permission in the following terms:
"Permission is granted to review the [Council's] failure from 25 August 2010 to agree and act up[on] a properly constructed toolkit that
(i) takes appropriate account of data from all providers of residential personal care in Pembrokeshire; and
(ii) takes account of legitimate current and future costs faced by all providers of residential care in Pembrokeshire as well as the factors that affect those costs."
The relevance of the date 25 August 2010 will become apparent during the course of this judgment, although that relevance has waned as a result of the Council's concession to which I have referred.
At the start of the hearing before me, there was debate about the scope of that permission, and the extent to which I should allow the claimants permission to proceed with a judicial review on grounds not pursued before Judge Jarman and/or on grounds which he had considered but upon which he had refused permission. There was certainly evidence before me that was not before Judge Jarman, as well as further submissions. Whilst not granting any permission wider than that granted by the judge on 9 November, I allowed the claimants to pursue all of the above grounds on the basis that I would deal with the...
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