Understandably, many of our clients are incredibly distressed by inaccurate comments made about their business by regulators and/or by inaccurate comments made by other professionals to the regulators. This is especially true when the statement is demonstrably wrong or misleading.
Clients regularly come to us wanting to ‘sue’ the regulator but in practice, this is not as straightforward as it may at first appear.
Regulators have a duty to investigate intelligence presented to them. Although a statement might be blatantly incorrect to our clients, it is only right that the regulator reviews and triangulates evidence in relation to any allegations or statements made. So, what can clients do when presented with a situation where a blatantly incorrect statement has been made against them?
Defamation claim
When a false statement has been made, it is not unreasonable for clients to then consider a defamation claim. A defamation claim must be made within one year of the publication of the statement complained of. A claimant must be able to prove that a defamatory statement was made about them, it was published to third parties and has caused serious reputational harm (or is likely to do so). This is set out in s1 of the Defamation Act 2013.
Although this sounds relatively straightforward to establish and we have seen cases where clients have been able to make out a claim, it is also important to note the defence of qualified privilege. Qualified privilege applies when the maker of the statement has a legal, social, or moral duty to make the statement and the person receiving the statement also has a legal, social, or moral duty to receive such a statement.
Realistically any statement to the regulator (or by the regulator) is likely to fall under this defence unless the claimant can establish with proof that the statement was malicious. To prove malice, the defendant must have made the statement with the knowledge that the statement was untrue or with reckless indifference to the truth. Even if malice is suspected, it is very difficult to prove which means any defamation claim is highly unlikely to be successful.
Negligence claim
As established in Donoghue v Stevenson [1932] AC 562 to prove negligence, a claimant must establish a duty of care, a breach of that duty, factual causation, legal causation and damages.
Whilst it may be tempting to consider a negligence claim when considering how a provider has been treated by a regulator, the House of Lords made it very clear in the case of Trent Strategic Health Authority v Jain and another [2009] UKHL 4 that regulators in the health and social care arena do not owe a duty of care to providers. This means that any claim is likely to fall at the first hurdle.
Trent Strategic Health Authority v Jain and another [2009] UKHL 4 remains the authority confirming that regulators do not owe a duty of care to care providers. In this case, Nottingham Health Authority had made an application without notice to a magistrate for the cancellation of Mr and Mrs Jain’s nursing home registration under section 30 of the Registered Homes Act 1984 which was the legislation in force at the time. This application was granted on 1st October 1998 and the order was made which required the immediate removal of the elderly service users living there.
Mr and Mrs Jain appealed the decision to the Tribunal, but it was not heard until February 1999. Even though this appeal was a resounding success, and the Tribunal concluded that none of the issues raised were sufficient to justify the immediate closure of the home, the Tribunal allowed the appeal and the magistrate’s decision was overturned; however, it was too late. By this point, irrevocable damage had been done to the business.
Therefore, Mr and Mrs Jain decided to seek damages via the route of a negligence claim. Initially Sir Douglas Brown found in their favour deciding that they were owed a duty of care; however, the decision was appealed to the Court of Appeal. The majority did not believe that a duty of care was owed, therefore an appeal to the House of Lords was made. This appeal considered whether there would be a remedy in the law of tort.
Therefore, the highest court in the land at the time determined it would be contrary to the public interest to establish a duty of care between the regulator and the care provider, regardless of how unjust the circumstances may be. The House of Lords was concerned that such a duty of care would mean inspectors would ‘look over their shoulder’ defensively when inspecting a service in fear of being challenged in the courts for acting negligently. To succeed, a provider would need to show malice on the part of the inspector which is very difficult to prove.
Judicial review
Where a decision has been made by a public body (for example, the regulator), it is worth considering whether it might be appropriate to bring a judicial review challenge. If a decision has been made on the basis of an incorrect statement being made, then this could be an opportunity to challenge that statement. There are four categories of judicial review: illegality, irrationality, procedural unfairness and legitimate expectation.
Time is of the essence with a claim for judicial review. It must be filed promptly and, in any event, must as a general rule be within three months of the date on which the grounds for judicial review first arose. In some circumstances, the time frames are even tighter. These rules can be found in the Civil Procedure Rules 54.5.
Judicial reviews can be costly, but they are an extremely effective way in which to hold regulators to account where appropriate.
To proceed with a Judicial Review claim, the Pre-Action Protocol for Judicial Review must be followed. The Protocol recommends sending a ‘Letter before claim to the defendant’ so that the issues in dispute can be identified and narrowed with the hope of avoiding litigation.
In our experience, when appropriate, a letter before the claim can help to alter the route taken by a regulator. In one of our cases, an inspection report prepared by the Care Quality Commission (CQC) was fundamentally flawed and did not consider the true nature of the service in question. Despite going through the usual channels of the Factual Accuracy Process, sufficient changes were not made to the inspection report, and we instructed a barrister, then sent a letter before the claim. This resulted in the report being withdrawn from the CQC website pending an investigation and a constructive meeting with CQC in order to highlight the key issues. While it did not need to go as far as the court, it was a helpful tool to engage the regulator in a way that would not have been possible within the normal confines of the relationship.
Complaints
This may appear to be an obvious route and many dismiss it as being fruitless but, in our experience, it can be a very useful mechanism in order to hold regulators to account. It is also a method to express for the record dissatisfaction with the way in which a situation has been handled.
In our experience, regulators rarely pay our costs. However, in the case outlined above where CQC prepared a report riddled with errors and the process was handled poorly, our client was forced to incur significant legal costs in order to challenge the report. The report was ultimately withdrawn by CQC. After all of this, a detailed complaint was submitted to CQC and ultimately, after some negotiation, our client received over £50,000 which was approximately 75% of the total costs incurred inclusive of VAT.
Additionally, if the complaint response is not satisfactory, then it is worth considering a complaint to the appropriate ombudsman. These investigations are not quick exercises, but it is worth considering as an option in order to hold the regulator to account for maladministration which has caused injustice to a care provider. In relation to CQC, the appropriate ombudsman is the Parliamentary and Health Service Ombudsman (PHSO). The provider must refer the complaint to the local MP who then passes it on to the PHSO. Currently, we are acting for two clients who have taken their complaints up to the PHSO. The PHSO can make recommendations to correct injustice, including recommending compensation.
Navigating difficulties
Despite the difficulties outlined above for clients to ‘sue’ their regulators or parties referring to the regulators, in our experience, there are ways in which it is possible to hold relevant parties to account. We can help providers navigate these situations in order to achieve the best possible outcomes depending upon the specific facts and evidence.
Lucy Bowker is a Solicitor at Gordons Partnership Solicitors. Email: [email protected] X:@GordonsPartners