Owners of a group of 25 homes in Newcastle upon Tyne sought a judicial review of the contract terms imposed by Newcastle City Council, arguing they were an abuse of the council's monopoly position.
Lawyers acting for the Newcastle Association of Care Homes argued that the contracts were either unreasonable or ultra vires (outside the council's legal powers).
But the judge, Mr Justice Auld, dismissed the application. He accepted the council's claim that the authority had a duty to the residents it financed to stay in the homes, and to the council taxpayers, to ensure high standards of service at an economical cost. He ruled that the council did not owe any duty to the homes.
The Newcastle homes owners are considering an appeal. Maggie Spofforth, their solicitor, said: 'There are many complex reasons why the contracts are considered unfair.
'For very minor reasons, something as small as a defective fire extinguisher, homes can effectively be shut down. The council can completely change the service that is to be provided.
'The imposition of care managers who can interfere in the running of homes and the allocation of resources is considered an abuse of their monopoly,' she said.Reuse content