Cygnet Health Care Limited, R (on the application of) v Care Quality Commission

The court applied the established test for apparent bias: whether a fair‑minded and informed observer, having considered all relevant facts, would conclude there was a real possibility of bias (Porter v Magill). The inspector 'AA' had previously been an inpatient at Cygnet hospitals and had made complaints about his care; CQC did not apply its Conflicts Policy fully and decisions about allocation and escalation should have been taken at a more senior level.

On examination of the totality of the material, including contemporaneous inspection notes, quality assurance processes, multi‑member inspection teams and Ratings Approval Meetings, the Judge found that the inspection reports and enforcement decisions were in most respects cogent and independently scrutinised. Nevertheless, taking the whole picture together the court concluded there was a real possibility of bias arising from AA’s history and the failures to follow the Conflicts Policy.

Relief was granted in part: a declaration that the Impugned Decisions were tainted by apparent bias and quashing/direction to reconsider the Acer (Chesterfield) rating decision; the remaining reports and most enforcement decisions were not set aside because it was not highly likely that the outcomes would have been substantially different (Senior Courts Act 1981, s.31(2A)). Costs were awarded to the claimant on the standard basis at 90% with a payment on account of £125,000.

Background and parties: The claimant, Cygnet Health Care Limited, challenged two decisions by the Care Quality Commission dated 8 June 2023. The first decision was that seven inspection reports and four enforcement decisions in which Inspector 'AA' had been involved were not tainted by apparent bias. The second was that CQC would not revisit, review or withdraw those inspection reports or enforcement decisions. The case concerns AA, formerly an NHS mental health nurse who had been an inpatient at Cygnet hospitals in 2012/13 and later employed by CQC as an Inspector. Anonymity orders protected AA’s identity and medical records.

Procedural posture and relief sought: Permission to apply for judicial review was granted on renewed application. Cygnet sought quashing of the two decisions and a declaration that the Impugned Decisions were tainted by apparent bias.

Issues framed:

• Whether the Impugned Decisions were tainted by apparent bias under the Porter v Magill test;
• Whether CQC lawfully declined to revisit, review or withdraw inspection reports and enforcement decisions where apparent bias is alleged;
• Whether, if unlawful, relief should be granted in whole or in part in light of the Senior Courts Act 1981 s.31(2A) 'highly likely' test as to whether the outcome would have been substantially different.

Facts and evidence considered: The court reviewed a long documentary record relating to inspections at six Cygnet sites between 2019 and 2021 (Acer/Chesterfield, Bostall House, Blackheath, Harrow, Beckton—two reports and related enforcement action). The CQC Conflicts Policy provided that an inspector who had used a service within the prior five years should not inspect it; that decision should be escalated to Deputy or Chief Inspector. CQC admitted the policy had not been followed consistently and reviewer Odette Coveney concluded the reports and enforcement action were evidence‑based and proportionate. Cygnet relied on AA’s prior detention and complaints, alleged nondisclosure and CQC’s failure to escalate allocation decisions.

Court’s reasoning and conclusions: The Judge applied the fair‑minded and informed observer test and considered the full matrix of contemporaneous inspection records, team composition, quality assurance and RAM meetings. The court found (i) a material conflict of interest existed and CQC had not followed its Conflicts Policy fully; (ii) the inspection reports and enforcement processes showed multi‑party scrutiny and robust evidential foundations in most instances; but (iii) when the totality of circumstances was assessed the fair‑minded observer would conclude there was a real possibility of bias arising from AA’s history and the failures to follow policy.

Remedy and proportionality: The court granted a declaration that the Impugned Decisions were tainted by apparent bias. Under s.31(2A) Senior Courts Act 1981 the court declined to quash most reports and enforcement decisions because it was not highly likely that outcomes would have been substantially different; it directed CQC to reconsider the Acer (Chesterfield) rating and quashed the decision refusing to revisit that report. Costs were awarded to Cygnet on the standard basis at 90% with a payment on account of £125,000.

The claim was allowed in part. The court found that Inspector 'AA' gave rise to a real possibility of apparent bias because of his prior inpatient history at Cygnet hospitals and CQC’s failures to apply its Conflicts Policy. The court granted a declaration that the Impugned Decisions were tainted by apparent bias and quashed/directed reconsideration of the Acer (Chesterfield) rating decision. For the remaining inspection reports and most enforcement decisions the court declined further relief under Senior Courts Act 1981 s.31(2A) because it was not highly likely the outcomes would have been substantially different, given the multi‑member inspection teams, quality assurance and contemporaneous evidence.