Case Comment: Cygnet Health Care v Care Quality Commission [2025] EWHC 1 (Admin)

Background

A recent High Court judgment in Cygnet Health Care v Care Quality Commission has found that an inspector engaged by the Care Quality Commission (CQC) was “apparently biased” in their inspection of Cygnet hospitals. The case focused on the CQC’s failure to follow its own Declaration of Interests and Resolution of Conflicts Policy, which led to a judicial finding that the regulatory decisions taken by the CQC were tainted by apparent bias.

The inspector in question, referred to as ‘AA’, was previously detained as a mental health patient in Cygnet hospitals in 2012-2013. Despite this, AA was later assigned as an inspector for Cygnet’s London hospitals and took a leading role in various inspections and enforcement actions between 2019 and 2021. The CQC’s own policy requires potential conflicts of interest to be assessed at a senior level, but in this case, such an assessment did not occur.

Decision 

The judgment underscores serious procedural failings within the CQC, particularly the insufficient oversight exercised by senior leadership in enforcing the conflicts policy. The Court found that the failure to escalate AA’s conflict of interest to senior decision-makers created a real possibility of bias. It emphasised that AA’s prior involvement as a service user of Cygnet hospitals, coupled with the lack of structured inquiry into his past experiences and potential predispositions, contributed to a failure to ensure impartiality. The Court also noted that while AA was part of a larger inspection team and decisions underwent multiple levels of review, this did not eliminate the risk of bias, particularly given AA’s significant role in shaping inspection findings and enforcement actions. As a result, the Court held that the impugned decisions were tainted by apparent bias.

Comment

The case raises the importance of taking steps to mitigate risks of apparent bias. Regulators like the CQC must take proactive steps to improve transparency and ensure that conflicts of interest are properly managed as findings of apparent bias can severely undermine confidence in their impartiality.

A central issue in this case was the failure of senior leadership to properly apply the CQC’s own conflicts policy. Plainly it is key that regulators must not only ensure that they have a robust conflicts policy in place, but that such polices are strictly followed. It is further key that where conflicts of interest are raised, independent oversight mechanisms are in place to ensure an unbiased assessment of the situation. This could involve external auditors or review panels separate from the initial decision-makers.

This case serves as a cautionary tale for all regulatory bodies. Ensuring impartiality is not just about avoiding explicit bias but also about preventing any reasonable perception of bias; procedural fairness is not just about internal consistency but also about external perceptions of impartiality.