Warning Notices – How to Turn a Threat Around

So you see it pop into your inbox – an email from the Care Quality Commission (“CQC”) issuing a Warning Notice for breach of regulations. The three to four page document outlines in detail how you have failed, or are failing, to comply with one or more of the regulations. At the end it simply states, “Please note: If you fail to achieve compliance with the relevant requirement within the given timescale, we may take further action.”

So what can you, as a provider, do if you receive a Warning Notice? In this article I will outline what a Warning Notice is; why, when, and how the CQC issues them; and how and why it is important to challenge them.

What is a Warning Notice and what gives the CQC the power to issue one?

A Warning Notice is exactly what it says, a warning to a provider that further action will be sought should they not comply with the requirements in the notice. These are issued under S.29 of the Health and Social Care Act 2008 (“HSCA”).

S.29 confers a discretionary power to the CQC to issue these notices, stating at S.29(1), “If it appears to the Commission that a person who is registered under this Chapter as a service provider or manager in respect of a regulated activity has failed to comply with the relevant requirements, the Commission may give the registered person a warning notice.” Ultimately the test that must be satisfied for a notice to be issued is, “It appears to the Commission that [a provider] has failed to comply with the relevant requirements [x].” Further, the CQC can issue these for breaches in the past or a breach that has since been rectified if the CQC deems it serious enough to still issue the Warning Notice.

There is also a prescribed way that the CQC must issue these – it must be in writing and it must explain the relevant regulation and how the CQC believes a provider is in breach (see S.29(2) HSCA).

Additionally, there are important limitations on CQC enforcement action once a Warning Notice has been issued. First, per S.29(4), the CQC cannot use the failure in the Warning Notice as grounds to cancel registration, suspend registration, vary conditions of registration, or remove or impose conditions of registration so far as  the failure occurs prior to the ‘relevant time’ specified in the notice. A second limitation is found in S.29(5), which states that no proceedings can be brought against any registered person (i.e. provider) in respect of the regulated activity that the Warning Notice pertains to before the ‘relevant time’. The ‘relevant time’ being the date by which the CQC has stated the provider must comply. Effectively this means the CQC cannot simultaneously pursue further enforcement action in relation to the alleged breach in the Warning Notice until the deadline is up. The good news for providers is this gives them time to ensure they are compliant without the stress of impending cancelation or suspension of registration, conditions on registration, or other legal action.

For the majority of regulations, the CQC is under no obligation to issue a Warning Notice if they believe there is a breach of regulations or failure to comply with relevant requirements. This means the CQC could choose lower level enforcement action if they wanted, or higher. However, over the last few years Ridouts has seen an extremely heavy handed approach by the CQC when taking enforcement action.

In the scheme of their enforcement powers, Warning Notices are not that serious compared to, for example, a Notice of Decision to remove a location from your registration, which would have the effect of shutting down the service. So the good news is, Warning Notices give providers the opportunity to reflect on what the CQC claims are their failings and rectify them accordingly before more serious enforcement action is taken. However, a Warning Notice will go on a provider’s records and can be used against them in the future if the CQC decided to take further enforcement action. This makes it crucial to challenge a Warning Notice on the prescribed grounds (outlined below) because the CQC does not always get it right.

Taking Action – Challenging A Warning Notice

While providers do not have a legal right to appeal a Warning Notice, they do have the opportunity to make representations challenging it. Providers can also choose to take no action at all. Ridouts always recommends challenging at the earliest opportunity possible. This is for several reasons:

  • Failure to challenge can result in proposed enforcement action being taken;
  • Failure to challenge means you will be deemed to have accepted the finding, which potentially puts the provider at a disadvantage in any future proceedings to challenge the notice or related enforcement action because they did not take the first and earliest opportunity to do so; and
  • Challenge can result in withdrawal of the Warning Notice and avoiding any of the negative consequences

If CQC decides not to withdraw, you will still have the timeframe they set for compliance and if on that date you are compliant they should not be taking any further action against you for the specific breach alleged. If they do take further action, contrary to their own Warning Notice conditions, this can also be challenged and the action taken to comply and challenges to the warning notice itself will offer useful evidence in further proceedings.

Making Representations – Form and Content

A provider has 10 working days from receipt of the Warning Notice (this is not always the same as what is stated on the Warning Notice itself) to make their representations. They can do this either using the form that the CQC has or use their own format if they believe that would be more appropriate but they should make it very clear that they are making representations to the Warning Notice.

A key aspect of issuing a Warning Notice is that the evidence must demonstrate that the provider is non-compliant with the relevant regulation or other enactment.  This means that the CQC’s evidence must corroborate its rationale for issuing the Warning Notice and prove that legal requirements and regulations have not been met.

In its guidance on Warning Notices, the CQC has set out the bases upon which representations may be validly made: (serious) errors, factually inaccurate, unfair, some other reason (i.e. the legal test has not been satisfied). This is where providers will have the best opportunity to demonstrate that the CQC’s allegations are wrong.

In particular, providers should focus on how the CQC’s evidence does not actually demonstrate breach of the relevant regulation or enactment. This can include providing further evidence that shows CQC is acting disproportionately based on actual versus perceived levels of risks to service users, and demonstrating that the evidence which the CQC has presented is inaccurate and/or taken out of context. Additionally, providers should always argue why it is unfair to publish the report (i.e. bad publicity based on inaccurate information; it would not serve public interests to publish it; the provider is now compliant and thus the information and evidence is out of date and inaccurate). Providers will need robust evidence to back up their position and demonstrate inconsistencies and/or errors/inaccuracies in the CQCs allegations and evidence. Again, this must all demonstrate compliance with the legal requirements and regulations contrary to what the CQC alleges in the Warning Notice.

What can CQC Do?

When a Warning Notice is issued and subsequently challenged, the CQC has a few different options when it comes to a response.

The most ideal result for providers is that the CQC accepts the challenges and withdraws the notice completely. Short of completely withdrawing notice, the CQC can also choose not to publish, which will help providers avoid reputational harm, albeit the CQC still deeming them to be in breach of the regulations or some other enactment.

The CQC can also do things that are completely undesirable to a provider, including accepting the challenges and withdrawing the original Warning Notice where there are factual inaccuracies but then reissuing the notice without the inaccuracies. The CQC can also publish the notice and proceed with the follow-on action proposed in the notice where they deem the conditions to not be met. This will all be at the CQC’s discretion, which can make it difficult to challenge and why seeking professional help is advised.

Engaging Solicitors – Advantages of Legal Advice

Providers may make these representations themselves or they can seek out legal support and advice to challenge a Warning Notice. Using solicitors can offer strength of challenge and robustness of argument where there is the evidence to support it.

Firstly, it notifies the CQC that you take your role and duties as a provider seriously and can greatly minimise the risk of action where there is sufficient evidence and robust arguments. Additionally, using legal services has the advantage of being supported by professionals who are adept to the nuances of the law and the sector. The expertise of legal professionals can be especially handy when it comes to identifying ways in which CQC is being unfair, has not followed its own processes and procedures and creating robust factual and legal arguments as to why the CQC have got it wrong.

Impact on Providers/Conclusion

In short, receiving a Warning Notice is by no means a cause for panic or alarm. The plus side is that it is simply a warning and allows providers time to turn their service around before more severe enforcement action is taken by the CQC where the notice is warranted by the CQC.

However, Warning Notices can produce a lot of negative effects on providers, in both the short term and long term. These include immediate resources being devoted to challenging or becoming compliant with the noted, legal costs where advice and support is sought, and potentially temporary decrease in new business to the service where it has been published. In the longer term, this can result in long-lasting reputational damage with the warning notice being published and on record for that service, follow-on enforcement action and/or legal proceedings which will bring with it further resources devoted to challenging these action. Additionally, other stakeholders may decide to stop doing business with the service as a result of the ongoing enforcement actions and proceedings resulting in the business becoming unviable.

Providers should challenge any enforcement action by the CQC at the earliest possible opportunity, especially if its allegations are based on factual inaccuracies and the action it takes is disproportionate to the actual level of risk.

Ridouts can assist providers who need help challenging Warning Notices and other regulatory enforcement action taken by the CQC. For more information, please contact our specialist team of solicitors on 0207 317 0340 or request a call back via the website.

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