The Care Quality Commission has reached an out of court settlement with its former deputy chief executive who had sued for libel over claims she was part of an alleged cover up.

The regulator has agreed to pay £510,000 towards Jill Finney’s legal costs and damages of £60,000, in a move that will avoid the case going to court next year.

Jill Finney

Jill Finney said she felt ‘vindicated’ by the CQC’s statement and the payout

The libel claim related to the CQC’s decision to publish a report it had commissioned from consultancy Grant Thornton into its regulation of University Hospitals Morecambe Bay Foundation Trust.

This report claimed it was “more likely than not” that Ms Finney had ordered the deletion of an internal review that was critical of the regulator, a claim she has always denied.

In a carefully worded statement, issued this afternoon, the regulator apologised to Ms Finney but did not withdraw its allegation that she was part of a cover up.

While the CQC published the Grant Thornton report in June 2013 with the names of those involved redacted, it decided to reveal them the following day after coming under intense public and political pressure. 

At the time CQC chair David Prior told HSJ they should have “published and been damned” from the outset.

In today’s statement, agreed following mediation, the regulator said it “deeply” regretted its decision “taken on legal advice, to withhold the names of individuals in the report, as promised to Ms Finney and others”. 

“It then had to reverse that decision after names, including Ms Finney’s, appeared in the media as a result of speculation by journalists,” it said.

“The consequences for Ms Finney were aggravated by the fact that some of the national media wrongly portrayed the internal report as being about maternity deaths at [Morecambe Bay].”

The statement continued: “The CQC accepts that Ms Finney was thereby disadvantaged in protecting her reputation and giving her public defence to an allegation which she has always denied; in addition, she suffered considerable distress.”

Ms Finney, who had already left the CQC when the report was published, was dismissed from her new role as commercial officer for Nominet as a result of the claims in the report.

She had sought up to £1.5m in damages but had told HSJ the main motivation for the case was to clear her reputation.

In its submissions to the High Court the CQC appeared to be committed to mounting a robust defence of its actions.

However, it also lodged a separate claim against Grant Thornton seeking a contribution if it lost the case.

A spokesman for the CQC said the regulator would not be pursuing further action against Grant Thornton. He said the legal costs paid out amounted to less than 50 per cent of the budgeted  cost at the time of mediation.

In a statement Ms Finney said she felt “vindicated” by the settlement which included “damages in the sum of £60k and payment of my legal costs”.

She added: “The type of unfair treatment I experienced highlights how the public can be misled as to what is going on in public service.

“There is little recognition that the public sector is full of people trying to do a good job and certainly acts as a deterrent from others joining,” she said.

“Time and time again there is a failure across the board to pay enough attention to context and complexity which means there is very little chance of the public really hearing detailed facts or of an individual receiving a fair hearing.”