CQC Criminal Prosecutions: What can the regulator do and how do I handle it?

Over the last five years we have seen a significant increase in the way that the Care Quality Commission uses its powers of prosecution. Since his appointment as the CQC’s Chief Executive in 2018, Ian Trenholm has placed focus on the organisation’s approach to both civil and criminal prosecution. This is perhaps not surprising for a man that began his career as an inspector in the Royal Hong King Police Service followed by a stint with the Surrey Police. Upon the start of his tenure, Mr Trenholm made clear that he intended to bring more prosecutions against providers that were not meeting the regulations.

Many providers have noticed an increase in aggression from the regulator as a consequence and a seeming desire to detect and punish perceived fault, rather than identifying and celebrating good. A risk-based approach has arguably changed the profile of the sector.

Being faced with any kind of prosecution is daunting and worrisome, but understanding the CQC’s power is crucial in understanding how to approach this kind of action. 

CQC’s enforcement powers

Providers will be all too aware of the CQC’s civil enforcement powers. We have all seen and heard of Requirement Notices and Warning Notices as well as the suspension, cancellation and change to a provider’s conditions of registration.

Lesser known are the cautions, fixed penalty notices and prosecutions that constitute the CQC’s criminal enforcement powers.

Providers should be aware that the legislation underpinning the health and social care sector (the Health and Social Care Act 2008, Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 and Care Quality Commission (Registration) Regulations 2009), contain multiple prosecutable offences that providers should be familiar with.

Bringing the prosecution

The bar is very low as to what the CQC must prove in order to prosecute a provider. The CQC must simply show that the breach resulted in avoidable harm to a service user, or a service user being exposed to a significant risk of such harm.

The CQC will focus its attention on gathering information to meet this bar if a prosecution is pursued.

In bringing a prosecution the CQC must have regard to the Code for Crown Prosecutors which sets out general principles to be applied when making decisions about prosecutions. This is where similarities with police procedure start to show. The Code means that the CQC must decide whether to prosecute after completing the following two-stage test:

1.       Stage one – whether there is a realistic prospect of conviction based on the evidence.

2.       Stage two – it is considered to be in the public interest for the CQC to use its powers of prosecution.

Further similarities with police procedure arise when considering how the CQC must gather information and evidence related to a prosecution. Just like the police, the CQC has to gather evidence in line with the Police and Criminal Evidence Act 1984 (“PACE”) and its code of practice.

Members of the CQC’s investigations team will offer a provider suspected of an offence the opportunity to attend a PACE interview under caution, or to submit a written response to set questions around the offence. Providers are also welcome to refuse to respond. We would strongly recommend taking legal advice as soon as this request is made.

Fines and sentencing

At an early stage in the prosecution process, the accused provider or registered person will be given the opportunity to enter a plea of “Guilty” or “Not Guilty”. Reflecting on the CQC’s own tabulated list of prosecutions, it is interesting to note that just two providers on the list (which exceeds 100 over a 14 year period) entered pleas of “Not Guilty”. This is because providers that enter “Guilty” pleas at the earliest opportunity will receive a third of a discount from any fine imposed by the Court. These fines are unlimited and so savings can be significant.

In our opinion, this feature skews the perceived success rate of the CQC in its prosecutions. If a provider considers its case and is advised by its legal team that there is a remote chance of the prosecution being successful, then the provider may hedge its bets and simply plead guilty in any event to limit the financial impact. As noted above, fines that can be imposed by the CQC can be substantial and the table published by the CQC here demonstrates the broad range. Fines are decided on with consideration of the size of a business and the nature of the offence. The table shows that some fines have exceeded £1m.

The average fine is now almost £600,000 compared to £160,000 before 2020, amounting to around a 242% increase.

Whilst fines are the most likely outcome of a prosecution by the CQC, there are offences which attract a custodial sentence.

Both outcomes are potentially catastrophic for the commercial viability and reputation of a health and social care business.

How should a provider react to a prosecution?

In most cases, the CQC will contact a provider to alert them to the fact that its investigations team is considering a prosecution as a consequence of a breach.

Normally these letters will not require any further action (and act as a notification only) but there will be occasions where the correspondence asks the provider to supply the CQC with documentation pertaining to the alleged breach.

The threat of prosecution should always be treated with extreme caution and legal advice should be sought at the earliest opportunity – certainly before any documentary evidence is provided to the CQC. The provider needs to consider the context of the allegation and what likely information the CQC already has in its possession. It is not unusual for the CQC to rely on solitary witnesses or its own interpretation of documentation, which is not always a reliable foundation of evidence.

It is crucial that providers remember that the CQC can bring a prosecution in relation to a breach that happened three years prior. This would also require consideration of the nature and reliability of any evidence that the CQC has (given that it is historical in nature).

A legal advisor will reflect on the allegations made and the information being requested by the CQC. Often, the CQC’s request for information will amount to no more than an attempt to get the provider to help build its case. Providers should take pause before participating without taking advice as anything provided could be used by the CQC in its case against the provider.

Providers should clarify the grounds on which information is being sought. More often than not, requests for information as part of a general notification that prosecution is being considered, are not a legal requirement. Where CQC requests information in the form of “Section 64 request”, that information should be provided on the basis that it is a criminal offence to refuse to supply it without reasonable excuse.

Given the impact of what is likely to be potential evidence, it is crucial that all documents are carefully reviewed by a legal advisor and a position determined before engaging substantively with the CQC.

Conclusion

Providers facing criminal prosecution should take all correspondence of this nature from the CQC, extremely seriously. A prosecution is likely to relate to a serious incident that has already been subject to regulatory scrutiny or even civil enforcement action. As such, providers should ensure that documentation around incidents is detailed and comprehensive. It is also advisable to ensure that all remedial work and lessons learned around any incident be captured as this could prove to be invaluable mitigation in the event of a prosecution.

Early advice is crucial and will dictate case strategy, approach to evidence and preparation of either mitigation or defence.

If you are faced with a prosecution or escalating enforcement action do get in touch

Acuity Law