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Cawston Park Hospital

– in the House of Commons at 11:12 pm on 21st March 2011.

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Motion made, and Question proposed, That this House do now adjourn.—(Miss Chloe Smith.)

Photo of Steven Baker Steven Baker Conservative, Wycombe 11:22 pm, 21st March 2011

I am grateful to the Solicitor-General for responding to the debate and for being present at this late hour. My hon. Friend Miss Smith and I would like to raise with the House and the Solicitor-General the experiences of Mr Andrew Breeze, a former NHS worker and founding clinician of an independent and innovative psychiatric hospital, Cawston Park.

Mr Breeze’s experiences have been documented in both the regional and the national press, notably by my hon. Friend in an article in The Mail on Sunday on 2l November 2009. Although Mr Breeze is not one of my own constituents, his brother Paul is, and I have agreed to support this important matter, as it has wide-ranging consequences for independent health care and, indeed, many entrepreneurial projects requiring major capital investment.

In late 2003, Mr Breeze set up Cawston Park. He and the other founding clinicians had all previously worked within the NHS and had felt constrained in seeking to provide high-quality, effective care that provided value for money. They therefore seized the opportunity to move into the independent sector to achieve their vision.

The purpose of Cawston Park hospital was to provide specialist psychiatric care and treatment to severely mentally ill patients, many of whom could not be properly treated within the existing NHS structures. In November 2006, the hospital was recognised as having achieved outstanding clinical successes owing to its unique approach to patient care and treatment. Patients who had previously been in other hospitals for lengthy periods of time were being successfully discharged from Cawston Park hospital and it had become apparent that it was saving the NHS hundreds of thousands of pounds annually. Feedback from NHS primary care trusts was extremely positive and referrals extended across the whole of the UK.

However, that period of great accomplishment and acclaim quickly turned sour because of internal difficulties with a senior member of staff. I do not wish to inform the House of every sordid detail I have been shown, but the allegations range from theft to an extra-marital affair with another staff member, together with a range of other grievous matters. As a result there was an internal investigation, followed by disciplinary proceedings, which took place on 16 November 2005.

During this time, the staff member in question had decided to leave Chancellor Care to set up a rival facility to Cawston Park hospital. He had been found to be removing hospital property and recruiting Cawston Park staff to his new venture. A disciplinary hearing was duly set up by Mr Breeze, but the gentleman telephoned one hour before the hearing was due to take place to inform Mr Breeze that he was resigning without notice as he did not want a dismissal on his record when he applied to the Healthcare Commission for a licence to operate a rival facility.

Six weeks later, the Nursing and Midwifery Council wrote to the ex-employee to notify him that it was going to investigate the reasons surrounding his departure from Cawston Park. However, by not re-registering as a psychiatric nurse, which I understand he still has not done, he was able to prevent the NMC investigating further. Later that day he contacted the NHS Counter Fraud Service through its hotline to make what turned out to be malicious allegations.

A subsequent statement was made to NHS Counter Fraud by the female nurse who purportedly had personal relations with the ex-employee, which was considered to be an independent corroboration of the initial allegations. Contemporaneously, a patient had reported the ex-employee to the protection of vulnerable adults scheme, which is now under the auspices of the Independent Safeguarding Authority, for abusive behaviour towards patients. This might have served to illustrate further the character of the accuser.

What followed was a three-year investigation primarily involving three Government agencies and one private company, Lloyds Development Capital. More than 50 police officers were involved in a high-profile dawn raid, which I have learned today was leaked to the press. Some of them were drafted in from outside Norfolk. The defendants were interviewed three times for more than 20 hours. More than 80 witnesses were interviewed, some more than once, concluding in the commissioning of four expert witnesses and the production of four lengthy reports, most notably the Badcock report, whose author admitted that he was not an expert in the field.

NHS Counter Fraud worked on the case for six months before handing it over to the local police in July 2006. During that time, NHS Counter Fraud had concluded that fraud had occurred and Mr Breeze was subsequently charged with conspiracy to defraud the NHS of £2.3 million. The case alleged that the directors had charged the NHS for additional care that had never been provided.

Mr Breeze’s contention is that the police were misled by NHS Counter Fraud convincing them that a fraud had in fact taken place. His argument was as follows. First, in his meeting with NHS Counter Fraud on 16 November 2010 he was informed that it had come to the conclusion that fraud was occurring. My hon. Friend the Member for Norwich North was in attendance. Secondly, in an interview under caution the police made it obvious that they believed that that fraud had occurred. Thirdly, Norfolk police did not have a fraud squad so the case was handed to its major investigation team, which was more accustomed to dealing with murders. No one in that team was a fraud specialist. Fourthly, the police assumed that NHS Counter Fraud knew how a private sector psychiatric hospital operated clinically. That may seem reasonable, but it turned out to be incorrect. Fifthly and finally, NHS Counter Fraud did not advise the police which type of psychiatric expert they should go to, so they went to the wrong type and received factually incorrect and misleading information.

As a result of those events, Mr Breeze and his solicitor, Richard Smyth, came to the conclusion that the police were constructing a case from poor evidence rather than trying to detect whether a crime had been committed. I must ask the Solicitor-General if that is how the system should function.

When Andrew Breeze met NHS Counter Fraud on 16 November 2010, the only documentation that could be produced supporting the fraud allegations was several witness statements taken by the Counter Fraud team, which it had previously refused to disclose to Mr Breeze despite repeated requests to do so. One of those statements was from the original accuser; another was from the female nurse with whom he was in a relationship and setting up the rival project; and another was from a member of staff who had worked at Cawston Park hospital and been recruited for that new venture. Additionally, that individual had invested £10,000 in the new enterprise. There were three other statements taken from ex-staff who had left Cawston Park disgruntled in the past. One does not need a legal education to question the quality of those witnesses and the numerous vested interests that will have been at play.

In the light of those connections, perhaps the police investigations might have discerned something amiss in the accusations at an early stage. When asked by Andrew Breeze why the NHS Counter Fraud team had not carried out basic and obvious lines of inquiry that would have clearly showed fraud was not taking place, its response was that it did not have the resources in place to do that. Mr Breeze had that meeting taped and is having it transcribed.

The police then investigated from July 2006 to February 2008, at which point Andrew Breeze was charged with conspiracy to defraud the NHS. The police now refuse to disclose their case summary, which was sent to the Crown Prosecution Service prior to the decision to charge Mr Breeze. His freedom of information request has been rejected.

What is of significant interest is the 22 April 2009 computer forensic review prepared by James Coulthard from Stroz Friedberg. A summary of his conclusions are as follows:

“Computers relating to”

Mr. Breeze’s accuser

“appear not to have been examined…Norfolk Constabulary Computer Crime Unit have lost digital evidence from exhibits, which cannot be replaced. Norfolk Constabulary Computer Crime Unit supplied defective and incomplete digital evidence to the defence without verifying the integrity of the evidence on more than one occasion. The lack of key exhibits in this case makes it impossible for the defence to effectively investigate the claims of document falsification by BREEZE and WILSON.”

Does the Solicitor-General share my concern about the implications of those events?

The result was that Cawston Park’s financial backers, Lloyds Development Capital, exercised its increased rights under the terms of the management buy-out, which stated that, if allegations of fraud were brought to its attention, it then had the power to dismiss Andrew Breeze from his post of chief executive. It subsequently did so and brought in Lesley Reardon-Denton, someone who had no clinical experience in psychiatry, to run the business in Mr Breeze’s absence.

On the instructions of Lloyds Development Capital, Ms Reardon-Denton instigated an internal inquiry by bringing in what she described as an “independent” expert, Christopher Hird, to produce a report, which heavily criticised Mr Breeze’s management of Cawston Park and was used to dismiss him. It later transpired that Mr Hird was not independent, having been a long-standing employee of Lesley Reardon-Denton in a business of which she was chief executive in London. The prosecution subsequently ditched the report, when its independence was questioned, during the trial.

Lloyds’ resulting decision meant that Mr Breeze went on to lose his entire investment, which the police valued at £9.4m. That seems to me a grotesque injustice which is bound to deter other entrepreneurs.

A further point of note is the conduct of Zurich Insurance. Cawston Park had directors’ and officers’ liability insurance when it carried out the management buy-out. This was meant to cover all the legal costs if any member was accused of fraud. However, in a letter dated 9 October 2007, Zurich informed Mr Breeze that it was reneging and refused to pay. It deemed the policy null and void on the slightly odd grounds that Cawston Park did not inform it that the directors were involved in criminal activity when the policy was taken out some time previously. We should note that, at this point, Mr Breeze had not been charged. Zurich went on to say:

“Given that the criminal wrong doing appears on any view to pre-date the retro date in the policy, our clients do not feel able to continue indemnifying defence costs.”

Mr Breeze was unable to fight this decision privately, as the police had frozen all his assets, thus not allowing him to pay for legal advice. Legal aid eventually took over, but at an estimated cost of £2 million. Should not legal aid be persuading Zurich to honour its policy and pay what is due? Should the taxpayer even be liable?

Trial proceedings began in April 2009, but before the prosecution could complete outlining their case, the judge brought the trial to a close because they could not offer sufficient evidence. In his closing speech, the judge made complimentary comments about Mr Breeze, including:

“You entered this courtroom on the 20th April as a clinician of exemplary character. You leave it vindicated with your good name intact and your head held high”, and:

“I hope that no professional or other obstacle will remain to hinder your early return to work in the field of psychiatric healthcare, should you wish to do so. You are a talented man with much still to offer your peers and patients.”

Regrettably, Cawston Park hospital never recovered from the investigations by NHS Counter Fraud and Norfolk constabulary. It finally went into administration, with the investigation process being cited as the reason for its closure. Despite the judge’s comments, Andrew Breeze has had obstacles put in his way that have prevented him returning to the field of psychiatric health care.

This tragic story touches on numerous legal, social and political issues that need to be addressed. They have potentially far-reaching implications for entrepreneurs, particularly with respect to the Government’s programme of health reform. The first issue is the role of the three organisations, which, although independent of each other, failed to carry out basic lines of inquiry. Although the CPS clearly stated that there was no evidence to support the allegations and that the case should never have reached the stage that it did, it continued to assert that there were five indications of dishonesty. A letter from the CPS to Mr Breeze concluded:

“1. There are some factors that indicate dishonesty, which include a body of witness evidence to show a lack of understanding or knowledge of extra care by staff that one would expect to be involved in administering that type of care;

2. Evidence of low staffing levels to give enhanced care;

3. No clear audit trail to show what a patient received to justify the extra charges made;

4. There doesn’t appear to be file notes on the patients' files to cover the extra care aspect of their treatment;

5. In addition, some patients were charged extra care premiums whilst away from Cawston Park.”

Mr Breeze argues that those assertions are based on inaccurate and incomplete information that was provided to the CPS by NHS Counter Fraud and subsequently to the police. The CPS refused to meet Mr Breeze to discuss the matter any further, and Keir Starmer QC, the Director of Public Prosecutions, stated that any further debate would not progress the matter, having written:

“Further correspondence from you which fails to raise fresh issues will be filed without response.”

Because of these rebuffs, regrettably, Mr Breeze’s reputation remains tarnished.

Furthermore, Norfolk constabulary and the Independent Police Complaints Commission have denied any wrongdoing, even though the judge ruled that the allegations against Mr Breeze and his hospital’s finance director were unfounded, and even though the judge said that they left court

“exonerated and as innocent men”.

Both public bodies appear to have failed to take into account the very significant losses, both financial and reputational, suffered by Mr Breeze. Contrary to the judgment, the two men have not been exonerated and remain condemned in the eyes of the bureaucracy.

The next organisation is NHS Counter Fraud. A Parliamentary question tabled by my hon. Friend Norman Lamb revealed that over the previous three-year period, NHS Counter Fraud cost £32.4 million to operate and uncovered £10.1 million of fraud. The operation of NHS Counter Fraud had cost the NHS £22.3 million net over three years, which seems ridiculous.

NHS Counter Fraud has met Andrew Breeze and my hon. Friend the Member for Norwich North, but has not satisfied either of them that it carried out a competent and comprehensive investigation into the allegations of fraud. Additionally, the NHS Counter Fraud investigation has placed another burden on the taxpayer indirectly, due to the savings that Cawston Park hospital was providing to the NHS year by year. Considering that NHS Counter Fraud was set up in 1998 to save the NHS money, it is ironic that its actions through the course of this case have cost the NHS millions of pounds.

I dread to hear the total amount that this debacle has cost the taxpayer. It is clear that the cost to Mr Breeze, his family and the other individuals arrested or brought to trial goes far beyond quantitative description. What should be noted is that Mr Breeze does not want taxpayer-funded compensation. Despite losing a fortune, he wishes simply to see his name restored and to prevent future travesties of justice. The only reason Mr Breeze would contemplate legal action is to obtain the documents he has consistently been refused in his attempt to clear his name.

The second key issue is that a disgruntled ex-employee, masquerading as a whistleblower, was able to destroy a business and a facility for severely mentally ill patients that had become recognised as a flagship hospital for their treatment. He did so with a financial interest in that outcome. Such episodes are likely to discourage and inhibit entrepreneurial individuals, partnerships, and businesses from embarking on new ventures. This is critical at a time of NHS reform and increasing need. Good entrepreneurs should be encouraged by the state, not permanently condemned and ruined on false charges.

I am deeply concerned that there is still the possibility that exactly the same thing could happen to other entrepreneurs. There have been no external reviews across the organisations concerned, so no lessons have been learned. The state has ruined a thriving business, along with the lives of several committed individuals who have been financially encumbered. There seems to be no mechanism to hold any of the relevant public bodies to account. Each organisation has held its own internal review. The police and NHS Counter Fraud stated that all protocol was followed correctly. The CPS admitted that mistakes were made and that this should never have happened.

For Andrew Breeze to clear his name, it must be acknowledged that the allegations against him were based on inaccurate and incomplete information. The court judgment that fraudulent behaviour was not occurring within Cawston Park must be affirmed. Indeed, it should be stated that dishonesty was never a factor in any of the business dealings within the organisation. My hon. Friends the Members for North Norfolk and for Norwich North and I wholeheartedly want Mr Breeze’s name to be cleared by the relevant public bodies. That is the bare minimum he deserves after this pantomime. It would perhaps at least enable him to start again.

I finish with some questions for the Solicitor-General. Will he establish an independent inquiry into the actions in concert of the CPS, NHS Counter Fraud and Norfolk constabulary? Will he further investigate the questionable actions of Lloyds Development Capital, which was directly responsible for the sacking of Mr Breeze and the demise of Cawston Park’s outstanding service to the community? Such an inquiry could create far safer conditions for the entrepreneurs we so desperately need today.

Will the Solicitor-General give an assurance that, after nearly four years, Mr Breeze will receive clarification, along with the documentation he has requested, from NHS Counter Fraud on its role in the fiasco? Will he convene with the CPS to establish Mr Breeze’s innocence in the matter? Will he ensure that any independent inquiry that is set up allows access to all the documentation that Mr Breeze has been requesting for the past two years, particularly the police case summary? Mr Breeze is still waiting for a report from the senior fraud lawyer at the CPS who carried out a review of its decision to charge him initially. He is concerned that, like the recently rejected police case summary, the CPS report will not be made available.

Finally, will the Solicitor-General work to eliminate this Kafkaesque tangle of bungling bureaucracy? The state has ruined a great business, along with its founder, and that should be remedied. More broadly, the state continues to threaten honest entrepreneurs. The instruments of the state should not be allowed to do that in future.

Photo of Edward Garnier Edward Garnier The Solicitor-General 11:45 pm, 21st March 2011

I will speak quickly, to get as much on the record as I possibly can in the short time available to me.

I congratulate my hon. Friend Steve Baker on securing the debate and thank him for making it possible for my hon. Friend Miss Smith, who is with me here on the Treasury Bench but who, as a Government Whip, is prevented from speaking, to bring before the House a matter that directly affects one of her constituents, Mr Andrew Breeze.

The debate allows me to answer some important questions on behalf of the Crown Prosecution Service, for which the Attorney-General and I are accountable to this House. I should also confirm that the interest of my hon. Friend the Member for Wycombe in this matter is not just altruistic, although it is that as well. Mr Breeze’s brother lives in his constituency, so he has a family interest in the debate.

Andrew Breeze was one of two defendants charged in February 2008 with conspiracy to defraud NHS primary care trusts by charging them for what was called “extra care” for mental health patients at a private hospital, Cawston Park hospital in Norfolk, which was owned by a company in which the defendants had a significant interest. Those activities were said to have taken place in the two years before August 2006. It was alleged by the prosecution that the charges for extra care were criminally dishonest, because that extra care was not in fact provided.

The trial began in April 2009 but was halted in June 2009 when the judge at Ipswich Crown court intervened, resulting in the prosecution bringing the case to a halt by offering no evidence. Mr Breeze was then acquitted of all charges. At the conclusion of the case the judge said to Mr Breeze and his co-accused:

“You leave vindicated with your good name intact and your heads held high.”

I wish to make it clear beyond doubt that that acquittal means that Mr Breeze was, and remains, not guilty of the criminal charges brought against him. On behalf of the CPS, and as Solicitor-General, I associate myself without reservation with the words of the judge, but I go further and say that in so far as Mr Breeze was prosecuted as a consequence of what the CPS did or did not do, I want to place on record for all to see my apologies to him. It has become clear that regardless of whether it was proper to investigate the affairs of Cawston Park in the first place, the prosecution should never have got as far as it did.

I am accountable for the CPS, which was responsible for deciding whether to institute and continue the prosecution in this matter. The police were responsible for investigating the case on the basis of a complaint from NHS Counter Fraud, but not for deciding whether to prosecute. The prosecution in this case should never have reached the stage that it did, and I repeat, without restating verbatim, the judge’s words and my apology.

I should also like to apologise to Mr Breeze for the failure to respond to his letters of complaint sent to the CPS after the trial finished. Mr Breeze eventually felt that he had no option but to present himself in person at the CPS offices, because of the repeated failures to reply to him.

In response to his complaint, the CPS did––very late––conduct a thorough review. It was conducted by a senior lawyer at the CPS, Elizabeth Bailey, who had no prior involvement in the case. She concluded that, in her view, the case should not have resulted in criminal charges. I endorse her conclusions. She found that there was material available in the evidence that could be seen as pointing towards dishonesty, but equally that there were issues, which were known about at the point of charge, that undermined the strength of the case. I will come to those in a moment. Different lawyers can quite properly take different views on the merits of any given case. Elizabeth Bailey in this case believed that, even if the charging decision could be seen as appropriate at the outset, the case should none the less not have been allowed to proceed to trial. She apologised to Mr Breeze by letter dated 26 July 2010 on behalf of the CPS both for the prosecution and for the lack of response to Mr Breeze’s complaint.

My hon. Friend the Member for Wycombe complains that that letter leaves Mr Breeze’s reputation tarnished, whereas the judge in the case told Mr Breeze that he left the court with his reputation intact and his head held high. With respect, since it was a private letter, it cannot be said to have had any public effect and the judge’s words at the end of the trial in 2009 are what will have been publicly remembered. However, in so far as there is any doubt about Mr Breeze’s reputation, I trust that what I have said tonight will make the position abundantly clear.

I gather that Mr Breeze has been in touch separately with Norfolk constabulary, the Information Commissioner’s Office and NHS Counter Fraud. I understand that Norfolk constabulary undertook a systematic review of its investigation under terms of reference agreed by the Independent Police Complaints Commission. NHS Counter Fraud has also undertaken its own internal review.

My hon. Friend asked for an independent inquiry. From what I have said, it must follow that I accept that this case raises several concerns. It has, however, been examined both inside and outside the CPS, and I do not believe that another inquiry would reach any new conclusions. The CPS has accepted responsibility for its failings in this case and they are now publicly acknowledged.

The case was not straightforward. There were some 84 witnesses and around 23,000 pages of evidence. The charging decision was approved by the then director of the fraud prosecution service. Both the barristers acting for the prosecution endorsed the decision to proceed. Miss Bailey was asked to consider the case in accordance with the code for Crown prosecutors which is issued by the Director of Public Prosecutions under section 10 of the Prosecution of Offences Act 1985. Her review of the evidence and the information that was available at the point of charge led to the following five conclusions.

First, there was in the hospital a lack of clarity about what the “extra care” charges were for. A better description might have been a “surcharge” for difficult-to-manage patients, but she commented, and I agree, that a lack of clarity is not necessarily indicative of fraud.

Secondly, several people, including Mr Breeze, his co-accused and other officers of the company were being sued by the board of the hospital. The other defendants in the civil action all later gave evidence for the prosecution. They had an interest in the outcome of the criminal case and, as Elizabeth Bailey found, that conflict should have been considered as a significant risk in the criminal case, but it was not. There should have been regular reviews as the case progressed.

Thirdly, in 2005 a due diligence report was prepared by PricewaterhouseCoopers on behalf of Lloyds TSB Development Capital Ltd, which was due to invest—

House adjourned without Question put (Standing Order No. 9(7)).