R (South West Care Homes Limited) v Devon County Council

The claimant care-home providers sought judicial review of the defendant local authority's decision (2 March 2011, notified 4 April 2011) to make no increase to placement fees for 2011/12. The claim advanced three grounds: (1) failure to have due regard to the actual cost of providing care as required by statutory guidance (Local Authority Circular LAC (2004)20 paragraph 2.5.4); (2) failure to assess the risk to care homes and residents including Article 8 Convention rights; and (3) failure to consult providers as a result of the authority's past practice, giving rise to a legitimate expectation of consultation.

The court held that the decision-maker had had due regard to the actual costs of care and lawfully formed the view not to follow alternative pricing models; ground 1 was rejected. Ground 2 added nothing material beyond ground 1 and was rejected (the court considered but did not decide complex human-rights points). Ground 3 succeeded: the authority had adopted a practice of consultation and here did not carry out a consultation meeting the established public-law requirements (Gunning/Coughlan), nor allow adequate time or an invitation enabling all providers to respond.

In the exercise of its discretion the court declined to quash the decision because of the passage of time, potential detriment to good administration and third-party hardship; instead it granted a declaration that the defendant unlawfully failed to consult. The court also made an order on costs (defendant to pay half of the claimant's costs to date, with an interim payment).

This is a first-instance judicial review of a local authority decision not to award an increase in care home placement fees for 2011/12. The claimants are private care-home providers who contract with the defendant under the National Assistance Act 1948 (section 21) to accommodate residents whose needs were assessed under section 47 of the National Health Service and Community Care Act 1990. The decision-making process took place against severe public-finance pressures following the Government Comprehensive Spending Review.

The claimants challenged the decision on three narrow grounds:

• Ground 1 — that the authority failed to have due regard to the actual cost of providing care contrary to paragraph 2.5.4 of Local Authority Circular LAC (2004)20 (and related statutory guidance under section 7 of the Local Authority Social Services Act 1970).
• Ground 2 — that the authority failed to assess risk to care homes and residents and to take proper account of Article 8 rights (as incorporated by the Human Rights Act 1998).
• Ground 3 — that the authority unlawfully failed to consult providers before finalising the fee decision, contrary to the legitimate expectation created by the authority's past practice.

The court considered the evidence, chiefly witness statements of the relevant director (Jennifer Stephens) and finance officer (John Holme), and documentary records of internal meetings. On ground 1 the judge accepted the defendant's unchallenged evidence that officers considered cost pressure, used a locally‑derived PricewaterhouseCoopers model (2004) rather than the Laing & Buisson national model, and had regard to actual costs and local factors; there was no obligation to adopt any particular model. On ground 2 the claimants did not press a sustained argument and the court rejected any substantive failure to have regard to Convention rights in the particular factual matrix.

On ground 3 the court found that the authority had a practice of consultation such that a duty to consult arose. The meeting of 23 February 2011 did not amount to adequate consultation in public‑law terms (it did not communicate a genuine invitation to give advice to all affected providers, provided no deadline or mechanism for wider responses and allowed insufficient time before the 2 March decision). The court therefore found an unlawful failure to consult.

On remedies the judge exercised his discretion: he declined to quash the 2 March decision because of delay, staleness, and likely detriment to good public administration and third parties if fees were re-opened for 2011/12. Instead he made a declaratory order that the defendant had unlawfully failed to consult and made a costs order reflecting partial success for each side (defendant to pay half of the claimant's costs to date, subject to assessment, and an interim payment of £40,000). The court noted the utility of declarations as proportionate remedies and transferred any detailed costs assessment to the Senior Courts Costs Office.

This is a first-instance judicial review. The claim succeeds in part. The court found that (i) the defendant did have due regard to the actual costs of providing care and ground 1 fails; (ii) ground 2 (human-rights/risk) is not sustained; but (iii) the defendant unlawfully failed to consult care-home providers in relation to the 2011/12 fee decision and ground 3 succeeds. In the exercise of discretion the court declined to quash the decision (because of delay, staleness and detriment to good administration) and instead granted a declaration of unlawful failure to consult and an order on costs (defendant to pay half the claimant's costs to date; interim payment ordered).