[2025] EWHC 2684 (KB)

Unsurprisingly in my view the Judge had concerns about the single count Indictment. On the basis of the report of Mr Tarrant and following through his conclusion. There should have been a multiple count Indictment reflecting the different elements of the alleged dishonesty i.e. the different PCTs, different patients, different time periods, such as when patients were on leave.

It is necessary to give an over view of what happened at the trial. This can be most conveniently done through Counsels’ advices. In the second advice Counsel explain how they saw the start of the fraud;

“In the private psychiatric hospital sector, the method of charging was well established. There was a core cost per patient and an hourly rate for specialling. In the private psychiatric hospital sector it is specialling which generated the profit. Hospitals competing on price mainly competed on the core cost. Thus, when Cawston was being established, the core cost had to be in line with other hospitals.

The problem in our view which emerged was that it became apparent that the difficult patients were absorbing a lot more resources. It also became apparent that without "specialling" this private hospital could not make a profit. Wilson and Breeze had invested money. They wanted a profit. They wanted to sell on. The middle way was found of charging for "extra care'. The issue was whether there was anything extra.

The patients in respect of whom these charges were made were judged especially difficult. It was a flat charge. The revenue to be generated could be calculated exactly. Thus, if you wanted to generate £ X and the flat rate was Y, Wilson need only divide X by Y to say how many patients needed to be on extra care. Mr. Deveney was to say that number was 12 and the figures show he was nearly right. Unlike "specialling" which required extra staff and extra cost, this extra care required no extra staff. In reality it was more of a risk premium. However, Breeze and Wilson thought the PCT would not pay unless extra resources were being employed. Breeze and Wilson could not afford to explain exactly what it was in case business was lost. There was a pretence that these patients were incurring extra costs and that it was like specialling but different. For a long time it was not put into writing. What had really helped Breeze and Wilson keep these charges up was that some the patients were so difficult no one else would take them. It seemed therefore, for a while the commissioners had blanked the "extra care" charge. This extra care charging system was very successful at first. Over time it was looked at more closely by Commissioners and their superiors. In the meantime it bumped up the turnover enough to make it look a very profitable company by the buyout in May 2005.

The increasing challenge by the Commissioners led to its decline as it was recognised that it was hard to justify and impossible to show an audit trail. After July 2005 there no new patient was charged extra care. Thus, no new person was admitted to extra care whilst Mr. Cooper was there. It obviously affected his perspective. Furthermore, resources rose over time and appear to have been significantly greater in Cooper's period than previously. From the arrival of Mr. Cooper the number of patients for whom there was extra care charges dropped to the point when McKenzie arrived and there were only the hard core three.

It seems that it is not a coincidence that from about late 2005 as extra care charges fell, the company went into loss.”

The prosecution case was opened and witnesses called over a seven week period. A review of the progression of the trial was set out in the advice of Prosecuting Counsel (Mr Farmer) dated 12^th June 2009 In his introductory paragraphs Counsel indicated that whether or not extra care was provided to what emerged to be about 24% of patients was at the heart of the case. Counsel explained that “the main thrust” of the prosecution case came from Mr Deveney; “he was a whistle-blower” and a central figure:

“He invented the term extra care and was responsible for virtually all the reports justifying extra care. However, his position was that extra care was simply not provided; it was a fraud.”

Counsel continued;

“Once the investigation started, the police gathered a body of evidence which appeared strongly to support the account given by Mr. Devaney. This included Mr Chancellor, the founder of the company, who made a statement trenchantly supporting the Crown position. Dr. Barker, the company psychiatrist was a shareholder and director before the buy out. He had been investigated as a potential defendant. In the event he became a prosecution witness having made a statement strongly supporting the Crown position. Mr. Prior, a significant public figure and latterly the company Chairman also supported the Crown. The commissioners for the PCT appeared to support the Crown including, in particular, Mr. Brook who went on to work for the company.

(I pause to observe that I find the description of Mr Prior as being supportive a surprising one).

The strength of the case was carefully reviewed by Mr. Tarrant. He concluded there was a case. I endorsed that opinion when I was instructed. I added the caveat that the Crown might prove their case but not get a conviction. This could arise if the jury concluded that the outcomes were in the public interest and, notwithstanding money was obtained fraudulently, the public did not really suffer as a consequence. It seemed a strong case with fairly stark issues. When Greg Perrins came into the case as my junior, he endorsed my views of the matter. The case was long in preparation. On the basis of the statements, drafted so as to aver, “no additional care...had been provided for that patient which could reasonably justify the [extra care] charge”. Everyone in the prosecution team agreed that this fairly and accurately reflected the prosecution case. A prosecution summary was prepared which set out the issues with clarity. The introduction of the case summary stated, “it is the Crown’s case that these two men defrauded a number of NHS Primary Care Trusts by charging them significant amounts of money for “extra care” when no such service was in fact provided at Cawston Park’. The case was opened on this basis.”

This analysis, which was based on the statements as analysed in the case summary/MG6, provides strong support for the Defendant’s argument that, objectively speaking, there was reasonable and probable cause for a prosecution.

Counsel stated that the first set back was that shortly before trial further adverse information emerged against Mr Deveney. Ms Vescio accused him of dishonesty in the new corporate venture. Counsel considered that given Mr Deveney’s admission of prior dishonesty this storm could be weathered.

Somewhat remarkably in my view, given that he was seen as “the whistleblower” and “the foundation of the case” and even taking the Prosecution case at its highest; Counsel stated;

“At this stage the strength of the Prosecution case as a whole was such that we could almost have ditched Mr Deveney and kept going.”

It seems the view was that the strength of the prosecution case was within the evidence of Mr Chancellor, Dr Barker, Mr Prior and the PCT Commissioners.

The advice then explained;

“After I had opened the case, Mr. Perrins and I were to learn that there was concurrent civil litigation. The Claimant was Lloyds. The defendants were not only these defendants but three of our important witnesses, Messers Chancellor, Prior and Dr. Barker. The proposed litigation was, in essence on the very facts of this case. It was to sink in that there was a community of interest between the five of them which encouraged them to move to the “same hymn sheet”. In fairness, even had we known that and had in focus, we would have still been bound to call them. The prosecution could not have proceeded with integrity without the principal players. There was nothing to put the prosecution on enquiry that they were about to side fundamentally with the defence.

As a result of the damaging evidence from other witnesses, the principal prosecution witness has crystallised as Mark Devaney. He gave detailed evidence over a number of days that in many cases (though not all) extra care was a dishonest and unjustifiable charge that did not reflect the day to day clinical care of the patients in respect of whom an extra care charge was being made. In many ways he as an excellent witness. He gave positive evidence for the prosecution well beyond his statement. It was obvious he was a difficult man to cross examine. Head on, he was a difficult witness for the defence to undermine. Notwithstanding the difficulties on the evidence of the directors to which reference will be made later, the prosecution had high hopes that he could be relied upon to be the foundation of the case.

He is not a wholly independent witness. He is flawed character. John Farmer had, in fact, felt obliged to open the case with “a health warning”. That was prescient. He was a man with a motive. The point was well made in cross examination that he only made the complaint against the defendants once a grievance arose against them for the way he had been treated following his departure from Cawston Park. Evidence was also elicited from a number of other witnesses that there were serious question marks over Mr. Devaney’s integrity, probity and honesty. In this regard the evidence of Ms Vescio — a sometime close associate — was very damning. It went well beyond the bad character disclosure the prosecution had properly made. Mr Cooper, who professionally was exactly on a par with Mr Devaney, gave evidence that Mr. Devaney was a liar, a man whose word could not be relied upon. Also unfortunately, Mr. Deveney himself shot away the credibility of one of commissioners who potentially could have been most helpful to the Crown. He described him as an ignorant “oaf” who did not know what he was talking about. This was Brian Wesley, the lead commissioner from Suffolk. he has not yet been called but, were he called, his opinions are already fatally undermined.

As indicated above, set against Mr. Devaney’s evidence is a number of other significant witnesses. They all changed their evidence to varying degrees from their original witness statements. This change in evidence could not reasonably have been foreseen. This evidence is adverse to the prosecution. The cumulative effect of these witnesses’ evidence is that it is no longer possible to sustain a case on the basis that “no additional care has been provided which could reasonably justify the charge”. The evidence suggests the contrary to have been the case. A short summary of the relevant witnesses will illustrate the point.

Tony Chancellor described extra care as a legitimate charging mechanism applying to those patients who genuinely consumed more resources. He emphasised that extra care did not necessarily involve an additional expense for the hospital rather it reflected an additional allocation of existing resources. This was at odds with the description he gave in his statement. Not only did he validate the concept of extra care but he also gave evidence that the patients who needed extra care received it. He went on to say that he did not consider that nursing staff would necessarily appreciate that a patient they were caring for was in receipt of extra care. This undermined a central part of our case in which we had sought to rely upon the absence of staff knowledge of extra care as evidence that it was not being delivered.”

(I observe that it shows just how far Mr Chancellor had deviated from his statement that Prosecuting Counsel considered making an application to treat him as a hostile witness)