Wilson v Lincolnshire County Council

After the expiration of a fixed price contract, and in the absence of any agreement, express or implied, for a new contract, residents left in the beds of care home providers must be paid for by the authority responsible for them, at a price which is fair and reasonable, on the basis of quantum meruit (a fair price for work done).

It was not open to the authority, if it accepted the services and did not exercise its right to move the clients to other homes willing to provide the care at its usual rate, to treat the homes as providing the services on its own terms as to price.

The contention that the National Assistance Act and Choice of Accommodation Directions oblige providers to accept the ‘usual rate’ of the authority if they wish to do business with that authority had no reasonable prospect of success.

The fact that the issue of the reasonableness of the usual rate would have to be determined in litigation did not mean that a court’s time should be taken up with argument about liability, on a quantum meruit basis, which was clear-cut.

Parties in this kind of contractual impasse would be sensible to agree some form of interim ‘contract’ for services at the authority’s usual rate, in the mean time, endorsed ‘without prejudice to the contention that the usual rate above is not a reasonable price for the services required, and that the full cost should be adjusted in the light of the outcome of legal proceedings’. The judge approved the good sense in taking this course to preserve the position of both sides to such disputes.   

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