Care home providers and unpaid fees: Key lessons from the Oxfordshire County Council case

The High Court decision came at an interim hearing, where Oxfordshire County Council sought to strike out the provider’s claim for payment of around £200,000 for unpaid care fees for care that the two claimants had provided after the residents’ savings fell below the statutory threshold.

Dismissing the application to strike out the proceedings, the Judge stated that it was ‘strongly arguable’ that the council had been unjustly enriched because the care homes had fulfilled the council’s Care Act duties in providing and funding the care concerned and were entitled to recompense for the costs they had expended.

It is unknown whether the claim will now be settled or whether there will be any further litigation and we will continue to monitor the outcome.

This case could be of significant value for providers when a local authority has failed to pay despite an obligation due to a resident’s financial circumstances. Providers may be able to go back six years to seek compensation.

Detailed analysis

The case (The Julie Ricardson Ltd & Banbury Heights Ltd v Oxfordshire County Council [2024]  EWHC 3233 (KB)) involved a provider who had a long-standing relationship with the council. In the case of two residents whose savings fell below the statutory threshold, the care homes continued to provide care and accommodation – the alternative being to remove the residents from the homes.

The provider’s case was brought on two alternative grounds:

• The first sought a declaration that the council had failed to meet its Care Act duties and was under a statutory obligation to meet the costs of the care and support provided to the residents.
• The second ground was for restitution, based on the argument that the home had covered the cost of providing the care and accommodation at a time when the resident concerned was entitled to have their care funded by the council.

As a result, the court found that the council had benefitted at the expense of the claimants, being fully responsible for meeting the eligible needs by paying for the care and accommodation.

The court agreed with the claimant’s analysis regarding the statutory framework and set out, at length, the various duties which, if the relevant conditions are met, gives rise to a situation in which the local authority is under a positive duty to meet the resident’s needs for care and support and therefore to pay for it.

The effect of the court’s judgment was that the claimants were allowed to amend their claim and proceed with it. The council could continue to defend the claim and even appeal against the High Court’s judgment but the clear and robust terms in which the judge expressed herself suggest this would be an unlikely outcome.

Consequences for providers

This is a helpful case to providers who are often left in limbo when private pay residents run out of funds and local authorities fail to carry out their statutory duties.

Our advice to providers, at the point in which a resident has or is about to hit the capital threshold, is to communicate with the relevant commissioner about how they intend to proceed. his can be done so it clearly states that any continuation of the service beyond the point at which the capital limit is reached and any decisions about the arrangements are the responsibility of the local authority. Whilst this cannot guarantee that a council will pay, it sets down a marker which can be referred to if fees are not forthcoming.

The Local Government and Social Care Ombudsman have indicated that care assessments (which should include completion of the financial assessment) should be completed by local authorities within six weeks. Ideally, a letter should be sent at least six weeks before the funding position changes.

If there is any delay in payment from the local authority then it would be sensible to issue an invoice and chase for payment. Providers are entitled to be paid their full private rate until they have accepted an alternative proposal from the local authority or the local authority has moved the resident elsewhere. Local authorities must include an evaluation of whether the resident’s best interests will be served by being moved to another location within their assessment.

If it is clear that the resident’s needs can only be met at the existing home (for example because of their long residence and close community ties to the location) the local authority will be obliged to continue to pay the full private rate and the home will have no obligation to accept a lower rate. Even if this is not the case and the family wishes to make an additional payment to allow the resident to remain in the home, the local authority must consider this option. Providers should ensure that they have sufficient knowledge and information about the statutory framework for them to assist residents and their families in these circumstances.

©JHW Consultants LLP, January 2025

For more information

For more information, please contact me. Watch out for our next briefing on fees, which will be published shortly and comes after a successful win of a high-profile case.

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