Background
Fairmont Residential Limited provided residential care and accommodation to WG, a severely autistic adult with complex disabilities and a history of 222 recorded behavioural incidents, since 2008. The North Central London Integrated Care Board (ICB) was obligated under the National Health Services Act 2006 s.3 to fund the placement. The parties negotiated annual contracts, with the fee rising from £3,757 per week (2008) to £5,439 per week (2022). In May 2023, the ICB gave six months’ notice of termination (effective 5 November 2023), proposing a rate lower than Fairmont’s requested £5,983 pw. The ICB thereafter failed to secure alternative placement despite a six-month notice period.
After contract termination, Fairmont continued providing care on an “out-of-contract” (OOC) basis—temporary arrangements for residents awaiting alternative placement. Fairmont invoiced the ICB at £7,500–£8,250 pw for OOC services (reflecting higher agency staff costs and commercial uncertainty). The ICB paid only the old 2022 rate (£5,439 pw) until March 2024, then ceased payment entirely. Fairmont claimed unjust enrichment; the Deputy Master struck out the claim and granted summary judgment for the ICB, finding the Appellant would fail to prove enrichment because the ICB had paid above the CareCubed Calculator (CCC) benchmark rate. Fairmont appealed.
The Court’s Holding
Justice Ritchie allowed the appeal and found the Deputy Master fell into serious error on three grounds. First, the DM wrongly rejected expert evidence from Ms Charlie Jones, a care consultancy expert, who testified that OOC services command market-driven “uplift” rates substantially higher than in-contract (IC) rates. Her evidence—citing 85 comparable OOC terminations in the same year, all charged at uplifted fees—was material to proving objective market value under the test in Benedetti v Intertrade. The DM misunderstood her evidence as addressing IC rates rather than the distinct OOC market, which involves higher costs due to uncertain placement duration, expensive agency staffing, and complex care needs.
Second, the DM improperly relied on evidence from Ms Burge, the ICB’s solicitor, who lacked expertise in care service valuation, made unsourced factual assertions (some erroneous, such as claiming payment through May 2024 when it ceased in March), and had no relevant personal knowledge. The Court doubted she would be permitted to testify at trial on market rates. The ICB failed to call a witness with actual negotiating experience or expertise in IC or OOC rate-setting. Third, the DM conflated in-contract (IC) negotiated rates (benchmarked partly on CCC) with out-of-contract market rates. CCC is a simplistic tool unsuitable for complex cases and does not account for additional staffing hours or the commercial risks of indeterminate placements. The OOC market operates on fundamentally different principles: providers cannot plan long-term staffing, must employ costly agency workers, and face uncertainty over placement duration.
Key Takeaways
- Out-of-contract care rates are a distinct market from negotiated in-contract rates and are typically substantially higher due to staffing uncertainty and commercial risk.
- Expert evidence on care service valuation from qualified practitioners is material and necessary; solicitors without relevant expertise should not be relied upon to opine on market rates.
- The CareCubed Calculator benchmark does not determine or cap the objective market value of emergency or temporary placements, especially for residents with complex needs.
- Summary judgment is inappropriate where valuation of specialist services and unjust enrichment are genuinely disputed matters of fact and expert opinion.
- An ICB cannot unilaterally fix reimbursement rates for services it has failed to arrange alternatives for, when a care provider must continue providing services to a vulnerable resident.
Why It Matters
This decision is significant for care law, restitution, and procurement. It establishes that when an NHS body or local authority terminates a care contract but fails to arrange alternative placement, compelling the provider to continue serving the resident, the provider’s entitlement is to the objective market rate for emergency out-of-contract services—not the previous negotiated rate or a generic benchmark. The ruling reinforces that market conditions (staffing scarcity, short-term hiring costs, placement uncertainty) must be weighed by reference to actual industry practice, not cost-accounting formulae. For restitution law, the decision clarifies that unjust enrichment can arise even where some payment has been made, if the payment falls short of the true market value and the defendant knew or ought to have known that higher market rates applied. The procedural lesson is that expert-heavy valuation disputes, especially in regulated care sectors, are unsuitable for strike-out or summary judgment where the facts are contested.