[2025] EWHC 2684 (KB)

The First Claimant, Mr Breeze is now aged 70 (I shall refer to the Claimants individually by name and collectively as “the Claimants”) He qualified as a Registered General Nurse (“RN”) and Registered Mental Health Nurse (“RMN”) and was registered with the Nursing and Midwifery Council (“NMC”).

Mr Wilson is aged 52. He qualified as an accountant and was registered with the Chartered Institute of Public Finance & Accountancy (“CIPFA”).

The Claimants first met in the 1990s when Mr Wilson was on a placement at the Norfolk Mental Health Care NHS Trust.

Chancellor Care Ltd was set up by Tony Chancellor in 1998 to provide private sector mental health care to the NHS. The business originally operated from a site at Kelling Park. In 2003 it acquired a new site at Cawston Park which was converted into a private psychiatric hospital designed to accommodate and treat in-patients. The company was paid by the PCTs who placed patients at the hospital.

Mr Breeze was appointed General Manager, and Director, of Cawston Park hospital and Mr Wilson to the role of the Finance Director. Both invested in the company. Dr Simon Barker was Medical Director and Mark Deveney was employed as Head of Care.

As regards the material aspect, the charging system at the heart of the criminal prosecution the Claimants’ skeleton argument set out the Claimants’ perspective on matters as follows;

“In or around late 2003, a system was developed for charging commissioners of Cawston Park’s services, which became known as the ‘extra care charge’ or simply ‘extra care’. The extra care charge was an innovative concept for patients who presented or were likely to present difficulties in terms of the nature and level of care and treatment required, based upon a clinical assessment. In other facilities, patients with high levels of need were likely to receive ‘specialling’, which meant constant one-to-one contact from an often junior and/or unqualified member of staff and would also likely involve additional charges for commissioners. Specialling was not something Cawston Park did, as part of its philosophical approach to patient care and its ethos, which mirrored that already in place at Kelling Park (another facility set up by Mr Chancellor).”

In or around late 2004, the Claimants, with the assistance of Lloyds Development Capital (“LDC”), agreed to a management buy-out with Mr Chancellor. As part of this process Pricewaterhouse Coopers (“PwC”) were instructed to carry out a due diligence process. PwC produced a report dated 23 May 2005.

On 6 May 2005, the Claimants incorporated AD Care Limited, which was set up as the parent company for Chancellor Care Limited and also Chancellor Children’s Care Limited. Mr Breeze became Chief Executive and Mr Wilson became the Finance Director. The Board of Directors included Mr Bull as a representative of LDC.

On 6^th November 2005 Mr Breeze discovered that the Head of Care, Mr Mark Deveney and another employee, Ms Lisa Vescio were preparing to launch a company in competition with AD Care Limited/Cawston Park. It was revealed that they had developed new business plans, which contained financial information that almost replicated the format of financial administration at Cawston Park. Mr Deveney and Ms Vescio were due to attend a disciplinary hearing on 14 November 2005 but before doing so they resigned.

On or around 31 January 2006, Mr Deveney made a report to what was then known as the NHS Corruption and Fraud Reporting Line, alleging that the Claimants were committing fraud in relation to the charging procedures at Cawston Park. Mr Deveney made a series of allegations to the effect that charges for “extra care” were being added to invoices sent out by Cawston Park despite such extra care not being provided. The NHS internal Corruption and Fraud department (“CFS”) conducted an initial investigation which yielded evidence which was considered to provide some support for Mr Deveney’s allegations.

In March 2006, the information provided by Mr Deveney was notified to Norfolk Constabulary and in July 2006, the CFS investigation was transferred to the Defendant’s Major Investigation Team (“MIT”). Operation Meridian formally commenced on 1^st August 2006 under the leadership of Detective Inspector Paul Cunningham as Senior Investigating Officer (“SIO”) with Detective Sergeant Paul Brownsell as Enquiry Team Leader (throughout this judgment I shall refer to the former officers by the rank they held at the time of the material events).

The Crown Prosecution Service (“CPS”) was notified of the ongoing investigation and, by October 2006, Mr Chris Tarrant, an experienced specialist CPS fraud prosecution lawyer, had been allocated to the case. Mr Tarrant was thereafter to maintain direct contact with the investigation team, and to provide advice, up to and beyond the decision to charge.

By November 2006, the Defendant’s officers were preparing to arrest the Claimants.

On 10 November 2006, the Defendant’s officers obtained restraint orders against the Claimants which prohibited them from disposing of their assets, pursuant to the Proceeds of Crime Act 2002 (“POCA 2002”).

The Claimants were arrested on 14 November 2006. Extensive searches were conducted of their home addresses and at Cawston Park Hospital and a large volume of material was seized.

The Claimants have not challenged the lawfulness of their arrest i.e. alleged that that there were no reasonable grounds to suspect them of an offence.

Following the arrests, a very substantial volume of evidence was obtained by the investigation team including witness statements from nurses and support workers, unit managers, therapists, physicians, senior managers, board members, administrative/office staff and PCT representatives. In respect of a number of witnesses, the statement-taking process consisted of an audio-recorded interview followed by preparation (by the investigation team) of a draft witness statement. The drafts were then provided to the witnesses for their approval and signature.

Following interviews, the Claimants were released on unconditional bail, with notification that they had been restrained in relation to their assets.

The Claimants were later formally dismissed by AD Care Limited following the Board’s investigation into matters (including the commissioning of an independent expert investigation).

A forensic psychiatrist (Dr Badcock) was engaged by the Inquiry team as an independent expert to provide an assessment of the extra care concept and its application to a sample of cases.

In June 2007 DI Cunnigham retired and passed on the role of SIO to Detective Superintendent Hobley.

In September 2007, the investigation team submitted an advice file to Mr Tarrant followed shortly thereafter by a detailed case summary (prepared by DS Brownsell) (“the summary”) and relevant evidential material. A further tranche of additional material and an updated summary was sent to Mr Tarrant in January 2008.

The Claimants were represented by DLA Piper solicitors during the criminal proceedings. DLA Piper made some representations to the CPS prior to charge complaining about the adequacy of the police investigation. The correspondence was shared with the investigation team.

On 8^th February 2008 Mr Tarrant made the decision to charge the Claimants with conspiracy to defraud, recording the rationale for his decision in a 28 page advice.

On 18 February 2008, the Claimants were charged with conspiracy to defraud, contrary to the common law.

On 17 June 2008, the Claimants were indicted for conspiracy to defraud. The allegation was that:

“[The Claimants] between the 1^st day of February 2004 and the 30^th September 2006, conspired together to defraud certain Primary Care Trusts, who acted on behalf of the National Health Service, by dishonestly causing charges to be made to them, and payments to be received from them, for various charging periods in respect of certain patients placed by the Trusts at the Cawston Park Private Psychiatric Hospital on the false representation that a service described as “Extra Care”, or multiples of Extra Care, had been provided to the given patient, being care beyond that which was included in the core care charge for that patient, when no such additional care had been provided or no additional care in the given charging period had been provided for that patient which could reasonably justify the charge.”

The Defendant’s officers continued their investigation while the Claimants began to attend preliminary hearings in the Magistrates’ Court at first and thereafter the Crown Court.

The Claimants’ trial commenced on 20^th April 2009. Some of the oral evidence called by the Crown was considered by Counsel and the CPS to have significantly undermined the prosecution case. Following a review a decision was taken (prior to the conclusion of the prosecution case) to offer no further evidence. The Claimants were duly acquitted on 16^th June 2009.