Consideration of the CQC’s factual accuracy process and post-inspection improvements by the Court of Appeal

The Court of Appeal has handed down its decision in R (Hexpress Healthcare Ltd) v Care Quality Commission [2023] EWCA Civ 238 dismissing the appeal. There were two issues under consideration: (i) whether the Care Quality Commission’s (“CQC”) “factual accuracy check” (“FAC”) process was procedurally fair; and (ii) whether the CQC acted irrationally by failing to take into account improvements made by the provider after the inspection.

The appellant (“Hexpress”) is an online prescribing service; and had undergone a CQC inspection on 17 May 2022. The CQC sent Hexpress the draft inspection report and notified it of the CQC’s FAC process on 29 June 2022. In response, Hexpress sent extremely detailed representations to the CQC. These representations were considered by the lead inspector and various amendments were proposed to the draft report, which were, in turn, sent to an independent inspection manager within the CQC. The lead inspector considered the comments from the independent inspection manager; and made further amendments, which were again sent to the independent inspection manager. The report was then finalised by the lead inspector and shared with Hexpress.

Hexpress issued a judicial review claim in relation to the inspection report on 24 October 2022. Permission to proceed was refused on all but one ground of challenge by Mostyn J at a hearing on 15 November 2022. The application for an interim injunction restraining publication was also refused. Hexpress appealed the decision of Mostyn J in respect of two grounds: (i) the CQC failed to independently review the FAC response, which was procedurally unfair and (ii) the final report contains errors of fact or else gave undue weight to irrelevant factors, in particular, the CQC should have considered the additional evidence and remedial steps taken since the inspection.

On the first ground, Dingemans LJ, giving the leading judgment, noted that procedural fairness is an aspect of natural justice and what is required depends on the circumstances of the particular case. In the context of a person who might be subject to public criticism in a report, he considered the development of the process of Maxwellisation (following the cases involving Robert Maxwell), namely the practice of permitting individuals who were the subject of criticism to see the provisional adverse findings and criticisms so they could comment upon them. He considered Stanley Burnton J’s rejection of the submission in Clegg v The Secretary of State for Trade and Industry and others [2001] EWHC Admin 394 that the person should be provided details of the amended criticisms after that person had provided representations which had led to amendments, because it would render the broader investigation unwieldy, prolonged and expensive; and undermine the utility of the investigation. He also took into account the issuing of warning letters, pursuant to rule 13 of the Inquiry Rules 2006.

Dingemans LJ determined that the CQC’s FAC process of: “sending Hexpress the draft report; permitting Hexpress to comment on the draft report through the FAC process; considering those comments through the lead inspector and another inspector independent of the inspection of Hexpress and making the modifications considered appropriate in the light of the FAC comments; before producing the final report; was procedurally fair” (para 49). The CQC had complied with the statutory requirements set out in section 61 of the Health and Social Care Act 2008 in respect of inspection reports; and, given there were no further procedural requirements set out in the statute, the duties in respect of procedural fairness were implied from the common law. He noted that Hexpress had had “fair notice of the proposed findings and a fair opportunity to answer them” (para 53). In his judgment, that was sufficient to satisfy the procedural fairness on the facts. He did not consider that “fairness to service providers should extend beyond that afforded to those who are criticised by public Inquiries” (para 51). He confined R (SSP Health Ltd) v Care Quality Commission [2016] EWHC 2086 (admin) to its facts, noting that it was a judgment, not a statute.

The court confirmed that (para 54): 

• “It was for the CQC, as the statutory regulator, to decide what processes to undertake to discharge its duties of procedural fairness, and the CQC reviewed its processes in the light of the decision in SSP Health. The CQC has adopted a process of reviewing the FAC comments first by the lead inspector before having that review considered by an inspector independent of the inspection. That process should ensure that any demonstrably wrong or misleading statement is corrected. In my judgment the process undertaken by the CQC in this case was fair.”

On the second ground, Dingemans LJ determined that the CQC acted lawfully by rating the Hexpress on the service that it was providing on the date of the inspection, which is consistent with the statutory scheme (para 58). He considered that it was for the CQC, as the statutory regulator, to choose the date on which to rate the service-provider. Choosing the date of the inspection allowed for consistency for all service providers; and ensured the CQC could produce a fair report at a particular date. If the CQC was under a duty to report on any improvement whenever it occurred, there would be a real risk that the report would never be finalised.

The court dismissed the appeal. The judgment is available here.

Steph David was led by Daniel Stilitz KC from 11 KBW and appeared for the successful respondent, the Care Quality Commission.